(Bloomberg) — U.S. futures fell on Friday as investors turned their attention to the start of the earnings season and inflation concerns continued to weigh on sentiment. Treasury yields rose and the dollar held.
U.S. benchmarks were poised to extend declines, with JPMorgan Chase & Co. and Citigroup Inc. dropping in premarket trading after reporting disappointing results. Technology companies — which are seen as most sensitive to higher rates — led declines in Europe and Asia after a slew of Federal Reserve officials signaled that they’ll combat inflation aggressively.
Investors will focus on earnings over the next few weeks to assess companies’ performances amid soaring inflation, pandemic restrictions and backlogs. U.S. retail sales slumped in December by the most in 10 months, suggesting the fastest inflation in decades is taking a greater toll on consumers just as the nation confronts more coronavirus infections.
Wells Fargo advanced after reporting higher-than-estimated revenue, while BlackRock Inc. became the first public asset manager to hit $10 trillion in assets, propelled by a surge in fourth-quarter flows into its exchange-traded funds.
Meanwhile, U.S.-listed casino stocks with operations in Macau rose in premarket trading after the announcement of much-anticipated changes to the local casino law aimed at tightening government oversight on the world’s largest gaming market.
In Europe, Electricite de France SA plunged by a record as the French government confirmed plans to force it to sell more power at a steep discount to protect households from surging wholesale electricity prices, a move that could cost the state-controlled utility 7.7 billion euros ($8.8 billion) at Thursday’s market prices.
A majority of strategists still see the rally in European equities continuing this year. The Stoxx Europe 600 Index will rise about 5.2% to 511 index points by the end of 2022 from Wednesday’s close, according to the average of 19 forecasts in a Bloomberg survey. Equity funds once more led inflows among asset classes in the week through Jan. 12, as investors reduced cash holdings, according to BofA and EPFR Global data.
Emerging-market stocks and currencies headed for the biggest weekly gains since early September as their outlook was boosted by the U.S. dollar’s worst start to a year since 2019. Oil headed for a fourth weekly advance, the longest streak since October.
Here are some key events coming up:
- U.S. business inventories, industrial production, University of Michigan consumer sentiment on Friday.
- New York Fed President John Williams speaks Friday.
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 fell 0.8% as of 8:40 a.m. New York time
- Futures on the Nasdaq 100 fell 0.9%
- Futures on the Dow Jones Industrial Average fell 0.7%
- The Stoxx Europe 600 fell 1%
- The MSCI World index fell 0.9%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1450
- The British pound was little changed at $1.3716
- The Japanese yen rose 0.5% to 113.60 per dollar
Bonds
- The yield on 10-year Treasuries advanced two basis points to 1.72%
- Germany’s 10-year yield advanced two basis points to -0.07%
- Britain’s 10-year yield advanced two basis points to 1.12%
Commodities
- West Texas Intermediate crude was little changed
- Gold futures rose 0.2% to $1,824.30 an ounce
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