(Bloomberg) — European equities and US stock-index futures fell amid signs central banks will turn more hawkish and as investors focused on earnings reports from Wall Street banks.
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Contracts on the S&P 500 and Nasdaq 100 indexes slipped at least 0.3% each as US markets were set to reopen after a holiday. The Stoxx Europe 600 Index was dragged by technology and automobile-parts shares. Treasuries slid, with yield curves steepening. The dollar fluctuated between gains and losses, while gold declined. Freeport-McMoRan Inc. declined in premarket New York trading amid a muted demand outlook for copper.
Investors had their expectations for a pause in central-bank tightening damped by European Central Bank Chief Economist Philip Lane, who said interest rates will have to move into restrictive territory to bring inflation back to target. BlackRock Inc. Vice Chairman Philipp Hildebrand said he saw no chance of policy easing this year. Data including a record increase in UK wages signaled further rate hikes are necessary.
Several Federal Reserve officials will be speaking this week, providing more clues on their policy priorities. The World Economic Forum’s annual meeting kicks off in Davos, Switzerland, with speakers including European Central Bank President Christine Lagarde and the International Monetary Fund’s Kristalina Georgieva.
US corporate earnings may set the tone for traders this week as the reporting season moves up a gear. Goldman Sachs Group Inc. and Morgan Stanley are set to release their results on Tuesday, yielding a clue on the health of the world’s largest economy. Of the 29 companies on the S&P 500 that have posted earnings so far, 24 have beaten analysts’ expectations.
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However, UBS Wealth Management expects “quite a bit of downside here on the earnings” in the US, according to Hartmut Issel, head of Asia Pacific equities.
Freeport McMoRan slid 2.6% in early New York trading. Bloomberg Intelligence analysts predict copper could fall to $8,000 a ton from more than $9,000 now as physical demand indicators…
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