Dow Jones, S&P 500, Nasdaq set for lower open as trade resumes in shortened earnings-focused week

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6.30am: Markets eye latest earnings reports

Wall Street is expected to open lower on Tuesday as traders return from the extended weekend break with the corporate earnings season in full swing and as they also look ahead to tomorrow’s producer inflation release after last week’s more benign consumer price index data. 

Futures for the Dow Jones Industrial Average fell 0.2% in pre-market trading, while those for the broader S&P 500 index fell 0.3%, and contracts for the Nasdaq-100 shed 0.4%.

“Last week’s inflation data may offer stocks something of a tailwind but given the extent of the collective provisions we have seen made by banks already against bad debts, there’s clear concern that a recession is coming,” commented James Hughes at Scope Markets. “Macroeconomic data today is limited but there is a speech by the president of the New York Fed later this evening. If this offers any clues over monetary policy then expect markets to react to this on Wednesday morning.”

Banks set the earnings ball rolling last Friday, with mixed fourth-quarter reports from JPMorgan, Bank of America, Wells Fargo, and Citigroup.

Today’s earnings highlights include more banks, with Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) numbers due before the bell, while United Airlines will come after the market close. 

“The banks may well dominate, but any guidance from the travel industry will again be welcome, specifically whether the current upbeat trajectory can be maintained,” Hughes added.

December’s producer price index (PPI) due Wednesday is expected to show a decline as lower gasoline prices help ease production costs. Consensus is for a moderation in the PPI to 6.8% from 7.4% in November.