Futures steady ahead of earnings, inflation data

Bloomberg

Markets settled into a holding pattern on Tuesday as traders awaited key American inflation data and second-quarter earnings reports from some of the world’s biggest banks. Treasuries and the dollar were steady.
Contracts on the S&P 500 and the Nasdaq 100 fluctuated around small gains and losses after the underlying indexes closed at records. JPMorgan Chase & Co and Goldman Sachs Group Inc are reporting, along with Pepsico Inc, giving traders an opportunity to gauge whether extreme valuations are underpinned by profit growth.
The Stoxx Europe 600 index was little changed. Health care stocks declined, with Gerresheimer AG slumping 8% after reporting narrowing profit margins. Nokia OYJ headed an advance for telecommunications companies after saying it will raise full-year guidance. The UK’s FTSE 100 outperformed, led by lenders including HSBC Holdings Plc, Barclays Plc and Natwest Group Plc, after the Bank of England removed
restrictions on dividends.
Expectations for a solid earnings season are supporting the stock rally, as investors ponder how central banks will unwind the support driving the recovery from the pandemic. Still, inflationary pressures remain a concern amid speculation around when the Federal Reserve will start cutting back stimulus.
“The broad markets are settling back and awaiting US inflation and US bank earnings,” said Sebastien Galy, a senior macro strategist at Nordea Investment Funds SA, in a note to clients. “We view the environment as one of gestation as earnings come in, before the risk-taking trend starts again, though a higher US inflation print could create a temporary setback.”
Elsewhere, an MSCI gauge of the Asian stocks rose for a second day. Hong Kong outperformed as Chinese technology shares climbed after government approval of a Tencent Holdings Ltd deal eased concerns about stricter regulation. Strong trade data from China also buoyed the mood.
Oil rises for the third time in four days as traders grappled with the demand implications of a Covid-19 resurgence in several regions and slowing economic growth in China.
Futures on S&P 500 were little changed as of 9:42 am London time and futures on Nasdaq 100 were little changed.
While futures on the Dow Jones Industrial Average were little changed, the Stoxx Europe 600 was little changed and the MSCI World index rises 0.1%.
The Bloomberg Dollar Spot Index was little changed and the euro was little changed at $1.1850.
While the British pound falls 0.2% to $1.3857, the Japanese yen was little changed at 110.36 per dollar. The yield on 10-year Treasuries was little changed at 1.37% and Germany’s 10-year yield was little changed at -0.29%.
Britain’s 10-year yield was little changed at 0.65%.
While West Texas Intermediate crude rises 0.7% to $74.65 a barrel, gold futures were little changed.