Dow Futures Fall 175 Pts; Payrolls, Tech Earnings Loom

© Reuters.

By Peter Nurse

AiVIF.com - U.S. stocks are seen opening in a cautious fashion Monday at the start of a week that includes the key monthly jobs report and earnings from the likes of tech giants Amazon (NASDAQ:AMZN) and Google-parent Alphabet (NASDAQ:GOOGL).

At 7 AM ET (1200 GMT), the Dow Futures contract was down 175 points, or 0.5%, S&P 500 Futures traded 10 points, or 0.2%, lower, while Nasdaq 100 Futures climbed 45 points, or 0.3%.

The major indices on Wall Street have sold off heavily in January as the potential for as many as six Federal Reserve rate hikes this year prompted investors to take some money off the table.

The blue-chip Dow Jones Industrial Average is down 4.4% this month, heading for its worst month since March 2020, while the broad-based S&P 500 is down 7%, its biggest monthly selloff since March 2020. The tech-heavy Nasdaq Composite stands in correction territory, down 12% in January and is on track for its worst month since October 2008.

More selling looks likely, according to Morgan Stanley strategist Michael Wilson. Last week’s wild swings were “classic bear market action.” he wrote in a note Monday, and “we remain sellers of rallies and of the view that S&P 500 fair value remains closer to 4,000 tactically,” The index closed Friday at 4431.85.

The earnings season continues this week, with reports from tech heavyweights Alphabet, Amazon, and Meta Platforms, as well as the likes of General Motors (NYSE:GM), Ford (NYSE:F), Exxon Mobil (NYSE:XOM), Bristol-Myers Squibb (NYSE:BMY) and Merck (NYSE:MRK).

Ahead of this, Citrix (NASDAQ:CTXS) is likely to be in the spotlight Monday following a report in The Wall Street Journal stating Elliott Management’s private-equity arm, Evergreen Coast Capital, and tech-focused Vista Equity Partners are set to take the software company private.

Spotify (NYSE:SPOT) will also be in focus following accusations that it was being used as a platform to promote false information about Covid-19 vaccines, specifically via comedian Joe Rogan's podcasts. 

The economic data slate is largely empty Monday, with most focus centering on the January nonfarm payrolls report due on Friday. Economists are forecasting that the economy added 155,000 jobs, slowing from 199,000 in December as the Omicron variant hit.

Oil prices traded higher, remaining near seven-year peaks, as tensions remain fraught surrounding Russia and its plans for Ukraine.

Traders are also looking ahead to Wednesday’s meeting of the Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+, to discuss future output.

U.S. Crude Oil WTI Futures traded 0.4% higher at $87.17 a barrel, while the Brent Oil Futures contract rose 0.5% to $88.92. The benchmarks recorded their highest levels since October 2014 on Friday, and their sixth straight weekly gain. 

Additionally, Gold Futures rose 0.4% to $1,791.30/oz, while EUR/USD traded 0.2% higher at 1.1160.