Wall Street set for softer start as earnings season kicks off

US indices are set to open on the back foot as the fourth-quarter earnings seasons gets underway. Spread betting quotes indicate the Dow Jones Industrial Average will start some 129 points lower at 30,863 while the S&P 500 is tipped to shed 14 points at 3,782. The tech-laced Nasdaq Composite is set to start 234 points down at 12,879. JP Morgan was one of the first companies out of the traps with its fourth-quarter numbers. Net income rose to US$12.14bn, equivalent to US$3.79 a share, from US$8.52bn in the same period of 2019. Analysts had expected earnings per share of US$2.62; adjusted for non-recurring items they came in at US$3.07. “Joe Biden has now released details of his proposed $1.9 trillion stimulus plan and while positive for helping to revive the US economy, financial markets have already priced in the good news and are now starting to worry about the negative side, namely how it will be funded,” said Russ Mould, the investment director at AJ Bell. “The large scale of the proposed support measures adds fuel to the fire that taxes and interest rates will have to go up. Both have negative connotations for equities, therefore casting a cloud on the ability for stock markets to keep rallying at the same pace they have enjoyed for much of 2021. “However, the Federal Reserve has been at pains to stress that it won’t raise rates any time soon, so it is feasible to suggest that we could continue to see a burst of energy among stocks for a while yet,” Mould said. Four things to watch for on Friday: Aside from JP Morgan, other banks scheduled to report earnings today are Citigroup Inc (NYSE:C), which will report figures for its fourth quarter, and Wells Fargo & Co (NYSE:WFC) which will deliver third quarter numbers Another financial firm on the earnings calendar is PNC Financial Service Group Inc (NYSE:PNC), which will report numbers for the fourth quarter In the macroeconomic diary, investors can expect an appearance by the US producer price index, which is expected to show a 0.4% increase for December following a 0.1% increase the month before Other data in the scheduled is US retail sales excluding vehicles for December, which are expected to be down 0.2% after a 0.9% decline in October, and US industrial production in December which is tipped to show a 0.5% hike after rising 0.4% in October