US pre-open: Futures in the red as investors look ahead to Fed policy decision
By Iain Gilbert
Date: Monday 24 Jan 2022
(Sharecast News) - Wall Street futures were pointing to losses yet again on Monday as market participants braced for another week of corporate earnings and a key policy decision from the Federal Reserve Bank.
As of 1210 GMT, Dow Jones futures were down 1.17%, while S&P 500 and Nasdaq-100 futures had the indices opening 1.79% and 1.74% weaker, respectively.
The Dow closed 450.02 points lower on Friday as Netflix weighed on the tech-heavy Nasdaq and bond yields eased off somewhat but remained elevated.
Stocks looked set to continue their fall ahead of the bell on Monday as investors await the outcome of the central bank's two-day policy meeting on Wednesday. Market participants will look for any hints on exactly how much the Fed will look to raise interest rates by in 2022 and when it will start doing so.
Also in focus, while the yield on the benchmark 10-year Treasury note saw out last week lower at 1.76%, its current figure still marked a jump of about a quarter of a percentage point year-to-date.
On the macro front, the Chicago Federal Reserve's December national activity index will be published at 1330 GMT, while a flash reading of IHS Markit's January manufacturing PMI will follow at 1445 GMT.
In the corporate space, Halliburton declared a quarterly dividend of $0.12 per share as it posted fourth-quarter revenues and earnings per share that well and truly beat the firm's 2020 performance, while Peloton shares were in the green prior to the open after bouncing back more than 11% on Friday.
IBM will report earnings after the close, while Microsoft, Tesla and Apple will publish their latest quarterly figures later on in the week.
AJ Bell's Russ Mould said: "Anyone hoping for a measure of calm on the markets after a testing period is likely to be disappointed as we start what could be another turbulent week. The Federal Reserve is meeting on Wednesday amid expectations of a first interest rate hike in March and more increases to come this year than had previously been pencilled in. This has been signalled by a rise in bond yields.
"The hardening of monetary policy has negative implications for the valuations of tech stocks and they have seen big slumps in recent weeks. Perhaps Apple, Microsoft and Tesla can come to the rescue with some knockout numbers when they report this week. On the other hand, a series of disappointing updates from these technology titans would only undermine sentiment further."
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