Stock Futures Are Down For The New Week

US stock futures were lower to start the week trading as investors awaited more earnings.

Investors have also been making some gains since the stock market started the year. The Nasdaq Composite has risen for the past five consecutive weeks.

Dow Jones futures lost 110 points, or 0.34%, on Monday. S&P 500 index fell 0.46%, while Nasdaq-100 futures fell 0.56%.

The chief executive of Gamma Investment Consulting said gains could fall further as the economy slows later this year, adding that there has not been a recovery from a major bear market decline in 60 years.

Disney, Dupont, and PepsiCo are the big companies reporting good earnings this week. The S&P 500 earnings season is half way, and the results are not good. Fourth-quarter earnings for S&P 500 index companies were down 2.69%.

Markets should worsen ahead of Federal Reserve Chairman Jerome Powell’s Tuesday speech to the Economic Club of Washington. Powell’s comments on disinflation sent investors rallying in stocks last week, shrugging off another sharp rate hike from the central bank. There is very little economic data on Monday.

Investors appear to be looking past rate hikes and focusing on recent data showing a slowdown in inflation in hopes that the economy will ease into a milder recession and earnings will revive later in the year. The S&P 500 recently formed a “golden cross” bullish pattern, hitting a 5-month high above the 4,100 level last week. The Nasdaq’s 5-week winning streak is the first since November 2021.

European markets

The new trading week started negatively for European markets as investors assessed the global economic outlook and efforts to tackle inflation.

The pan-European Stoxx 600 index fell 0.54% at the open, with most sectors and major stocks trading in the red. Tech, retail, and travel & leisure stocks led the losses, all down 1.05%, while oil & gas briefly reversed the trend to gain 0.12% before settling into negative territory.

Regional markets closed higher on Friday as investors looked into key central bank decisions and economic data.

One data last week, the purchasing managers’ index for the eurozone, showed that business activity in the single currency area returned to growth in January, raising hopes that the bloc will avoid an impending recession.

Last Friday’s US jobs report was much stronger than expected, with nonfarm payrolls rising 517,001, well above the Dow Jones estimate of 187,001. Treasury yields rose on the news as stock futures fell.

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