Futures subdued as focus shifts to results from big US banks

The US stock index futures were muted on Friday ahead of results from big US banks that will kick off the quarterly earnings season and provide more clues on the strength of corporate America.

JPMorgan Chase & Co (JPM.N), Bank of America Corp (BAC.N), Citigroup Inc (C.N) and Wells Fargo & Co (WFC.N) are forecast to report lower fourth-quarter profits before the opening bell, as they stockpile funds to prepare for an economic slowdown.

With the Federal Reserve’s aggressive tightening campaign to combat inflation, higher borrowing costs have prompted consumers and businesses to curb their spending, impacting banks’ profits as demand for credit slows, reported Reuters.

“Bank earnings are going to be a big test,” said Michael Hewson, chief market analyst at CMC Markets UK.

“It will be interesting to see whether they (banks) have made any further provisions for non-performing loans, how they see demand for loans.”

Wall Street’s main indexes gained on Thursday after consumer prices fell for the first time in more than 2-1/2 years in December, fueling hopes of a sustained downward trend in inflation.