The US dollar fell and industrial commodities rose overnight despite corrective action in high flying technology shares. The flipside of the confident growth outlook is ongoing inflation concerns, reflected in rising bond yields. The pressure on US shares surprised some analysts after stronger than forecast corporate earnings.
Coca Cola, Prologis and IBM all reported earnings above consensus, yet consumer and IT shares were among the worst performers. The crash of a Tesla self-driving car hurt sentiment, and the company led tech stocks lower. However Zions Bancorp and M&T Bank continued the run of stronger reports from financial companies, and the sector outperformed the broader market.
Tonight Johnson & Johnson (EPS f/c $2.35), Procter and Gamble (EPS f/c $1.19), and Abbott Laboratories (EPS f/c $1.28) report, among others.
A weaker US dollar helped support crude oil prices, aided by the reported downgrading of next week’s OPEC+ meeting to a monitoring session. Markets are already factoring a gradual return of the group’s production to pore-cut levels.
Asia Pacific futures indicate opening falls of 0.5% to 1% across the region. China authorities will review 1 and 5 year lending rates, but no change is expected. Tonight brings the release of UK employment data and US retail sales.