For today, Tuesday January 17th, US stock-index futures fell as investors and traders worried about the potential for central banks to become more hawkish. This sentiment was further compounded by several large corporates, such as Goldman Sachs and Whirlpool, reporting disappointing financial results. As a result, contracts on the S&P 500 and Nasdaq 100 indexes both slipped by at least 0.2%.
Goldman Sachs saw a 1.7% drop in premarket trading in New York after posting fourth-quarter net revenue below expectations. The results reflected lower net revenues in asset & wealth management as well as global banking & markets. This was not only a disappointment for Goldman Sachs, but also for investors and traders who were expecting better results from the company.
Whirlpool also reported disappointing financial results, with the company falling 3% after reporting fourth-quarter net sales of $4.90 billion, compared to forecasts of $5.15 billion. The company’s sales numbers missed expectations, which led to the decline in their stock price. This was another disappointment for investors and traders who were expecting better results from the company.
Pfizer Inc also retreated 1.9% after Wells Fargo predicted earnings downgrades for the company. This was another disappointment for investors and traders who were expecting better results from the company. The news of earnings downgrades for Pfizer Inc added to the overall negative sentiment in the market.
Freeport-McMoRan Inc also saw a decline amid a muted demand outlook for copper. The company’s stock price fell 1.8% as a result of this. Bloomberg Intelligence analysts predict that copper could fall to $8,000 a ton from more than $9,000 now as physical demand indicators are weakening. This was another disappointment for investors and traders who were expecting better results from the company.
This trend is expected to continue as the earnings reporting season moves into full gear this week, with many analysts predicting more disappointing results. Of the 33 S&P 500 companies that have posted results so far, 25 have beaten analysts’ expectations. However, while it’s still early days in the season, the nascent trend lags buoyant surprises of earlier quarters. 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.
Earnings are developing into another challenge for investors who’ve had their expectations for a pause in central-bank tightening damped. European Central Bank Chief Economist Philip Lane 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.
The benchmark gauge for European shares fell for the first time in five days. Ocado Group Plc tumbled 8.7% after the online retailer forecast a decline in earnings from its joint venture with Marks & Spencer Group Plc, reflecting tight competition for grocery spending in the UK.
The dollar traded lower after swinging between gains and losses at least 16 times on Tuesday. The US dollar is trading near the lowest level since April, with China’s reopening bringing back the risk-on sentiment and sparks the best start to a year for global equities in records going back to 1988.