Futures Down, Asia Celebrates Lunar New Year

  • US stock futures sunk into negative territory on Tuesday after holiday-thinned trade overnight in Asia.
  • European indices got off to a strong start, thanks to robust earnings from the likes of Swiss bank UBS.
  • Investors will scour Q4 results from Google parent Alphabet, as mega-cap tech company earnings roll in.
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US stock futures eased on Tuesday, as investors booked profits on the end-of-January rally that lifted the benchmark indices the day before, while in Europe, strong earnings from the likes of Swiss bank UBS helped lift the broader equities market. 

January was an exceptionally choppy month.


hit its highest since late-2020, as the

Federal Reserve

took a far more hawkish stance towards inflation and monetary policy, while the spread of the omicron variant of Covid-19 continued to hamper economic activity, prompting a sell-off in stocks.

S&P 500 futures and the NASDAQ 100 futures were both down on Tuesday, losing 0.22% and 0.10% respectively, while trading overnight was thinned out by public holiday in Asia for the Lunar New Year celebrations this week.

Meanwhile, Europe’s Stoxx 600 was up 1.2% on Tuesday, following upbeat news on the earnings front from Swiss investment bank UBS, which beat forecasts and announced a bumper $5 billion share buyback program.

As well as the key monthly US employment report later this week, meetings by policymakers at the European Central Bank and the Bank of England this week have encouraged investors to book profits on sovereign bonds in Europe, which has pushed up yields, similar to the run-up in Treasury yields over the past few weeks, according to Deutsche Bank. 

“Rising expectations about rate hikes led to a fresh selloff among sovereign bonds in Europe, where yields on 10-year Bunds were up +5.5 basis points to close in positive territory for the first time since May 2019, at 0.01%,” Deutsche strategists said in a daily note.

Investors will also be watching out for fourth-quarter earning from some of the world’s largest tech companies. Google parent company Alphabet is due to report on Tuesday, while Amazon will release its results later in the week. What has been an impressive earnings season so far for big tech in the US is expected to continue today with analysts at IG expecting Alphabet to report revenue of $72 billion, an increase of $7 billion from its reported third-quarter earnings.

“Alphabet is expected to report revenue of $72 billion, up from $65 billion in the third quarter (Q3). Earnings per share are expected to fall to $27.40 from $27.99 in the previous quarter. Revenues continue to be driven by growth in its search engine division, helped by growth in its mobile search element,” IG strategist Chris Beauchamp said.

Finally, the cryptocurrency market returned gains on Tuesday as the ethereum network saw its native token ether up almost 8% according to CoinMarketCap data, while bitcoin was up 2.78%.

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