DJIA    down 72    at 12,790

S&P    down  9     at  1,336

US stock index futures are sharply lower this morning, and point to a weak open this afternoon. Last week saw equities push higher, helped by surprisingly strong US jobs numbers on Friday. But with no US economic data due out today, the focus has shifted back to Europe. Investors are trimming their exposure to equities as Greece and its private bondholders are still unable to agree terms for a debt swap. On top of this, Greek policymakers must agree to further austerity measures in order to secure the next bailout tranche from the EU/IMF/ECB troika. The Greek coalition government must signal its acceptance of harsher reforms today.

This is a big week for earnings and today we'll get releases from Anadarko, Coinstar, Hasbro, Humana and Yum Brands, amongst others. So far, fourth quarter earnings have been mixed, although still good enough to support stocks rather than trigger a selling stampede. But expectations have been low, and earnings estimates for the next quarter are being revised down again. P/E multiples are reasonable, but can only be considered cheap if the global economic outlook is genuinely improving. Unfortunately, that is far from certain, as the expectation of further central bank intervention and near-zero interest rate policy makes clear.