After ending the previous session notably lower, stocks are likely to see further downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 232 points.
Concerns about the emergence of a new, more infectious Covid-19 strain in several parts of the world are likely to continue to weigh on the markets.
Many cities in China are already taking steps to stop the spread of the new strain, leading to worries about another round of painful lockdowns, especially in Shanghai or Beijing.
A Covid-19 resurgence and the resumption of Chinese lockdowns could put further pressure on a global economy that is already being squeezed by aggressive monetary policy tightening by the world’s central banks.
Investors may also be reluctant to get back into the markets ahead of what some expect to be a difficult quarterly earnings season.
However, snack and beverage giant PepsiCo (PEP) got the earnings season off to a positive start, reporting better than expected second quarter results and raised its full-year guidance.
Financial giants JPMorgan Chase (JPM), Morgan Stanley (MS), Citigroup (C) and Wells Fargo (WFC) are among the companies due to report their quarterly results in the coming days.
Following the lackluster performance seen last Friday, U.S. stocks showed a significant move to the downside during trading on Monday. The major averages regained ground after an early slump by once again came under pressure going into the close.
The major averages all ended the day firmly in negative territory, with the tech-heavy Nasdaq leading the way lower. While the Nasdaq plunged 262.71 points or 2.3 percent to 11,372.60, the S&P 500 slumped 44.95 points or 1.2 percent to 3,854.43 and the narrow Dow fell 164.31 points or 0.5 percent to 31,173.84.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index tumbled by 1.8 percent, while China’s Shanghai Composite Index slid by 1.0 percent.
The major European markets have also moved to the downside on the day. While the German DAX Index has fallen by 0.9 percent, the U.K.’s FTSE 100 Index is down by 0.5 percent and the French CAC 40 Index is down by 0.4 percent.
In commodities trading, crude oil futures are plunging $4.89 to $99.20 a barrel after falling $0.70 to $104.09 a barrel on Monday. Meanwhile, after sliding $10.60 to $1,731.70 an ounce in the previous session, gold futures are inching up $0.40 to $1,732.10 an ounce.
On the currency front, the U.S. dollar is trading at 136.76 yen compared to the 137.38 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0034 compared to yesterday’s $1.0040.
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