Five Things You Need to Know to Start Your Day
Five Things You Need to Know to Start Your Day
(Bloomberg) --
Good morning. An emergency meeting on coronavirus is scheduled, the Federal Reserve made no changes, and it’s an earnings bonanza day. Here’s what’s moving markets.
Emergency Meeting
The World Health Organization called an Emergency Committee meeting for Thursday at which it will consider its next steps on the coronavirus outbreak, from which the death toll has continued to rise. Asian stocks resumed declines as economists started to trim their growth expectations for China as they attempt to quantify the impact the virus is having. Airlines were canceling flights to China and various countries have been repatriating citizens before placing them in quarantine in order to contain the spread. Given all this, the WHO meeting outcome will be very closely watched.
No Change
The Federal Reserve kept interest rates unchanged and said its policy is appropriate for now, signaling it will remain on hold for the foreseeable future as the U.S. election approaches. That was the widely predicted outcome to the latest meeting so it will allow markets to keep their focus on earnings season and to continue the bigger debate about what tools the Fed will have at its disposal when the next downturn arrives. Chairman Jerome Powell also indicated the bank will pull out the stops to prevent a downward spiral in inflation which has been seen elsewhere in the world, potentially foreshadowing a shift to easier monetary policy over time.
Carney’s Bow
From one central bank to another across the pond. The Bank of England’s latest decision has traders on edge as the least predictable under the reign of outgoing Governor Mark Carney, with a 50% chance of a move seen by traders, though a majority of economists anticipate a 6-3 vote to hold rates. Indeed, some think the BOE will remain on hold for the rest of the year. Currency traders are still confident on the outlook for the pound, however, despite the volatility leading up to the decision and there seems to be some agreement that U.K. stocks are too cheap to look past now, even if Brexit uncertainty isn’t going to disappear any time soon.
Earnings Bonanza
A bevy of big names in the corporate world reported overnight and will be pored over today. Social media behemoth Facebook Inc. posted its slowest quarterly growth on record, sending its shares tumbling, while Samsung Electronics Co. also dipped in Seoul as profit dropped due to weakness in memory chip prices. On the brighter side, software giant Microsoft Corp. moved in the opposite direction after profit and sales topped expectations thanks to strong demand for its cloud products. And electric car maker Tesla Inc. defied the doubters and burned short sellers with a blowout beat that sent its shares surging.
Coming Up…
Asian stocks slumped once again and sovereign bonds rallied amid the continued fears about coronavirus disrupting the Chinese economy. European stock futures are pointing firmly lower, too. German inflation and European economic confidence data will arrive and U.S. GDP figures will come later in the European session. It’s a big earnings day, topped by Swiss drugmaker Roche Holding AG, which just reported earnings that beat estimates, oil major Royal Dutch Shell Plc, and spirits giant Diageo Plc.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- The Brexit music single chart war.
- The $500 million mansion looking for a buyer.
- Warren Buffett walks away from newspapers.
- Gen Z is racking up credit card debt.
- Airbnb is facing headaches in France.
- Tears and jeers at the U.K.’s final bow in Brussels.
- Space flight matchmaking TV show is grounded.
To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net
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