Economic, earnings reports, October stocks, treasuries and more: Tuesday's 5 things to know

Here are the key events taking place on Tuesday that could impact trading.

ECONOMY COMES INTO FOCUS: Tuesday morning will bring three blueprints on the economy.

 At 10 a.m. ET, the big number to watch will be the ISM’s manufacturing purchasing managers index for October. It’s expected to slip for the second month in a row to 50.0, the lowest since May 2020. It would also mark the fifth consecutive month of flat or declining manufacturing activity. For context, the March 2021 reading of 63.7 marked the fastest pace of expansion in more than 37 years (50 is the dividing line between an expanding and contracting manufacturing sector).

The markets will pay close attention to the prices paid component. It’s expected to rise for the first time in seven months to 52.5, up from 51.7 in September which was the lowest since May 2020. For perspective, the June 2021 reading of 92.1 was a record high the ISM prices paid index.

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Other very important reports released at that time will be the latest job openings and Labor Turnover Survey. 

The Labor Department is expected to say there were 10 million job openings available at the end of September. That’s down from August, when openings tumbled more than expected to 10.053 million to the lowest since June 2021. 

If the September number comes in as expected it will mark the fifth month in the last six of months of falling job openings, down sharply from a record 11.855 million in March and the lowest since September 2021. 

Even at 10 million, the number of jobs that need to be filled is nearly double the number of people looking for work (5.75 million in September per BLS), signaling an extremely tight labor market as employers struggle to fill positions.

Finally, watch for construction spending to fall 0.5% month-over-month in September, following a steeper-than-expected 0.7% slide the prior month. It would mark the third consecutive contraction, the most since December 2018.
 

EARNINGS REPORTS OUT: A busy day for earnings on deck Tuesday, with Fox News and Fox Business parent Fox Corporation reporting ahead of the opening bell. 

Also keep an eye out for results from pharmaceutical giants Pfizer and Eli Lilly, oil and gas refiners Phillips 66 and Marathon Petroleum, food distributor Sysco Corp. and ride-hailing pioneer Uber Technologies to name a few. 

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In the afternoon watch for numbers from life and health insurer Prudential Financial, multi-line insurer AIG, packaged food giant Mondelez International, chipmaker Advanced Micro Devices, hotel and casino operator Caesars Entertainment and household goods maker Clorox among many others.

More than half of the S&P 500 (279 companies) has reported 3Q numbers, and so far, the results are ahead of expectations
 

OCTOBER STOCKS REPORT: U.S. stocks slipped as the Federal Reserve prepared this week to discuss how much more to raise interest rates as it tries to calm inflation. 

Despite Monday's losses, the major indexes locked in gains for October, which traders spent weighing whether the end is in sight for the Fed's most aggressive rate moves. 

The Dow Jones Industrial Average added 14% for its best month since 1976. The S&P 500 and the tech-focused Nasdaq Composite both notched single-digit monthly gains. 

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The Fed's rapid interest-rate increases have battered markets for much of the year, leaving some investors searching for even the faintest sign it is time to put their money to work again. 

In October, traders were encouraged when some Fed officials said they are considering whether to slow the pace of monetary tightening as they balance controlling inflation and avoiding a sharp economic contraction. 

The European Central Bank also cited concerns that additional rate hikes could hurt the outlook for growth. October's stock rally came despite falling government-bond prices and rising yields, which for much of the year had slammed stocks.
 

TREASURY YIELDS CLIMB: Monday's gain sealed the 10-year Treasury yield's climb to 4.074%, from 3.802% at the end of September. 

Yields and bond prices move inversely.

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That pattern suggests some investors were thinking wishfully when bidding up stock prices in October, said Chris Senyek, chief investment strategist at Wolfe Research. "I think it was largely a hope trade," he said. "I don't think it was built upon fundamentals." 

This week, traders are shuffling their holdings ahead of Wednesday, when Fed officials are almost certain to raise interest rates by another 0.75 percentage point.

RUNNING ON FUMES: Fuel supplier Mansfield Energy is taking steps to prepare for a diesel shortage on the East Coast of the United States, issuing an advisory to businesses that rely on the fuel to plan rather than panic.

Last week, Mansfield Energy raised a red flag on the upcoming diesel fuel shortage in the southeastern region of the U.S., speculating it could be from "poor pipeline shipping economies" and a historically low supply of reserves.

On a normal day, the East Coast markets have 50 million barrels in storage, but right now, there are less than 25 million barrels available.

"A tight diesel supply will force prices to go up, which will eventually make it too expensive for some people," the company said in a press release on Monday. "High prices will bring demand back down enough that it balances with limited supply."

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Mansfield warned that at the U.S. economy level, consumers may feel pain at the pump, but for businesses that rely on diesel for operations, supply will still be available.

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"That is not to say there will not occasionally be situations where there is a true physical lack of products," the company said. "Some cities might run dry on diesel for a few days, at least at the terminal level. But the fuel supply chain is dynamic, and suppliers will rally to fill in any gaps in supply."

In preparation for the shortage, Mansfield advised bulk fuel buyers not to panic and order fuel when they do not know whether it will fit in the tanks or not. Fuel should be available by normal means in "most areas," the company said.