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Futures contracts tied to the major U.S. stock indexes held steady in early morning trading on Monday as investors braced for one of the busiest weeks of the first-quarter earnings season.

Contracts linked to the S&P 500 hovered above the flatline while those tied to the Dow gained 46 points. Nasdaq 100 futures sat marginally lower.

Investors are due for a busy week ahead between a Federal Reserve meeting, the debut of President Joe Biden’s “American Families Plan,” more inflation data and ongoing corporate earnings reports.

 

Futures for Eurostoxx 50 were flat as were those for Germany's DAX while London's FTSE futures were a shade weaker. E-mini futures for the S&P 500 were barely changed.

The mood was relatively upbeat in Asia where MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) reached its highest since March 18, despite a late sell-off in Chinese shares.

Fears surging COVID-19 cases in India will drive down fuel demand in the world's third-biggest oil importer put pressure on oil prices on Monday after they fell about 1% last week.

China's blue-chip CSI 300 index (.CSI300) fell 0.7% after hitting its highest level since April 6 earlier in the day. Australia's benchmark share index (.AXJO) was off 0.2% with a public holiday in five of the country's eight states and territories.

South Korea's KOSPI share index (.KS11) rose 0.7% while New Zealand shares added 0.6%.

So far, risk assets such as equities have done well, with the MSCI ex-Japan index on track for a third straight year of positive returns. Since April 2020, the index has offered positive returns in all but three months.

Recent data pointing to a solid global economic recovery had bolstered confidence in risk assets.

Early April manufacturing activity indicators out last week pointed to a robust start to the second-quarter with data hitting record highs in the United States and signalling an end to Europe's double-dip recession.

First-quarter U.S. gross domestic product data due later in the week is likely to show activity probably returned to pre-pandemic levels, analysts said.

"We estimate that the economy will close the output gap and rise above potential in the second half of this year," ANZ economists wrote in a morning note, suggesting more upside for shares.

Europe "cannot match this, but as 2021 progresses into 2022, the growth differential to the U.S. will narrow."

 

·         Japanese shares end higher, led by travel-related stocks

Japanese shares settled higher on Monday as travel-related stocks bounced back from losses driven by fears of coronavirus curbs, and after ANA forecast a smaller-than-expected full-year loss.

The Nikkei share average inched up 0.36% to close at 29,126.23, while the broader Topix edged up 0.17% to 1,918.15.

Travel-related shares led the gains after their big declines in recent weeks as investors closed their selling positions made in anticipation of social restrictions to curb the fourth wave of COVID-19 infections.

Japan on Friday declared “short and powerful” states of emergency for Tokyo, Osaka and two other prefectures, requiring restaurants, bars and karaoke parlours serving alcohol to close.

 

·         Singapore’s top banks could see a boost in share prices as earnings bounce back

 Singapore’s three largest banks are expected to report improved earnings as the global economy recovers from the Covid-19 pandemic, said analysts. 

 

·         Krishna Guha, an equity analyst at investment bank Jefferies, said in a report this month that a better earnings outlook could send the city-state’s bank stocks higher.

The analyst has a “buy” rating on all three banks and raised his price targets for them in early-April.

 

 

 

European stocks were muted on Monday morning as investors gear up for a busy week on the data and earnings front.

The pan-European Stoxx 600 hovered 0.1% above the flatline in early trade, with autos sliding 0.8% while basic resources gained 1%.

European market sentiment could be overshadowed by economic events and data in the U.S. this coming week, with more U.S. corporate earnings due (some of the largest companies in the world are scheduled to publish results this week including Apple, Microsoft, Amazon and Alphabet) as well as big data releases, including the latest gross domestic product data due Thursday and inflation data Friday.

 

·         FTSE 100 falls as stronger pound, oil stocks weigh; Pearson shines

London's FTSE 100 edged lower on Monday as export-oriented companies and heavyweight energy stocks dipped, while shares of Pearson jumped on an upbeat first-quarter earnings update.

The blue-chip index (.FTSE) fell 0.2% as a stronger pound hit shares in large dollar-earning consumer staples companies Diageo (DGE.L), British American Tobacco (BATS.L) and Unilever (ULVR.L).

 

 

Reference: CNBC, Reuters