Stock markets today: Global markets lower before U.S. earnings

BEIJING –

Global stocks and Wall Street futures declined Tuesday as investors awaited U.S. 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 U.S. 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% after Coca-Cola Co.’s quarterly profit was better than expected.

Also this week, U.S. 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% to 7,880.69 and the DAX in Frankfurt lost 0.3% to 15,811.08. The CAC 40 in Paris retreated 0.8% to 7,517.41.

On Wall Street, the S&P 500 future was off 0.5%. That for the Dow Jones Industrial Average was 0.4% lower.

On Monday, the Dow rose 0.2% while the Nasdaq composite slipped 0.3%.

In Asia, the the Shanghai Composite Index lost 0.8% to 3,264.87 while the Nikkei 225 in Tokyo gained less than 0.1% to 28,620.07. The Hang Seng in Hong Kong sank 1.9% to 19,578.20.

The Kospi in Seoul fell 1.4% 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% over the previous three-month period, rebounding from a 0.4% contraction.

India’s Sensex advanced less than 0.1% 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 paralyzed 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 U.S. 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.

Higher rates have slowed U.S. 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 U.S. 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 U.S. crude lost 7 cents to US$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.