Business

Futures inch lower ahead of results from Wall Street lenders

U.S. stock index futures slipped on Friday as optimism over a US$1.9 trillion stimulus plan unveiled by incoming President Joe Biden faded with investors turning to quarterly reports from major Wall Street banks.

A Wall St. sign is seen near the NYSE in the financial district in New York
FILE PHOTO: A Wall St. sign is seen near the New York Stock Exchange (NYSE) in the financial district in New York, U.S., November 24, 2020. REUTERS/Brendan McDermid

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REUTERS: U.S. stock index futures slipped on Friday as optimism over a US$1.9 trillion stimulus plan unveiled by incoming President Joe Biden faded with investors turning to quarterly reports from major Wall Street banks.

JPMorgan Chase & Co, Citigroup Inc and Wells Fargo & Co will unofficially kickoff the fourth-quarter earnings season before the bell and investors will focus on their outlooks to validate expectations for a strong 2021 rebound in earnings and the economy.

Shares of the three banks slipped about 0.6per cent in premarket trading.

Earnings for S&P 500 companies are expected to decline 9.5per cent in the final quarter of 2020 from a year ago, but are expected to rebound in 2021, with a gain of 16.4per cent projected for the first quarter, according to IBES data from Refinitiv.

Biden's stimulus package proposal, unveiled on Thursday, includes US$415 billion to accelerate the distribution of vaccines, some US$1 trillion in direct relief to households, and roughly US$440 billion for small businesses and communities particularly hard hit by the pandemic.

"There appears to be a some 'sell-the-news' price action in equities, given that a lot of the optimism surrounding another injection of US fiscal stimulus had already been priced in ahead of the keenly awaited announcement," said Han Tan, Market Analyst at FXTM.

Some investors worried that the government will need to fund the spending through tax hikes eventually.

Wall Street's main indexes closed lower after the Dow and the Nasdaq hit record highs during the session on bets of a hefty package and vaccine distribution.

At 6:35 a.m. ET, Dow E-minis were down 135 points, or 0.44per cent, S&P 500 E-minis were down 17 points, or 0.44per cent. Nasdaq 100 E-minis were down 40.75 points, or 0.32per cent.

Hewlett Packard Enterprise Co rose 1.2per cent after J.P. Morgan upgraded the enterprise software maker's stock to "overweight" from "neutral".

(Reporting by Devik Jain in Bengaluru; Editing by Maju Samuel)

Source: Reuters