Global stocks and US stock futures rallied Monday as investors waited for a busy week of corporate earnings, economic data and central bank decisions.
Futures pegged to the S&P 500 added 0.1% after the benchmark stock meter posted its largest one-week loss since late October. US stock and bond markets are closed Monday for Martin Luther King Day.
Stocks have been wobbling in recent days after a strong start to the year fueled by hopes of a vaccine-induced economic recovery that could be supported by further fiscal stimulus under the incoming government. While many investors expect the rally to continue, they say stocks are likely to remain bumpy in the coming weeks amid signs that high rates of coronavirus cases are hurting economic activity.
“The markets are in a sense at the forefront of recovery and normalization of economic activity,” said Agnès Belaisch, chief European strategist at the Barings Investment Institute. Shares will pause intermittently given the gap between the market and the way Covid-19 restrictions are shrinking economic recovery, she said.
Investors this week will analyze the quarterly earnings of dozens of major companies, including JB Hunt Transport Services, UnitedHealth Group and Intel, for guidance on the outlook for earnings and earnings over the course of 2021. Monetary policy decisions by the European Central Bank and Bank of Japan are also available, as well as surveys that will provide an indication of the business activity at the start of the year and the inauguration of President-elect Joe Biden.