Rate-hike fears keep stocks rangebound
Source: AFP
European and US stocks moved little Monday as investors awaited more company earnings and worried that central banks may keep raising interest rates for longer than expected.
In Europe, London's FTSE 100 rose but the Paris CAC 40 ended lower after striking a fresh record-high at 7,552 points earlier in the day.
On Wall Street, the Dow edged higher in late morning trading, but the S&P 500 and Nasdaq Composite both dipped as investors prepare for a raft of corporate results in the United States this week that could give insight into the health of the world's biggest economy.
"Stocks have been left bereft this afternoon with little on the calendar today, and ahead of earnings tomorrow," said Chris Beauchamp, chief market analyst at online trading platform IG.
"‘Muted’ is perhaps the best way to describe the session, though it will no doubt heat up tomorrow once earnings start to come through thick and fast," he added.
The dollar firmed on prospects of more US rate-tightening and oil prices slipped.
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While analysts say cooler inflation has eased pressure on the US Federal Reserve, European Central Bank and Bank of England to keep raising borrowing costs, consumer prices remain elevated.
"I don't think all of the rate hikes have worked their way through the system and it looks as though the Fed is going to continue to tighten," said Frances Stacy, at Optimal Capital Advisors.
"I don't think we're completely out of the woods yet," Stacy added, following data Friday showing a sizeable drop in US retail sales.
Markets fear that the monetary tightening by central bankers will tip the economy into recession.
The collapse of US regional banks last month was largely blamed on the higher interest rates, which brought down the value of bond portfolios.
Forecast-beating earnings from US banking titans last week further eased concerns about the sector.
While JPMorgan reported a surge in profits to $12.6 billion last week, it also took additional reserves, citing "an increased probability of a moderate recession due to tightening financial conditions".
"That word -- recession -- is hanging over the market, not like a death sentence at this point but more so like a chronic illness, which is to say the market is having difficulty escaping from it," said Briefing.com analyst Patrick O'Hare.
Other major companies are releasing first-quarter results this week, including Bank of America, Morgan Stanley, Johnson & Johnson, Netflix, Tesla, Ericsson and Nokia.
Elsewhere, traders were keenly awaiting the release of Chinese growth data Tuesday that provides the first snapshot of how the economy has fared without painful zero-Covid restrictions.
Analysts polled by AFP expect an average of 3.8 percent year-on-year growth in January-March.
Key figures around 1530 GMT
New York - Dow: UP less than 0.1 percent at 33,899.95 points
London - FTSE 100: UP 0.1 percent at 7,879.51 (close)
Paris - CAC 40: DOWN 0.3 percent at 7,498.18 (close)
Frankfurt - DAX: DOWN 0.1 percent at 15,789.53 (close)
EURO STOXX 50: DOWN 0.5 percent at 4,367.61 (close)
Tokyo - Nikkei 225: UP 0.1 percent at 28,514.78 (close)
Hong Kong - Hang Seng Index: UP 1.7 percent at 20,782.45 (close)
Shanghai - Composite: UP 1.4 percent at 3,385.61 (close)
Euro/dollar: DOWN at $1.0920 from $1.0997 on Friday
Pound/dollar: DOWN at $1.2364 from $1.2416
Dollar/yen: UP at 134.45 yen from 133.75 yen
Euro/pound: DOWN at 88.30 pence from 88.53 pence
West Texas Intermediate: DOWN 1.4 percent at $81.39 per barrel
Brent North Sea crude: DOWN 1.3 percent at $85.21 per barrel
Source: AFP
