Global stocks and U.S. stock futures rose on Monday, as investors awaited a busy week of corporate profits, economic data and central bank decisions.
Futures linked to the S&P 500 increased 0.1% after the benchmark stock indicator reported its biggest loss in a week since the end of October. The US stock and bond markets are closed on Monday for Martin Luther King Day.
Shares have faltered in recent days, after a strong start to the year fueled by the hope of a vaccine-induced economic recovery that could be helped by further fiscal stimulus under the new government. While many investors expect the recovery to continue, they say stocks are likely to remain unstable in the coming weeks amid signs that high rates of coronavirus cases are hurting economic activity.
“In a way, markets are leading the recovery and normalization of economic activity,” said Agnès Belaisch, chief strategist for Europe at the Barings Investment Institute. Inventories are expected to pause intermittently due to the disconnect between the market and the way Covid-19 restrictions are hurting the economic recovery, she said.
This week, investors will review the quarterly earnings of dozens of large companies, including JB Hunt Transport Services, UnitedHealth Group and Intel, for guidance on earnings and revenue prospects throughout 2021. Monetary policy decisions by the European Central Bank and Bank Japan’s World Cup are also available, as well as surveys that will give an indication of business activity earlier this year and the inauguration of President-elect Joe Biden.