Global stocks trade nervously ahead of mega-tech earnings, while Brent crude hovers near $90
Andrew Kelly/Reuters
- Global stocks kicked off a crucial week for the battered tech sector by trading mixed on Monday.
- Investors are anticipating results from mega-cap tech titans Facebook, Google, and Amazon.
- Oil prices continued trading at seven-year highs ahead of an OPEC+ meeting on Wednesday.
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Global stocks traded mixed Monday in a big week of earnings for the tech sector, while geopolitical tensions around Russia and Ukraine were helping drive oil prices higher.
Futures on the Dow Jones and the S&P 500 swung between gains and losses, while those on the Nasdaq rose 0.5% as of 5:20 a.m ET, pointing to a mixed start to trading later in the day.
Following last week's Federal Reserve-inspired volatility of large intraday swings in the market, sentiment for the tech sector is slowly shifting to positive after bullish results from Microsoft and Apple.
"While the Fed, macro, and geopolitical (Russia/Ukraine) issues have created a 'perfect storm sell-off' over the last month with tech stocks seeing red screens on a daily basis, the most important tech earnings season in a decade is now the focus of the Street and so far investors like what they see," Wedbush analysts said in a Monday note.
More than 100 companies in the S&P 500 are due to report earnings this week. Within the battered tech sector, Google parent Alphabet is due to release earnings Tuesday, followed by Facebook on Wednesday and Amazon on Thursday.
The market is pricing in a more hawkish Fed, with at least five rate hikes expected this year. While initial expectations were for a quarter-percent rise, Atlanta Fed President Raphael Bostic suggested in a Financial Times interview Friday that the Fed could hike by a half-point in March if needed.
Not much is on the Fed's diary for this week, but data releases on the economic calendar includes the final global Purchasing Managers Index and JOLTS job openings on Tuesday, and the January US jobs report on Friday.
Economists expect the headline nonfarm-payrolls figure to show a subdued rise of just 150,000, given that it will be impacted by the Omicron coronavirus variant.
Also in focus are the European Central Bank and the Bank of England's latest monetary policy decisions on Thursday, with many economists predicting UK policymakers will increase interest rates again.
In Europe, stocks traded higher on the prospect of positive corporate earnings.
London's FTSE 100 was broadly flat. The pan-European Euro Stoxx 600 added 0.8%, while Frankfurt's DAX moved up 1.08%.
Lunar New Year holidays in Asia meant thin trading in the region, and stock markets closed mixed. Data on Sunday showed China's factory activity contracted by the sharpest rate in nearly two years in January.
The Shanghai Composite dropped 0.97%. Hong Kong's Hang Seng and Tokyo's Nikkei each closed 1.07% higher.
Oil prices hovered near seven-year highs as tensions over Ukraine are still attracting the market's attention, ahead of the OPEC+ meeting on Wednesday to discuss a March production increase.
"Given the higher prices and failure to live up to prior output agreements, OPEC won't find it hard to lift output by another 400,000 barrels — this is priced, so I don't expect a lift in output to rock the crude price too intently," said Chris Weston, Pepperstone's head of research.
Brent crude futures at last check were up 0.6% at $89.07 a barrel, pulling back somewhat after breaking through the $90 level to hit $91.31 earlier Monday. Meanwhile, West Texas Intermediate put on 0.7% to reach $87.44 a barrel. Prices were around $55 this time last year.
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