US pre-open: Markets to start new month down on China worries

US markets were set to start the month on a downbeat note, with oil futures dropping and a slump in China.

The Dow Jones Industrial Average was set to open down 74 points, while the S&P 500 and the Nasdaq were expected to start the session nine and 19 points lower respectively.

Personal spending data for December is due at 1330 GMT, while Markit Manufacturing PMI data will be released at 1445 GMT, shortly followed by the ISM Manufacturing Survey at 1500 GMT.

Japan soars while China slumps

Elsewhere, Japan's markets soared into February on Monday, while China slumped amid signs of a weakening economy.

"Financial markets are now watching how Beijing will respond to Tokyo's decision", said Peak Asset Management executive director Niv Dagan.

He said he doesn't believe China would begin a major currency devaluation, though he did note pressure was mounting "from record capital outflows and fears the economy is slowing faster than expected".

Analysts were also worried the Shanghai Composite was yet to reach the bottom of its trough, with some saying the benchmark could hit 2,500.

Meanwhile the private, unofficial measure of Chinese manufacturing - the Caixin PMI - edged higher to 48.4 from 48.2 in December, though with a figure below 50 that still indicated a contraction.

Dagan wrote that China's manufacturers were facing "even more challenges this year, as the government plans to reduce excess industrial capacity and clean up unprofitable 'zombie companies' that survive on bank loans and government subsidies".

European stocks fell on Monday as investors digested uninspiring manufacturing figures from the Eurozone and China.

Oil prices started to dip again, with West Texas Intermediate down 0.53% to $33.09 a barrel and Brent dropping 0.67% to $35.75.

The dollar was down 0.21% against the pound and dropped 0.35% against the euro but gained 0.17% against the yen. Spot gold was up 0.43% to $1,123.02.

In company news, all eyes will be on Google’s parent company Alphabet as it posts its fourth quarter earnings after the market closes. It will be the first time the market will get to see how the tech giant’s non-Google products are doing, and the company could surpass the market capitalisation of Apple.

Aetna reported before the bell a 38% jump in fourth quarter profits as medical costs fell, however it expects full-year operating earnings per share to be at $7.75, below expectations.