Global stocks rise, U.S. rates steady as trading starts

Global stocks rose and the U.S. futures were steady Monday as investors focused on upcoming corporate earnings and rising interest rates with U.S. exchanges shut in observance of Martin Luther King Jr. holiday.

In Asia, the Nikkei 225 NIK rose by 0.7% in Tokyo while the Hang Seng HSI fell with little movement caused by the People's Bank of China's decision to cut interest rates on its one-year facility by 10 basis points. In the afternoon, the Stoxx Europe 600 SXXP rose by 0.6%.

The S&P TSX 60 SPTSE gained 0.3% in Toronto in the morning. After two weeks in which the S&P 500 SPX had fallen by 2%, the U.S. stock futures ES 00 were little changed in electronic action. The tech heavy Nasdaq Composite COMP has dropped 5% this year. Stuart Kirk, global head of research and responsible investments at HSBC Asset Management said that the start of the year has historically been a poor indicator of what is going to come for investment markets. The average MSCI World return to the end of the year after a negative first seven trading days has been nearly 11%, edging out the index performance after a positive first seven trading days, he notes. Bank of America BAC, and Morgan Stanley MS, are expected to release results, as well as more airlines and streaming giant Netflix NFLX, which is expected to report results, with corporate earnings coming from the banking sector. The U.K. stocks have outperformed their U.S. counterparts as investors rotate into value sectors with bond yields on the rise. We believe that this move will continue over the next few months. The U.K. still looks excessively cheap, with a price earnings ratio of 30% lower than the rest of the world, and the U.S. is excessively expensive with a valuation premium as high as 50%, said Rupert Thompson, chief investment officer at Kingswood.