January 20, 2022

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U.S. Stock Index Futures Rise as Countries Look at Reopening

(Bloomberg) —

U.S. stock index futures gained as countries across the globe weighed when it would be safe to ease restrictions set in place to help contain the spread of coronavirus.

Contracts on the S&P 500 gained 1% as of 9:02 a.m. in London, after declining 0.7% on Monday. Futures on the Nasdaq 100 and the Dow Jones Industrial Average rose 1.2%. President Donald Trump declared he has “total” authority to order states to relax social distancing to combat the coronavirus outbreak and reopen their economies.

U.S. stock futures got a boost during Asian trading hours after data showed China’s exports in yuan terms fell less than expected in March and Xinhua News Agency reported that two companies got approval to begin human clinical tests for coronavirus vaccines.

European stocks rose as they reopened after the Easter holiday weekend, with the Stoxx Europe 600 Index advancing as much as 1.3%, led by health-care and miners.

With earnings season kicking off this week, traders are looking for a sense of how bad the hit to global profits could be as the pandemic upends the global economy.

Investors will be keeping particular watch on earnings due from the U.S. financial sector in coming days, said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management. “Once the results come, futures will adjust accordingly.”

On Monday, the S&P 500 closed 1% lower, paring a drop of as much as 2.5%, with gains in consumer discretionary, technology and communication companies partly offsetting declines in other major groups. Oil slipped as investors weighed whether an unprecedented deal by the world’s biggest producers to cut output could stabilize the market.

The S&P 500 is trading below 2,800 — a major support line in 2019 that served as resistance the prior year. With one of the murkiest earnings seasons kicking off this week, there may be few catalysts to push stocks higher.

“We’re in for a tough year,” Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America Corp., said in a Bloomberg Television interview. Earnings are going to be down “by about 30%,” she said.

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