Stocks dip before Fed; earnings spur US tech

Bloomberg

Stocks drifted lower with US equity futures on Wednesday as investors weighed earnings reports and awaited the
conclusion of the first Federal Reserve policy meeting of the year.
The Stoxx Europe 600 Index opened modestly down amid a wave of corporate results. Luxury conglomerate LVMH edged higher after sales of fashion and leather goods soared in the fourth quarter. Sweden’s largest bank SEB said it plans to return more money to shareholders after unveiling results that beat estimates.
S&P 500 contracts were little changed, while Nasdaq 100 futures jumped after Microsoft Corp.’s fiscal second-quarter sales rise at a faster clip than analysts had projected. Apple Inc., Facebook Inc. and Tesla Inc. are all due to report their earnings.
Treasury yields held steady, the dollar edged up and Bitcoin dipped below the $32,000 level.
While all eyes are on tech results and the Fed, new coronavirus variants that sparked fresh lockdowns are also weighing on the so-called reflation trade that bets on an end to curbs. The International Monetary Fund downgraded Europe’s 2021 growth outlook, in part on its late and stumbling vaccination campaign. Data showed global coronavirus cases surpassed 100 million, with the UK becoming the first nation in Europe with 100,000 deaths.
“For the reopening trade to really have persistence it is going to need to show a much broader participation across the market,” Jim McDonald, chief investment strategist at Northern Trust, said on Bloomberg TV. “The virus vaccine rollout is the most important development to help give confidence in the shape of the recovery.”
Elsewhere, emerging market currencies edged higher and crude oil advanced. A gauge
of Asian equities held at the lowest in about a week.
Futures on the S&P 500 Index dipped 0.1% as of 8:18 am London time and the Stoxx Europe 600 Index decreased 0.1%.
While the MSCI Asia Pacific Index declined 0.2%, the MSCI Emerging Market Index fell 0.5%.
The Bloomberg Dollar Spot Index jumped 0.1% and the euro falls 0.1% to $1.2151.
The British pound was little changed at $1.3742 and the onshore yuan was little changed at 6.466 per dollar. The Japanese yen weakened 0.1% to 103.68 per dollar.
The yield on 10-year Treasuries rose less than one basis point to 1.04% and the yield on two-year Treasuries decreased less than one basis point to 0.12%.
While Germany’s 10-year yield increased less than one basis point to -0.53%, Britain’s 10-year yield rise one basis point to 0.274%. Japan’s 10-year yield gained one basis point to 0.049%.
West Texas Intermediate crude gained 0.8% to $53.04 a barrel and Brent crude increased 0.8% to $56.35 a barrel. Gold weakened 0.1% to $1,848.88 an ounce.