US futures were mixed on the last trading day of January, with contracts on the Dow Jones falling more than 150 points while the S&P 500 edged lower and the Nasdaq attempted to remain in the green. So far on the month, the Dow and S&P 500 are down 5% and 7%, respectively, and head for their worst month in over a year. The Nasdaq is off by 12% and is on track for its worst month since October 2008. Markets have been volatile this month due to concerns the Fed will adopt a more hawkish monetary policy with investors increasingly betting on 5 rate hikes in the fed funds rate until December. Also, the earnings season has seen some surprises on the downside. Advanced Micro, Exxon Mobil, GM, Alphabet, Meta, Amazon, Honeywell, Ford, PayPal, and Wynn Resorts are due to report this week. The payrolls report, JOLTS and ADP figures will also be in the spotlight this week.
European stocks struggled to hold early gains on Monday, after booking 4 straight weeks of losses. The Dax added around 0.3% after gaining more than 1% early in the session.. The Eurozone economy expanded 0.3% in Q4 as expected but the Italian economy advanced at a faster-than-anticipated 0.6%. On the corporate front, Ryanair took a cautious note on travel rebound while posting a bigger-than-expected loss of €96 million in Q4. Quarterly results from UBS and Roche this week and the ECB monetary policy decision on Thursday will also be in the spotlight.
The FTSE 100 reversed early gains to trade little changed around the 7460 level on Monday, following an 88-point drop on Friday, and tracking global cues from its European peers. On the corporate front, Vodafone was among the top performers (3%) after the company said it will work with Intel on designing its own chip architecture to drive innovation. Ryanair took a cautious note on travel rebound while posting a bigger-than-expected loss of €96 million in Q4. Meanwhile, investors brace for a busy week with the BoE monetary policy decision and earnings from Shell, Virgin Money and Glencore.
The CAC 40 index erased initial gains to trade 0.1% lower at 6,960 on Monday. Casino Guichard shares plunged 15% after the group lowered its gross operating surplus forecasts for French retail brands during 2021. Consequently, other retail shares traded in the red, driven by Carrefour (-5.8%). On the other hand tech stocks traded 1% higher in the wake of Nasdaq’s rally last session, led by STMicroelectronics (1.9%), while Kering (1%) and Hermes (0.9%) carried the luxury goods sector. On the data front, the Eurozone economy expanded 5.2% during 2021 and 0.3% quarterly during Q4, while forecasts expect the euro area to grow by 4.2% in 2022.
The FTSE MIB Index traded 0.8% higher at the 26,770 level on Monday, supported by tech and banking shares. STMicroelectronics (1.7%) led the gains among the technology sector, while UniCredit (1.9%) rose the most among the banks. On the other hand, Saipem lost 31.9% after the refinery warned it will take a heavy loss for 2021. On the data front, the Italian economy expanded 0.6% during the fourth quarter, beating market expectations, while the euro area expanded 0.3%. On the political front, Sergio Mattarella was re-elected as the Italian president on the eighth voting round, after six days of stalemate.