Europe Stocks, U.S. Futures Drop Before Earnings: Markets Wrap

Stocks dropped along with American equity-index futures as investors awaited the start of U.S. earnings season and officials prepared to sign a China trade deal in Washington. The yuan held close to its strongest level since July.

The Stoxx Europe 600 Index fell, with declines in chemicals and bank shares the biggest decliners. Contracts on the main U.S. equity benchmarks also sagged, after a jump in technology shares Monday sent the S&P 500 and Nasdaq Composite Index to record highs. Asia stocks were modestly higher, though they pared an earlier advance as data showed China’s trade with the U.S.slumped last year, with the tariff dispute hitting relations between the two biggest economies.

Treasuries nudged up, while the dollar edged higher versus its biggest peers. The pound flirted with a sixth day of declines, which would be the longest losing streak since May.

The imminent signing of the first-phase trade deal between the world’s biggest economies and Washington’s decision to lift the currency-manipulator label from Beijing have spurred market optimism in recent days. The direction of travel from here may hinge on the earnings season, which begins in earnest on Tuesday with results from Wall Street giants JPMorgan Chase & Co. and Citigroup Inc.

Here are some events to watch for this week:

  • Phase one of the U.S.-China trade deal is set to be signed on Wednesday in Washington.
  • The biggest American financial institutions kick off earnings season, including JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co., Bank of America Corp., Goldman Sachs Group Inc., Morgan Stanley and BlackRock Inc.
  • The U.S. releases inflation data for December on Tuesday.
  • The Fed’s so-called beige book is due on Wednesday.
  • China GDP comes on Friday.

These are some of the moves in major markets:

Stocks

  • The Stoxx Europe 600 Index fell 0.4% as of 8:21 a.m. London time.
  • Futures on the S&P 500 Index decreased 0.3%.
  • France’s CAC 40 Index dipped 0.6%.
  • The MSCI Asia Pacific Index advanced 0.3%.

Currencies

  • The Bloomberg Dollar Spot Index increased 0.1%.
  • The British pound declined 0.1% to $1.297.
  • The euro climbed 0.1% to $1.114.
  • The Japanese yen was little changed at 109.92 per dollar.

Bonds

  • The yield on 10-year Treasuries decreased one basis point to 1.83%.
  • Germany’s 10-year yield dipped one basis points to minus 0.17%.
  • Britain’s 10-year yield decreased three basis points to 0.724%.

Commodities

  • West Texas Intermediate crude dipped 0.2% to $57.96 a barrel.
  • Gold dipped 0.3% to $1,543.69 an ounce.
  • Iron ore climbed 1.8% to $94.82 per metric ton.

— With assistance by April Ma

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