U.S. data are expected to show economic growth is declining after interest rate hikes to reduce high inflation
World stocks and Wall Street futures dropped Tuesday as investors waited for U.S. earnings data and an update on economic growth.
London and Frankfurt bourses opened lower. Shanghai and Hong Kong dropped while Tokyo gained. Oil prices were flat.
Around 170 of the largest U.S. firms including Microsoft and Amazon are set to report earnings this week. On Monday, Wall Street’s benchmark S&P 500 index advanced 0.1 per cent after Coca-Cola Co.’s quarterly profit came higher than anticipated.
Also this week, U.S. data are expected to show economic growth is declining after interest rate hikes to lower high inflation. France and Germany also are due to report economic growth after surveys showed factory activity slowing down.
If the economy cools, tech stocks will face a “difficult environment” maintaining high prices that have assisting in buoying the market, Edward Moya of Oanda stated in a report. Moya stated stocks face “big risks” from corporate earnings and a battle in Washington over increasing the government’s debt ceiling.
In early trading, the FTSE 100 in London dropped 0.4 per cent to 7,880.69 and the DAX in Frankfurt shed 0.3 per cent to 15,811.08. The CAC 40 in Paris lost 0.8 per cent to 7,517.41.
On Wall Street, the S&P 500 future dropped 0.5 per cent. That for the Dow Jones Industrial Average was down 0.4 per cent.
On Monday, the Dow increased 0.2 per cent while the Nasdaq composite tumbled 0.3 per cent.
In Asia, the Shanghai Composite Index shed 0.8 per cent to 3,264.87 while the Nikkei 225 in Tokyo advanced less than 0.1 per cent to 28,620.07. The Hang Seng in Hong Kong dived 1.9 per cent to 19,578.20.
The Kospi in Seoul declined 1.4 per cent to 2,489.02 after South Korea reported surprisingly solid economic growth in Q1, avoiding a technical recession. Korean economic activity extended by 0.3 per cent over the preceding three-month duration, bouncing back from a 0.4 per cent decline.
India’s Sensex gained less than 0.1 per cent to 60,105.07. Singapore and Bangkok markets dropped. New Zealand and Australian were closed for a holiday.
Experts anticipate firms in the S&P 500 to report their largest decline in earnings since the spring of 2020, when the covid crisis paralyzed the economy. Most of the firms so far this earnings reporting season have been beating predictions.