US stocks were struggling for gains on Monday as investors awaited results from megacap companies and key data that could shed light on the US economy and shape the Federal Reserve's monetary policy.
Wall Street is looking ahead toward mega-cap tech earnings results this week in what will mark the halfway point of earnings season. Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN) and Meta (META) are among the high-interest names scheduled to announce their results for the first quarter.
The FTSE 100 and European stocks finished lower at the start of a week packed with economic data and central bank meetings, as investors digested news that Credit Suisse (CS) was hit by £55bn ($68bn) in withdrawals in the first quarter.
The UK's blue chip fell as weak demand outlook for crude dragged energy stocks, while a fall in metal prices pressured industrial miners on the commodity-heavy index.
Shares of lender HSBC (HSBA.L) edged 0.1% higher despite shareholder advisory group ISS saying HSBC investors should vote against a resolution by its biggest shareholder Ping An.
Michael Hewson, chief market analyst at CMC Markets UK, said: “The FTSE100 has chopped in and out of negative territory for most of the day with basic resources, and telecoms providing the main drag, while energy has pulled the index off its intraday lows.
"Weak iron ore prices, which have slipped to their lowest levels this year, are acting as a dead weight on the likes of Glencore and Anglo-American, BP and Shell were initially acting as a drag, however a rebound in oil prices has managed to pull the FTSE100 off its lows, and into positive territory.”
Meanwhile, UK-listed companies issued 75 profit warnings in the first quarter of this year, new data from EY-Parthenon showed. This is the highest first quarter total since the early stages of the pandemic in 2020, and above the 10-year quarterly average.
US and Asia
US data on Thursday is expected to show first-quarter economic growth weakened after interest rate hikes to cool business activity and inflation. That might encourage the Federal Reserve to postpone or scale down more possible rate hikes at its May meeting.
In Asia, markets were broadly lower on Monday, ahead of a busy week of key economic releases in the region.
Investors will be closely watching the Bank of Japan monetary policy meeting later this week, the first to be led by new chief Kazuo Ueda.
£55bn left Credit Suisse in bank run
Credit Suisse said some 61bn Swiss francs (£55bn/$68.6bn) left the bank in the first financial quarter this year.
Credit Suisse's flagship wealth management division saw the amount of assets it managed drop to 502.5bn francs at the end of March, almost 29% lower than the same period last year, Credit Suisse said in a statement.
"These outflows have moderated but have not yet reversed as of April, 2023," it added.
Credit Suisse clients started pulling money out of the bank after it was caught up in the market turmoil that followed the collapses of Silicon Valley Bank and Signature Bank in the US in March.
It is likely to be the last time Credit Suisse will report results, as the the 167-year-old institution’s state-engineered marriage to rival UBS (UBS) is expected to be completed soon.
Investors had been eagerly awaiting the results as they seek clues to the magnitude of the challenges facing UBS.
Anke Reingen, analyst at RBC, said the first-quarter results highlighted “the challenged position Credit Suisse’s franchise is in and the work ahead for UBS taking Credit Suisse over”.
The pound (GBPUSD=X) lost some ground against the US dollar, with sterling trading at $1.2411.
However, the long game remains bullish for the pound, with year-to-date gains on the GBP/USD pair coming to over 2.8%.
Sterling (GBPEUR=X) was flat against the euro, hovering around €1.13.
Meanwhile, Brent crude (BZ=F) lost ground and was trading at around $82 per barrel as concerns about rising interest rates, the global economy and the outlook for fuel demand outweighed support from the prospect of tighter supplies on OPEC+ supply cuts.
“It’s unlikely that crude can bounce meaningfully absent crack expansion,” RBC Capital Markets LLC analysts said in a note.