US stock futures dip as investors eye Big Tech earnings, while Asian equities slide on escalating Chinese clampdowns
- Global stock
marketstraded lower on Tuesday as investors moved into wait-and-see mode.
- Alibaba and Meituan shares slide in Hong Kong, on worries about
China's regulatory crackdowns.
- The US rise in
COVID-19cases could prompt the Fed to stick to its pace of asset purchases, a strategist said.
Tesla reported earnings well above analyst estimates on Monday afternoon, with quarterly revenue at $11.95 billion, compared with an expected $11.36 billion. Its stock was changing hands almost 3% higher in Tuesday's premarket session.
The Big Tech companies scheduled to report results on Tuesday are Apple, Microsoft, and Alphabet, expected to post after the market close. Also on the docket are Visa, UPS, Starbucks, and General Electric. More than one-third of the S&P 500 companies are expected to post earnings this week, with Facebook due on Wednesday.
Wall Street has moved into a wait-and-see mode ahead of US Big Tech earnings and the Federal Open Markets Committee policy meeting, which starts today, Jeffrey Halley, a senior market analyst at OANDA, said in a note.
The US recently reported an average of nearly 50,000 COVID-19 cases in all 50 states. This could give the doves on the FOMC an extra bit of leeway in sticking to the Federal Reserve's current pace of quantitative easing, even though the economy exited recession 15 months ago, according to Danielle DiMartino Booth, chief strategist at Quill Intelligence.
"We expect Jay Powell to reiterate that the tapering discussion is underway, but that it's too soon to reveal a specific date on when the initial curtailment of asset purchases will begin," Quill CEO Booth said, referring to the Fed chair.
"Because home prices have risen at a blistering double-digit pace for 13 straight months, there is a risk of a dissent on the FOMC in this week's meeting," she added.
Markets in Asia remained under pressure as investors worried about the escalating regulatory crackdowns in China. The technology sector was the first to bear the brunt of stepped-up rules, followed by the after-school education and property-development sectors.
The Hang Seng, Hong Kong's benchmark index, fell 4.4% to log its third day of declines, and the Shanghai Composite lost 2.4%, as investors brace for more companies to be affected by new regulations. Meanwhile, Tokyo's Nikkei rose 0.4%.
Shopping platform provider Meituan and e-commerce giant Alibaba were the biggest decliners in Hong Kong, dropping 16.1% and 5.5% respectively, as Chinese regulators called for steps to ensure food-delivery workers make at least the local minimum wage. Food-delivery platforms in the region have drawn criticism over their treatment of delivery workers, most of which aren't covered by basic social and medical plans.
"The repricing of China regulatory risk is likely to continue for some time yet," Halley said.
European sentiment was largely hit by weakened Asian markets, although the UK reported its fastest weekly reduction in COVID-19 cases since April 12. London's FTSE 100, Euro Stoxx 50, and Frankfurt's DAX each declined 0.4%.
Bitcoin reversed gains in the previous session, falling 4% to around $37,000 after Amazon denied speculation about its specific plans for cryptocurrencies. That brings bitcoin's year-to-date gains to 28%, though the coin is still about 42% below its high of nearly $65,000 in mid-April.
- India vs Pakistan at ICC T20 World Cup: The ‘Men in Blue’ have a definite advantage in this one
- Tamil drama 'Koozhangal' is India's official entry for Oscars 2022
- ICICI Bank net profit rises 25% on lower provisions in September quarter
- Best keyboard for writers in India
- Best large size party speakers in India