Stocks Finish Lower Amid Renwed Global-Demand Concerns

U.S. equity markets were lower after a blockbuster October jobs report on Friday and weak trade data from China overnight.

The Dow Jones Industrial Average was down 178 points, or 1% to 17731. The S&P 500 shed 20 points, or 0.98% to 2078, while the Nasdaq Composite declined 51 points, or 1.01% to 5095.

Consumer discretionary declined the most on the session, while utilities bounced between gains and losses.

Today’s Markets

Traders in the U.S. focused on economic data from China on Monday, which fueled renewed concerns about slowing global demand. The world’s second-largest economy said its exports declined 6.9%, compared to 3.8% expected drop. It was the fourth-straight month of decline. Meanwhile, imports also went south, falling 18.8% during October, more than the 15% expected slide. Exports to the U.S. fell 0.9%, while those to Europe were down 2.9%, and to Japan, down 7.7%.

“China data pointed to a further slowdown, but with the full effect of rate cuts yet to be felt, there is some reason to hope that this performance may be reversed in the coming months,” Chris Beauchamp, senior market analyst at IG said in a note.

The weak data, though, didn’t weigh much on the nation’s benchmark average, as the Shanghai Composite index jumped 1.58%. Meanwhile, Hong Kong’s Hang Seng slipped 0.86%, and Japan’s Nikkei climbed 1.96%.

“The Nikkei was up almost 2% and the reasoning given was that the weaker yen is going to help exporters,” Michael Block, chief strategist at Rhino Trading Partners said. “Of course, the yen was weaker because the Fed is going to raise rates in December.”

Still, before the U.S. central bank can move forward with tighter monetary policy, it must parse a full month of economic data, and the non-farm payrolls report out on Friday helped bolster expectations of an interest rate hike before the end of the year. The Labor Department reported a drop in the headline unemployment rate and a much bigger-than-expected gain in the number of jobs created during October.

As Fed Chairwoman Janet Yellen reiterated last week in testimony on Capitol Hill, she and the Federal Open Market Committee will continue to monitor any and all economic data from the U.S. before making a final decision on when rates will rise.

Sam Stovall, U.S. equity strategist at S&P Capital IQ said in a note that while history cannot guarantee a rate hike this year, it supports the fact the Fed has raised rates not only in the final months of the year, but ahead of presidential elections.

“[Standard & Poor’s Economics] is not expecting the Fed to set precedent when they forecast December to be the long-awaited start to the rate-tightening cycle, and project the possibility of a rate hike to occur during the months leading up to the 2016 presidential election,” Stovall explained.

With that in mind, the economic calendar for the week was set to be relatively light with no major data points on the U.S. economy expected on Monday or Wednesday. On Tuesday, investors can expect the latest read on import, export prices, followed by retail sales, producer prices, and consumer sentiment on Friday.

The Dow slipped back into negative territory for the year as tech heavyweight IBM (NASDAQ:IBM) weighed on the index after Apple (NASDAQ:AAPL) said it was set to start selling its iPad Pro.

Elsewhere in the market, commodities were mostly higher to start the week, before reversing course in late-morning action. Global oil prices slumped as U.S. crude prices declined 0.63% to $44.00 a barrel, while Brent, the international benchmark shed 0.32% to $47.27.

Metals, meanwhile, were mixed. Gold tacked on 0.14% to $1,089 a troy ounce. Silver declined 1.44% to $14.48 an ounce, while copper was 0.42% lower to $2.32 a pound.

European equities were lower on the heels of China’s trade figures. The Euro Stoxx 50, which tracks large-cap companies in the eurozone, declined 0.89%, while the German Dax shed 0.92%, the French CAC 40 shed 1.02%, and the FTSE 100 declined 0.60%.