Stock futures are lower after the S&P 500 closed at a record high

Stocks have been plummeted this week. Hopes for a new round of stimulus spending by President Biden’s administration and the deployment of vaccines have led to a rebound in markets for much of this year. This week, the Federal Reserve also pledged to continue with a weak monetary policy until the economy is on a stronger footing.

At the same time, concern about rich stock valuations, still high levels of coronavirus infection, new virus variants, and obstacles to vaccination programs in many countries is pausing some investors.

“In the short term, it’s still unclear when the closures will end and whether consumers will rush to spend on travel and entertainment when they’re free to do so,” said Willem Sels, investment director at HSBC Private Banking and Wealth Management.

Sels remains optimistic about growth prospects. “Stock markets tend to look ahead and should be supported by the prospect of global reopening,” he said.

Biden said Thursday evening that the United States has reached agreements to buy another 200 million doses of vaccine. Investors have also been closely monitoring the progress made on the president’s economic recovery plan, which according to White House officials will be launched in the coming weeks.

As the corporate earnings season slowly ends, the results of many companies exceeded analysts ’expectations for investors.

Markets are still driven by “vaccine optimism, but for me the most important factor for me has been the strong fourth-quarter profit season. It’s an additional factor of optimism,” said Fahad Kamal. investment director of Kleinwort Hambros. “Valuations, while stretched, are supported by a stronger earnings picture.”

Qualifying company Moody’s and energy suppliers Enbridge and Dominion Energy are scheduled to show up Friday before the opening bell.

“There’s more confidence in earnings growth as we spend the profit season, more guidance from companies that look very promising,” said Shaniel Ramjee, pictet Asset Management’s multi-asset fund manager. “Even some of the most affected areas, such as travel and leisure, have had a slightly more positive tone.”

Investors are likely to reallocate funds to their fixed-income and equity securities portfolios, Ramjee said. “There is optimism at the end of the blockades and some cyclical recovery,” he added.

In bond markets, the yield on the ten-year U.S. Treasury benchmark fell to 1.155% from 1.157% on Thursday.

The preliminary reading of the Michigan Consumer Sentiment Index for February is scheduled to be published at 10 a.m. ET. This will provide some insights into consumer confidence, a key driver of the US economy.

Oil prices fell from recent highs after OPEC and the International Energy Agency said on Thursday that energy demand will continue to fall in the coming months. Both expect oil consumption to increase during the second half of the year. Brent crude, the international oil indicator, fell nearly 1% on Friday to $ 60.54 a barrel.

Abroad, the Stoxx Europe 600 pancontinental fell 0.2%.

In European equities, ING Groep rose nearly 5% after the Dutch bank’s profits fell less than expected in the fourth quarter. He also announced a dividend.

Yields on Italian bonds fell for the eighth consecutive day, with a ten-year yield at an all-time low of 0.446%. Investors are betting that former European Central Bank President Mario Draghi, who is in the process of forming the next government in Italy, will introduce reforms that the markets have been looking for for some time.

“They are clearly showing optimism about Draghi: it has been seen as a long-term solution to Italy’s deep structural challenges,” Kamal said. “It’s very rare that you can attribute that tone to a single man.”

It remains to be seen whether Draghi will be able to enact reforms, as Italy often changes governments, Kamal said.

The gap between the yields on ten-year Italian and German government bonds reached multi-year lows on Friday, reaching 0.88 percentage points. This yield gap has not been constantly trading below 0.9 percentage points since early 2010, before the euro crisis. Since then, it has only closed below the Friday level on two days in December 2015.

German yields have risen this week amid hopes of a recovery led by the Covid-19 vaccine.

In Asia, the Japanese Nikkei 225 fell 0.1% at the close of trading. Australia’s SPX / ASX 200 index fell 0.6% with a five-day close imposed on Victoria State. Some markets in the region, including China, Hong Kong and South Korea, were closed for Lunar New Year and other holidays.

Bitcoin hit a record high overnight, trading above $ 48,680, according to CoinDesk data.

Write to Anna Hirtenstein to [email protected]