10 things you need to know before the opening bell
Turkey returns to single-party rule after surprise election sweep. Turkey's Justice and Development Party (AKP) regained its parliamentary majority after an unexpected sweep in this weekend's election. This strengthens the position of President Recep Tayyip Erdogan. "Our people clearly showed in the November 1 elections that they prefer action and development to controversy," Erdogan said in a statement. The Turkish lira surged 4% against the dollar following the results.
China's manufacturing sector contracts for the third straight month. China's official manufacturing purchasing managers' index (PMI) stood at 49.8 in October. Any reading below 50 signals contraction, and this was the third straight sub-50 report. The services PMI, which represents a much smaller portion of the economy, fell to 53.1 in October from 53.4 in September. The unofficial Caixin manufacturing PMI improved to 48.3 from 47.2. "Weak aggregate demand remained the biggest obstacle to economic growth, and the risk of deflation resulting from the continued fall in the prices of bulk commodities needs attention," Caixin economist Dr. He Fan said.
Japan is a bright spot in Asia. Japan's Nikkei PMI slipped to 52.4 in October from the preliminary estimate of 52.5, but nevertheless remains in expansionary territory. "Operating conditions at Japanese manufacturers improved substantially at the start of the final quarter of 2015," Markit's Amy Brownbill said. "Growth in production accelerated to the fastest since February, underpinned by a sharp rise in total new orders. Supporting the marked increase in new work intakes was a rise in international demand as new export order growth resumed, having contracted slightly in the prior month. Subsequently both employment and buying activity increased, following declines seen in September."
Europe is also looking better. The manufacturing PMI reports across the eurozone were broadly better than expected. Germany, France, Italy, and Spain were all in expansionary territory. The eurozone PMI improved to 52.3 in October from 52.0 previously. Still, things could be better. "The eurozone manufacturing recovery remains disappointingly insipid," Markit's Chris Williamson said. "The October survey is signaling factory output growth of only 2% per annum, a lackluster performance given the amount of central bank stimulus in place. With factory production lacking vigour, employment growth sagging to an eight-month low and output prices falling at the fastest rate since February, it's easy to see why the ECB are considering additional stimulus."
Mario Draghi says the European Central Bank will do what it takes. ECB president Mario Draghi told Italian news that the central bank would take action if it that inflation was falling short of target. "If we are convinced that our medium-term inflation target is at risk, we will take the necessary actions," Draghi told the Italian daily Il Sole 24 Ore. "We will see whether a further stimulus is necessary. This is an open question." Separately, the ECB determined that Greek banks need to raise more capital. The ECB revealed the results of bank stress tests and determined that Greece's four main banks - National Bank of Greece, Piraeus, Alpha Bank and Eurobank - need to raise 14.4 billion euros to cover bad loans under an adverse economic scenario.
HSBC profits jump. HSBC Q3 pre-tax profits jumped 32% as the bank had few fines to pay than in earlier reporting periods. Earnings climbed to $6.1 billion from $4.6 billion a year ago. "Revenue was down compared to the third quarter of 2014," CEO Stuart Gulliver said in a statement. "In particular, the stock market correction in Asia affected Principal Retail Banking & Wealth Management, and revenue was also lower in Global Banking & Markets."
Short-seller to release new report on Valeant Pharmaceuticals. Citron Research's Andrew Left is planning to publish a new report on controversial pharma giant Valeant. This follows an earlier research report in which Left argued that the multi-billion dollar company was operating an Enron-like fraud.
Chipotle closes stores amid E. coli outbreak. The Mexican food chain closed 43 stores in Washington state and Oregon after three people in Portland and 19 people in Washington became sick after eating in its restaurants since October 14.
Global market are mixed. US futures are up modestly with Dow futures up 23 points and S&P 500 futures up 2 points. Asian markets closed lower with Japan's Nikkei down 2.1%, Hong Kong's Hang Seng down 1.2%, and China's CSI 300 down 1.6%. Europe is mostly up with Germany's DAX up 0.8%, France's CAC 40 up 0.4%, Spain's IBEX up 0.4%, and the UK's FTSE 100 down 0.3%.
US manufacturing data ahead. At 9:45 a.m. ET we'll get the Markit US manufacturing PMI report and the ISM manufacturing index report. Read BusinessInsider's complete preview of the economic data in the Monday Scouting Report.