US futures mixed as investors turn focus to earnings season

Bloomberg

US futures were mixed as investors turn their attention to the second-quarter earnings season starting this week in order to gauge whether corporate profitability can support equity valuations. Treasury yields dropped.
The Stoxx Europe 600 fluctuated, with declines for banks and travel companies offsetting gains for real-estate and utilities. Atos SE plunged more than 15% after the French IT-services firm lowered revenue-growth and operating margin targets. Contracts on the S&P 500 dropped, while those on the Nasdaq 100 swung between small gains and losses.
Treasuries resumed gains after snapping an eight-session rally. They will remain in focus amid new supply coming to the market this week, as well as key US inflation data and Federal Reserve Chair Jerome Powell’s semi-annual appearance before Congress. The dollar was steady against major peers.
Equities and bonds have rallied amid a decline in long-term interest rates and inflation expectations as central banks aren’t rushing to pull back support that has helped a recovery from the pandemic. Still, investors remain concerned about the spread of the delta variant and a slowdown in vaccination rates, while pondering when the Fed will start tapering stimulus.
“There does seem to be a complacency that Goldilocks is not only alive and well, but that it’s getting stronger by the day,” Simon Ballard, First Abu Dhabi Bank chief economist, said on Bloomberg Television. “Unfortunately, it has to be recognized that going forward, the longer that rates remain where they are, the more that we look towards tapering, the more severe and acute could be the reaction.”
Elsewhere, Asian stocks rose at the start of the week after China’s central bank moved to boost liquidity by cutting the amount of cash most banks must hold in reserve to buttress economic growth.
The euro was little changed after European Central Bank President Christine Lagarde told investors to prepare for new guidance on monetary stimulus in 10 days. Oil extended a decline after its first weekly loss in seven amid an Opec+ dispute over a production increase.
Futures on the S&P 500 fall 0.2% as of 4:30 am New York time and futures on the
Nasdaq 100 rise 0.1%.
While futures on the Dow Jones Industrial Average drop 0.3%, the Stoxx Europe 600 also falls 0.1%. The MSCI World index rises 0.2%.
While the Bloomberg Dollar Spot Index was little changed, the euro was little changed at $1.1875 and the British pound falls 0.2% to $1.3873. The Japanese yen was little changed at 110.07 per dollar.
The yield on 10-year Treasuries declined two basis points to 1.34% and Germany’s 10-year yield declined one basis point to -0.30%. Britain’s 10-year yield declined two basis points to 0.64%