What to watch for in the market tomorrow: Manufacturing data

A worker prepares material while making leather boots at the Dehner Co. factory in Omaha, Nebraska.

Luke Sharrett | Bloomberg | Getty Images

Here are the most important things to know about Tuesday before you hit the door.

1. Let October begin

Tuesday marks the first trading day of the month and fourth quarter. After a volatile three-month period, the S&P 500 and the Dow Jones Industrial Average finished the quarter in positive territory. But will October keep up with this trend?

October is historically the most volatile month of the year for stocks, with the Cboe Volatility index, reaching 21 on average over the past three decades.

UBS said that to have a positive outlook on stocks, it needs to see progress on trade and better economic data.

“We expect trade tensions to persist and central banks to remain dovish in 4Q,” UBS global chief investment officer Mark Haefele said in a note to clients.

2. Manufacturing sector rebound?

We’ll get a gauge of U.S. manufacturing in September, a sector that contracted for the first time in three years in August, weighed on by the U.S.-China trade war.

The ISM U.S. manufacturing Purchasing Managers’ Index fell to 49.1 in August; any reading below 50 signals a contraction. Economists are expecting a rebound to 50.2 for September, although the employment component of the manufacturing sector entered contraction territory last week, hitting the lowest level since January 2010.

Economists are expecting manufacturing PMI to come in at 51, the same as August. Construction spending is also expected to rise 0.4%, after rising 0.1% in August.

3. Fed speakers

Several members of the Federal Reserve are slated to speak on Tuesday, including Fed Vice Chair Richard Clarida, St. Louis Fed President James Bullard and Chicago Fed President Charles Evans.

Earlier in September, the Federal Reserve lowered interest rates for the second time since the financial crisis. Hearing from the Fed members could give investors clues about future rate cuts.

Major events (all times ET):

Monthly vehicle sales

8:50 a.m. Fed Vice Chair Richard Clarida

9:15 a.m. St. Louis Fed President James Bullard

9:30 a.m. Fed Governor Michelle Bowman

9:45 a.m. Manufacturing PMI

10:00 a.m. ISM manufacturing

10:00 a.m. Construction spending

4:15 p.m. Chicago Fed President Charles Evans

Major earnings:

McCormick (before the bell)

Stitch Fix (after the bell)

United Natural Foods (after the bell)

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