U.S. stocks are poised on Tuesday to continue declines from Monday.
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U.S. stock market futures are pointing down ahead of a wave of corporate earnings due on Tuesday, set to follow European and Asian equities lower.
In Asia, Tokyo’s Nikkei 225 fell 1.97%, while Hong Kong’s Hang Seng was a rare riser, up 0.1%. The Shanghai Composite Index dipped 0.13%. The FTSE 100 in London was 0.6% lower, while the CAC 40 was down near 1% in Paris and Frankfurt’s DAX slipped 0.4%. The U.S. premarket looked set for a soft open, with Dow futures pointing down around 70 points after the index fell 123 points on Monday to close at 34,077.
U.S. stocks are set to continue declines from Monday, with S&P 500 and Nasdaq 100 futures also pointing down.
Analysts noted that macro factors remain largely unchanged, with buoyant economic growth prospects set against inflation concerns and the specter of a continued Covid-19 threat globally, as the market turns to a wave of corporate earnings.
“Earnings could be a catalyst to give the overall market a sense of direction,” said Jim Reid, a strategist at Deutsche Bank.
“Investors struggled to find a catalyst that could justify further gains, particularly amidst a global rise in Covid cases that is one of the fastest since the pandemic began,” Reid said, commenting on Monday’s decline on the S&P 500 and European Stoxx 600, as the VIX index of volatility rose 1.04 points in its biggest daily increase in three weeks.
“That said, this pullback still leaves the S&P and the STOXX at their third and second highest ever levels respectively, so let’s not get too carried away,” Reid added.
Shares in Big Tobacco companies fell following a Wall Street Journal report on Monday that the White House could introduce new regulations on nicotine levels in cigarettes, affecting how addictive the products are. London-listed Imperial Brands and British American Tobacco fell 6% to 7%, while Japan Tobacco stock was near 2% lower in Asia. Altria stock was down 1.5% in the New York premarket, after a 6% fall on Monday, while declines for Philip Morris International were more muted, with the stock less than 1% lower in the premarket, ahead of earnings.
Read the Journal report:Biden Administration Considering Rule to Cut Nicotine in Cigarettes
Shares in London-listed Czech cybersecurity firm Avast, a FTSE 100 component, climbed near 4% higher, after the group reported results for the first quarter of 2021. Revenue and adjusted earnings both grew more than 10% in the quarter compared to the same period last year, and Avast raised its forecast for the full year.
Danone stock slipped 2.5% in Paris following downbeat earnings. The French food giant confirmed its guidance for the full year and said that sales fell in the first quarter of 2021 as the pandemic continued to weigh on its activities.
Shares in Italian soccer club Juventus fell 9% in Milan, erasing some of 18% gains on Monday following news that the club would join a prospective breakaway European Super League of top clubs. Backlash from fans and politicians against the new league continued on Tuesday, though shares in Manchester United —listed in the U.S.—were up more than 2% in premarket after climbing near 7% Monday.
Read this:European Soccer’s ‘Super League’ Has Thrown the Sport Into Chaos. What’s It All About?
There’s little news on the economic front, while investors can expect a wave of U.S. corporate earnings. Pharmaceutical Johnson & Johnson, aerospace company Lockheed Martin, Philip Morris International, consumer-goods company Procter & Gamble, business services company Xerox, and streaming platform Netflix are due to report results on Tuesday.
