Market update: Risk being eased off the table ahead of US corporate earnings season

Wall Street stocks retreated from their recent highs on Monday as investors looked to the start of what is expected to be a sluggish fourth quarter reporting season in the US. The S&P 500 index gave up 0.3% while the Dow Jones slipped 0.4%. Dampening sentiment further were reports that major US mortgage lenders had agreed to pay more than $20 billion in two settlements to resolve claims arising from their mortgage businesses. While financials lagged (KBW bank index -0.3%) energy and utilities also fell (0.8% and 1.1% respectively for the S&P 500 sectors).

Following the weak lead from the US, Asian bourses were lower overnight. The Nikkei dropped 0.9% as the yen firmed against the dollar once again, weighing on exporters. Chinese shares were lower led by financials as property developers declined on worries about home prices that could lead to new property curbs. European bourses were almost flat at the time of writing this morning with little extra news to drive sentiment, which is seemingly being driven by a general air of caution as well as a reaction to overbought conditions in many growth-sensitive assets.