NEW YORK, April 15 — World stocks retreated from earlier gains today as underwhelming quarterly results from US banks weighed on Wall Street, though progress in US-China trade talks helped European stocks tread water.
The US benchmark S&P 500 stock index dipped after Goldman Sachs Group and Citigroup Inc both reported quarterly revenue below consensus estimates.
Wall Street’s negative turn weighed on MSCI’s gauge of global equities, which dropped 0.1 per cent.
Investors are focused on the US earnings season to gauge the strength of corporate America in the face of major challenges to growth.
While US corporate earnings are widely expected to drop year-over-year for the first quarter, analysts anticipate an increase in revenue. As a result, equity investors will likely follow top-line results closely, said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York.
“People are focusing on the revenue numbers, and they’re virtually in line if not slightly disappointing so far,” he said.
In Europe, the STOXX 600 edged up 0.1 per cent as optimism over trade relations provided ballast for the index even as corporate earnings disappointed.
US Treasury Secretary Steven Mnuchin said he hoped US-China trade talks were approaching a final lap.
Also, Reuters reported on Sunday that US negotiators have tempered demands that China curb industrial subsidies as a condition for a trade deal after strong resistance from Beijing.
Trade hopes, combined with strong Chinese export and euro zone industrial production data on Friday, have lifted European equities.
Equities and other risky assets have been volatile this year over worries of a slowdown in the United States and other major economies.
Investors this week will be scrutinizing data - including Germany’s ZEW survey and Chinese gross domestic product due on Wednesday - for signs of whether a global economic slowdown is turning around.
US retail sales and housing data, which will give a glimpse into whether the US economy is withstanding that broader slowdown, are also scheduled for release this week.
Ahead of those data, US Treasury yields fell from four-week highs today, while the dollar index, which measures the greenback against a basket of six other currencies, dropped slightly.
Benchmark 10-year notes last rose 1/32 in price to yield 2.5561 per cent, from 2.56 per cent late on Friday.
The dollar index fell 0.05 per cent.
In US equities, the Dow Jones Industrial Average fell 50.34 points, or 0.19 per cent, to 26,361.96, the S&P 500 lost 5.52 points, or 0.19 per cent, to 2,901.89 and the Nasdaq Composite dropped 24.85 points, or 0.31 per cent, to 7,959.31.
In commodities, oil provided big milestones last week, with Brent breaking through the US$70 threshold and the US benchmark posting six straight weeks of gains for the first time since early 2016.
On Monday, though, Brent crude futures fell 37 cents to US$71.18 (RM292.9) a barrel, a 0.5 per cent loss, on signals that Russia may exit production cuts. US West Texas Intermediate (WTI) crude futures fell 65 cents to US$63.24 a barrel, a 1.0 per cent loss. — REUTERS
