Futures Stock Fall, signaling losses after new records

Markets seemed to stop after gathering for much of January, with money managers saying there was no clear catalyst for the decline. Investors have been enjoying a solid start to the earnings season in recent days, although some are worried that high valuations in market corners will leave stocks vulnerable in the coming months.

“With the lack of new ammunition, people are simply stopping,” said Lars Skovgaard Andersen, an investment strategist at Danske Bank Wealth Management.

Investors are wary of adding new positions ahead of the Federal Reserve’s monetary policy decision and gains from major companies, including Facebook,

Apple and Tesla next week, he added.

Ahead of the opening bell in New York, shares of International Business Machines fell 7.7% after the company said it expects to return to revenue growth this year, after reporting a 4.6% decline in 2020. Intel fell 3.8 percent after the chip maker posted $ 20.9 billion in net revenue for 2020, down from $ 21.1 billion a year earlier.

Paint manufacturer PPG Industries said sales volume fell in the fourth quarter, pushing shares up by 3.9%. Seagate Technology lost 4.8% after the data storage company released results.

Of the 62 companies on the S&P 500 that reported results by the end of Thursday, 89% exceeded analysts’ expectations, according to FactSet.

“So far, so good,” said Fredrik Öberg, chief investment officer for private banking at SEB, highlighting the results from Netflix, BlackRock and several banks.

Stocks generally declined in overseas markets, and oil prices fell amid concerns that coronavirus restrictions have eroded demand for crude oil. Surveys by purchasing managers in Europe have shown that high coronavirus rates and government borders increase the risk of the second recession since the pandemic hit.

The parallel IHS Markit polls, which will take place at 9:45 a.m. ET, should show that the US manufacturing and services sectors continued to grow in January. Also on Friday, home sales data are expected to show a decline for the second month in a row in December.

The pan-European Stoxx Europe 600 index fell 1%, led below by energy companies and tourism and leisure companies, whose profits are closely linked to the economy’s wealth. Brent crude oil futures, a benchmark in international energy markets, fell 2.3 percent to $ 54.82 a barrel, and West Texas Intermediate, the U.S. oil benchmark, fell 2.4 percent to 51 percent. $ 83 a barrel.

Political uncertainty has put pressure on assets in Italy, where the FTSE MIB benchmark fell by 1.8% after a local newspaper reported that Prime Minister Giuseppe Conte was considering quick elections. Mr Conte is under pressure to strengthen parliamentary support for his government, a task that seems increasingly difficult, raising the prospect of new elections in the spring.

The cautiously optimistic comments of European Central Bank President Christine Lagarde on Europe’s recovery have also influenced Italian bonds, analysts said. 10-year Italian government bond yields rose 0.724% from 0.677% on Thursday. Yields increase as prices fall.

Among individual European stocks, Siemens rose 5% after the German engineering company said preliminary quarterly results far exceeded market expectations. Volkswagen said deliveries rose in the fourth quarter, boosting the German carmaker’s shares by 4.6%.

In Asia, Hong Kong’s Hang Seng Index fell 1.6% less after a local newspaper reported that the city would place tens of thousands of people to control Covid-19. China’s Shanghai composite fell 0.4%.

Andersen said he is closely following the outbreaks of coronavirus in China and Hong Kong, after many Asian economies quickly recovered from the pandemic last year.

“Of course, there is a risk that this locomotive in Asia will be injured by this, but we believe they have it under control,” he said.

Write to Joe Wallace at [email protected]