US futures decline on earnings jitters

Bloomberg

US equity futures slipped in choppy trading as investors await the next batch of second-quarter earnings for clues on how well companies are coping with surging prices. Bonds extended an advance.
Nasdaq 100 contracts fall 0.4%, while those on the S&P 500 ticked lower. The Stoxx 600 Index added 0.5%, poised for a weekly advance as investors shrugged off worries about the economic outlook.
Global stocks remain on course for their best week in a month, paring this year’s equity market rout to about 18%. Speculation that the worst of the selloff has passed is partly behind the move.
“Q2 earnings were seemingly not as bad as feared,” Mizuho International Plc strategists Peter McCallum and Evelyne Gomez-Liechti wrote in a note to clients. “That said, tech giants announced spending cuts and a hiring slowdown. Consumer firms lowered this year’s
guidance.”
Angst about the damage from inflation and rapidly rising interest rates is proving hard to shake — despite a tempering in expectations
of just how aggressive the
Federal Reserve will be.
Underscoring recession fears, Treasuries extended an advance, pushing the 10-year yield to around 2.8%. Economic data Friday showed Germany’s economy shrinking for the first time this year as inflation squeezes businesses and households and the war in Ukraine destroys confidence. US PMIs are due at 9:45 am.
The losses mark the second major sector selloff sparked by Snap in two months, as its results become a barometer for ad spending as economic fears mount. There are growing signs that tech companies are preparing for a recession with some pulling back on hiring, while Meta has lost about half of its value this year after disappointing revenue forecasts.
Focus will now turn to the Fed’s meeting next week, where the central bank is again expected to increase interest rates to tame scorching inflation.
Futures on the S&P 500 fall as much as 0.2% as of 6:59 am New York time and futures on the Nasdaq 100 fell 0.4%.
While Futures on the Dow Jones Industrial Average were little changed, the Stoxx Europe 600 rose 0.5%. The MSCI World index was little changed.
The Bloomberg Dollar Spot Index was little changed and the euro fell 0.6% to $1.0167.
While the British pound fell 0.4% to $1.1953, the Japanese yen was little changed at 137.30 per dollar.
The yield on 10-year Treasuries declined six basis points to 2.81% and Germany’s 10-year yield declined 17 basis points to 1.05%. Britain’s 10-year yield declined 12 basis points to 1.93%.