US futures and European stocks slip as concerns over economic recovery surface, while robust China GDP lifts Asian markets
- US and European
stocksdipped on Monday, while Asian stocks got a boost from solid China GDP.
- The week ahead will be busy for
marketsas Joe Biden's inauguration takes place Wednesday.
- The US dollar rebounded as Janet Yellen is set to affirm her support for a stronger dollar.
US futures and European stocks edged lower on Monday, as investor concerns over harsher coronavirus restrictions and lockdowns set off a sluggish start to the week.
"It won't be so lively in markets today," Deutsche Bank economists said, as US equity and bond markets are closed on January 18 on account of Martin Luther King Jr. Day.
But after the likely lull on Monday, the week ahead is expected to be a busy one, with President-elect Joe Biden's inauguration on Wednesday an "obvious focal point," they said.
US futures fell about 0.2%. President Trump's decision to restrict licenses to Huawei suppliers also seemed to be weighing on sentiment.
Market participants are counting on more stimulus measures being just around the corner, and are eager for Joe Biden to present more details about his ambitious economic agenda, said Milan Cutkovic, market analyst at Axi.
"We see further upside for equities, particularly those with exposure to a cyclical recovery," said Mark Haefele, chief investment officer at UBS Global Wealth Management. UBS recommends global small-caps at this time and has added a preference for financials in the Eurozone, given their low valuations and solid earnings prospects, he said.
China posted a solid 6.5% expansion in fourth-quarter GDP, becoming the only major economy to grow in 2020. Its economy grew 2.3% for the full year, according to official data released by China's National Bureau of Statistics.
The dollar index stood firmer at 90.87 on Monday after the Wall Street Journal reported Treasury Secretary nominee Janet Yellen will affirm her support for a stronger US currency.
Oil prices were flat. With many oil traders focused on Iranian production, which will rely on the potential lifting of US sanctions under Biden, there was a reluctance to buy oil futures that was compounded by the Martin Luther King holiday liquidity drain, said Stephen Innes, chief global market strategist at Axi.
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