Shell-shocked US markets look like opening considerably lower on Friday with participants still assessing the ramifications for wider markets of the move from the Swiss National Bank to remove its 4-year long peg to the euro on Thursday.
While European stock markets recovered early losses on Thursday on the prospects of quantitative easing from the ECB, US markets were less enthusiastic as rising global volatility and a spate of poor bank earnings left investors shy of risk.
As before the last two earnings seasons, US stocks markets have got very choppy as worries kick in that corporates are not able to overcome global market dislocations including falling commodity prices and the rising US dollar. The drop in December retail sales and diving copper prices have done nothing to ease investor concerns heading into the first major week of reporting.
Both Citigroup Inc (NYSE:C) and Bank of America Corporation (NYSE:BAC) reported disappointing fourth quarter earnings with profits down substantially on the year. Both banks saw ongoing weakness in the fixed income, currencies and commodities trading revenues with Citi setting aside another $3.5bn to cover legal settlements.
Intel Corporation (NASDAQ:INTC) could be a bright spot on Friday after it reported Q4 earnings well above expectations with revenues rising over 6% year-over-year.
Google Inc (NASDAQ:GOOGL) has stopped the trial sales of its ‘Google Glass’. The shelving of Google Glass won’t impact current revenues but is a disappointment for future growth prospects. This generation of electronics consumer still have some privacy concerns left and were not quite ready for Google Glass which essentially has Google tracking and analysing everything you see. Despite prolific publishing of private information of social networks, today’s online consumer is not quite yet willing to fully plug in.
Futures suggest the:
S&P 500 will open 10 points lower at 1,982 with the
Dow 30 expected to open 75 points lower at 17,245 and the
NASDAQ Composite 33 points lower at 4,056.
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