Both the ISM Index and ISM Services reports come out this week, and it looks like the slide continues. The Index report coming out this morning is likely to show a drop to 42.0 from last month’s 43.5 reading.

The Services Index is likely to show a more dramatic shift. Last months reading was 50.2, which shows ever so slight expansion since the reading was above 50.0. This month the reading is expected to dip down to 48.5, signaling contraction.

Factory orders for September are expected to show another drubbing. After posting a 4.0 percent drop in August, this report is expected to follow that up with another 1.5 percent drop in September. With GDP figures last week showing a smaller decline than expected, it may translate into a slightly better final number, although I would still expect to see a negative reading.  The Chicago Purchasing Managers Index showed a much steeper decline than expected and this could be an indication of what to expect from the factory orders report.

The Non-Farm Payrolls report is the dark cloud looming over the market this week. So far this year the economy has shed over 750,000 jobs, and in the final quarter of the year, it shows no signs of letting up. If the current pace continues, one million people will lose their jobs this year, a truly staggering number.

Earnings:
Tuesday: UBS
Wednesday: CSCO, TWX
Thursday: QCOM
Friday: F

Source: Employment Reports A Dark Cloud, Earnings Wind Down