The stock market is on a downward trend due to investor concerns in anticipation of quarterly reports in the United States (US) and Asia.
The declining US stock futures reflected the caution of investors with the impact of the forthcoming first quarter (Q1) earnings report.
The Dow Jones Industrial average index futures lost 150 points or 0.4%, the S&P 500 was down 0.5%and the Nasdaq Composite was down 0.8%.
Among the quarterly reports in focus are the quarterly reports of Bank of America and several technology companies.
Investors are seen to be paying close attention to comments on how the company is handling soaring costs, especially when the March consumer price index saw an 8.5% increase from a year ago.
According to a note from Gerard MacDonell of 22V Research, there is no possibility for inflation to return to moderate rapidly without a significant decline in demand growth.
Meanwhile, FactSet analysts said the earnings season started well with 77% of S&P 500 companies reporting earnings per share exceeding expectations.
He added that they expect Q1 revenue to jump 5% for the quarter when all S&P 500 companies complete their reports, of which only 77% of companies have released their reports so far.
Meanwhile, Asian stocks eased as investors awaited Chinese economic data including the gross domestic product (GDP) report for the great wall nation's Q1.
Japan’s Nikkei 225 fell 1.24%and South Korea’s Kospi was down 0.5%, while the MSCI Asia Pacific broad index outside Japan traded 0.24%weaker.
In separate news, investors were seen looking for defensively shaped stocks, stocks that tend to offer strong dividends, following geopolitical concerns and the Federal Reserve’s (Fed) efforts in curbing inflation that could hurt economic growth.
As of April, the healthcare, utilities, consumer needs and real estate sectors had recorded gains despite a falling broad market.
It has indirectly become an attraction to investors who are concerned about the Fed's aggressive actions in implementing policy tightening to combat the spike in consumer prices.
According to DataTrek Research, these sectors have outperformed the S&P 500 by 15-20% during a period of economic uncertainty over the past 20 years.
