© Reuters
Investing.com – U.S. stocks were subdued on Tuesday as investors awaited a raft of quarterly corporate earnings and key economic data. Elsewhere, the Securities and Exchange Commission reports that a malicious actor used a SIM swapping attack to gain control of its Japan is maintaining its dovish policy stance and lowering its inflation forecast for the coming fiscal year.
1. Futures subdued
U.S. stock futures mostly hovered around the flat line on Tuesday after stocks rose sharply in the previous session on hopes of strong upcoming corporate earnings and continued enthusiasm for artificial intelligence.
At 04:52 ET (09:52 GMT), contracts for , and were largely unchanged.
The recent rally in major averages continued on Monday, with the benchmark in particular hitting its third consecutive positive close for the first time this year. Tech-heavy stocks also rose 0.3%, despite small declines in most of the so-called “Magnificent Seven” megacap stocks. Meanwhile, 30 shares climbed above 38,000 for the first time.
Stocks got off to a weak start at the start of the year but have since rebounded, partly due to investor optimism about a “soft landing” for the U.S. economy. In this scenario, increased interest rates would help cool inflation without triggering a sharp slowdown in economic activity.
“Actually the idea of a soft landing [materializing] Despite all odds, risk assets are supportive across all areas of the market,” analysts at ING said in a note.
2. The winning parade increases
The positive sentiment will be tested this week with a series of new corporate earnings and key economic data.
Several big-name brands are expected to report their latest quarterly results on Tuesday, including pharmaceutical giant Johnson & Johnson (NYSE:), consumer goods giant Procter & Gamble (NYSE:) and diversified manufacturing group 3M (NYSE:) before the start of US trading. After the bell, traders will be on the lookout for numbers from streaming company Netflix (NASDAQ:) and chipmaker Texas Instruments (NASDAQ:).
United Airlines (NASDAQ:) reported fourth-quarter adjusted earnings per share that beat estimates after the “busiest travel period in history” last month, boosting shares in U.S. premarket trading. Fellow airlines American Airlines (NASDAQ:) and Delta Air Lines (NYSE:) rose on the heels of the numbers.
Later in the week, traders will look for the first reading of U.S. gross domestic product in the final three months of 2023, as well as the Federal Reserve's preferred inflation indicator for December.
3. According to the SEC, a false X post is related to a phone number exchange
The top U.S. securities regulator said a false post that appeared to announce the approval of a spot exchange-traded fund came after a malicious actor took control of the phone number associated with his social media account -Platform X was linked.
In a statement on Monday, the Securities and Exchange Commission said it had fallen victim to a “SIM swap” attack, a technique that transfers a person's phone number to another device without authorization. The unauthorized person then reset the password for the X account, the SEC added.
“Law enforcement is currently investigating, among other things, how the unauthorized party caused the wireless carrier to change the SIM card for the account and how the party knew which phone number was associated with the account,” the agency noted.
The Jan. 9 fake post said the SEC had given the much-anticipated green light to ETFs tracking Bitcoin's spot price, prompting frantic trading activity around the world's most famous cryptocurrency. The validity of the statement was disputed by the SEC, which officially approved the ETFs a day later.
4. The BOJ keeps its dovish stance unchanged
The Bank of Japan on Tuesday kept interest rates at historic lows and its yield curve control policies unchanged, but slightly lowered its inflation outlook for fiscal 2024.
The BOJ kept its short-term interest rates at negative 0.1% and said it would maintain its yield curve control mechanism to keep 10-year yields fluctuating in a range of minus 1% to 1%, with a target of 0%. The central bank also offered no changes to its asset purchase programs.
In an announcement on Tuesday, the BOJ added that it expects consumer price index (CPI) inflation to continue above its 2% annual target through fiscal 2024 and that price growth will only moderate in fiscal 2025.
But the majority of members of the BOJ's monetary policy committee lowered their CPI inflation forecasts for fiscal 2024. The median forecast for core CPI inflation, which excludes fresh food prices, was now at 2.4% in the period, compared with the October forecast of 2.8%.
5. Oil withdrawals
Oil prices fell on Tuesday, erasing earlier gains attributed to a new wave of attacks by American and British forces on Houthi sites in Yemen.
The Iran-backed Houthis, who control the most populous parts of Yemen, have disrupted global shipping through the Red Sea and raised fears that crude oil supplies to the key Asian market could be hit. The group said its attacks were in solidarity with Palestinians as Israel attacks Gaza.
At 4:54 a.m. ET, futures were trading 0.6% lower at $74.31 a barrel, while the contract slipped 0.6% to $79.59 a barrel.
The latest U.S. crude stockpile data from industry trade group the American Petroleum Institute will be released later in the session and is expected to fall by about 3 million barrels in the week ending Jan. 19.
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