Global markets lower ahead of US earnings

The majority of companies so far this earnings reporting season have been beating forecasts. Wall Street is also waiting for the first estimate of how quickly the US economy grew in the first three months of the year. Economists expect growth to slow to 1.9% at an annual rate, down from 2.6% in the final quarter of 2022

Beijing: Global stocks and Wall Street futures declined on Tuesday as investors awaited US earnings reports and an update on economic growth. London and Frankfurt opened lower. Shanghai and Hong Kong declined, while Tokyo advanced.

Oil prices were little-changed. Some 170 of the biggest US companies including Microsoft and Amazon are due to report earnings this week. On Monday, Wall Street's benchmark S&P 500 index gained 0.1 per cent after Coca-Cola Co’s quarterly profit was better than expected.

Also this week, US data are expected to show economic growth is slowing following interest rate hikes to cool stubbornly high inflation. France and Germany also are due to report economic growth after surveys showed factory activity weakening. If the economy cools, tech stocks will face a difficult environment maintaining high prices that have helped to buoy the market, Edward Moya of Oanda said in a report.

He said stocks face big risks from corporate earnings and a battle in Washington over raising the government’s debt limit.

In early trading, the FTSE 100 in London fell 0.4 per cent to 7,880.69 and the DAX in Frankfurt lost 0.3 per cent to 15,811.08. The CAC 40 in Paris retreated 0.8 per cent to 7,517.41. On Wall Street, the S&P 500 future was off 0.5 per cent. That for the Dow Jones Industrial Average was 0.4 per cent lower.

On Monday, the Dow rose 0.2 per cent while the Nasdaq composite slipped 0.3 per cent. In Asia, the the Shanghai Composite Index lost 0.8 per cent to 3,264.87 while the Nikkei 225 in Tokyo gained less than 0.1 per cent to 28,620.07. The Hang Seng in Hong Kong sank 1.9 per cent to 19,578.20. The Kospi in Seoul fell 1.4 per cent to 2,489.02 after South Korea reported unexpectedly strong economic growth in the first quarter, avoiding a technical recession. Korean economic activity expanded by 0.3 per cent over the previous three-month period, rebounding from a 0.4 per cent contraction. India's Sensex advanced less than 0.1 per cent to 60,105.07. Singapore and Bangkok declined. New Zealand and Australian markets were closed for a holiday. Analysts expect companies in the S&P 500 to report their biggest drop in earnings since the spring of 2020, when the pandemic paralysed the economy.

The majority of companies so far this earnings reporting season have been beating forecasts. Wall Street is also waiting for the first estimate of how quickly the US economy grew in the first three months of the year. Economists expect growth to slow to 1.9 per cent at an annual rate, down from 2.6 per cent in the final quarter of 2022. Higher rates have slowed US housing sales by making mortgages more expensive. Manufacturing and other areas of the economy have also shown pain, while the job market has stayed resilient. The Federal Reserve meets next week. Much of Wall Street expects the US central bank to raise interest rates at least one more time before pausing. Many traders are betting the Fed will cut rates later this year to prop up the economy. But Fed officials have insisted they will keep rates high at least through the end of this year. In energy markets, benchmark US crude lost 7 cents to $78.69 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 89 cents on Monday to $78.76. Brent crude, the price basis for international oil trading, added 6 cents to $82.60 per barrel in London. It advanced $1.07 the previous session to $82.73. The dollar declined to 134.13 yen from Monday’s 134.27 yen. The euro retreated to $1.1035 from $1.1046. (AP)