U.S. services industries and U.S.-Iran tensions take centerstage Tuesday.
Tuesday morning, the Institute for Supply Management will release its December non-manufacturing index reading. Economists polled by Bloomberg expect the index edged up to 54.5 during the month, from 53.9 in November. A reading above 50 indicates expansion, while a reading below 50 indicated contraction.
“Our forecast for ISM’s non-manufacturing index is consistent with growth roughly at potential as the non-manufacturing sector continues to weather the industrial slowdown relatively well,” Nomura wrote in a note to clients Jan. 3. “The announced phase one trade deal and news coverage of a possible ramp up in Chinese purchases of US agricultural products poses some upside risk to the December ISM non-manufacturing index, given the coverage of the agricultural sector.”
Meanwhile, market participants will be closely monitoring the growing geopolitical tension between the U.S. and Iran. The Dow & S&P 500 both had their worst day in a month Friday following the initial U.S. attack that killed a top Iranian official; however, markets largely shrugged off the geopolitical risks Monday. Stocks slid at the open, but reversed all of their earlier losses and closed higher at the end of regular trading. Market impact from further developments on the conflict will play a crucial role for investors.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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