Wall Street Leans Back Pre-Bell; Futures Red, Europe Higher, Asia Lower

Tuesday, January 26, 2021 6:05 AM | MT Newswires

Wall Street is leaning back pre-bell Tuesday with broad-market futures off 0.2% from Monday's close, as market denizens weigh prospects for the Biden Administration's $1.9 trillion fiscal-stimulus package. Senate Majority Leader Chuck Schumer said the President's stimulus-and-aid package may not pass the Congress before mid-March.

The Federal Reserve starts a two-day policy meeting, but observers expect no new policy signals from the central bank.

European bourses are bucking Asian cues and tracking higher on strength in financial issues, while Hong Kong, Shanghai and Tokyo exchanges closed lower on profit-taking and uncertainty regarding the US fiscal stimulus outlook.

Bitcoin trades at $32,336, West Texas Intermediate crude oil trades for $53.09 and 10-year US Treasuries offer 1.04%. Gold trades near $1,852 an ounce.

On the economic calendar is the Case-Shiller Home Price Index and also the FHFA House Price Index at 9 am ET. Both indices are for November, and are expected to show strong house price growth. The Conference Board's Consumer Confidence index for January posts at 10 am, with pundits positing little change. The Richmond Fed Manufacturing Index also posts at 10 am.

General Electric (GE), Verizon Communications (VZ), Johnson & Johnson (JNJ), Lockheed Martin (LMT) and American Express (AXP) report earnings pre-bell, among others.

In the futures, the S&P 500 is off 0.2%, the Nasdaq is off 0.4% and the Dow Jones is off 0.1%

In Europe, the British FTSE 100 is up 0.4%, the French CAC is up 0.9%, and the German DAX is up 1.3%.

Asian stock markets fell back Tuesday, as investors booked profits from markets at or near record highs, and weighed uncertain prospects for the US Biden Administration's $1.9 trillion fiscal stimulus package. Hong Kong led regional decliners with the Hang Seng off 2.6%, while Shanghai and Tokyo also fell back. Seoul's Kospi Index sank 2.1%, after setting a record-high close on Monday. Other regional exchanges were mostly lower. Sydney was closed on holiday.

In Japan, the Nikkei 225 opened lower and slumped through the day, finishing off 1.0% as traders booked profits with the index at 30-year highs, and weighed soft cues from the New York futures market. The 2.6% same-day tumble in Hong Kong also undercut sentiment, said analysts. Property issues fell back also, with the Tokyo Stock Exchange REIT Index declining 0.4%.

The Nikkei 225 lost 276.11 to 28,546.18, as losing issues outnumbered gainers 157 to 65.

Leading the upside on a down day were utility Tokyo Electric Power, aka Tepco (TKECF, 9501:Tokyo), up 4.9% as a harsh winter raises wholesale power rates in Japan.

Restaurant sales in Japan in 2020 fell 15.1% from 2019, largely due to the COVID-19 pandemic and related business restrictions, the Japan Food Service Association said Monday.

The Hong Kong Hang Seng Index, after passing the 30,000-milestone on Monday, fell 2.6% as traders booked profits from a strong January rally. Even with the day's setback, the Hang Seng is up 7.9% year-to-date, an upsurge that some commentators said resulted in too-high valuations.

The broad gauge Hang Seng retreated 767.75 to 29,391.26, as losing issues outnumbered gainers 37 to 13.

The Hang Seng TECH Index fell back 2.3%, but the Hang Seng REIT Index managed a 0.3% gain.

On the mainland, the Shanghai Composite fell 1.5% to 3,569.43.

In economic news, China should stop setting annual gross domestic product (GDP) growth goals, as such targeting leads to excessive borrowing and debt, warned Ma Jun, a policy committee member of the People's Bank of China (PBOC) and its former chief economist, The South China Morning Post newspaper reported. Beijing should concentrate on employment and controlling inflation as policy goals, Ma said.

On the other exchanges, the Taiwan TWSE declined 1.8%; the Singapore Straits Times Index fell 1.0%, but the Thai Set inclined 0.8%. In late trading in Mumbai, the Sensex was off 1.1%.

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