📆 Thursday, February 1
► European markets swung amid recalibrated expectations for Federal Reserve rate cuts, analyzing a wave of corporate earnings. The Stoxx 600 found its footing despite early uncertainties. Anticipation builds for the Bank of England's rate decision, expected to maintain high rates while possibly signaling UK economic optimism and a softened inflation forecast, hinting at future policy easing. In corporate news, Adidas faced a 7% dip after disappointing profit forecasts, and BNP Paribas saw an 8% fall, adjusting its 2025 targets. Shell announced earnings and revealed a $3.5 billion share buyback following a full-year profit that, despite a 29% year-on-year decrease, surpassed analyst expectations. This outcome reflects the ongoing adjustments within major oil companies in response to fluctuating global energy demands and prices.
► US futures signaled a cautious rebound resulting in our Nasdaq 100 LONG from yesterday closing in TP (or being well in profit now) after the S&P 500's significant 1.6% retreat, influenced by the Fed's resistance to imminent rate cuts. Fed Chair Jerome Powell explicitly deemed a March rate reduction improbable, advocating patience until inflation sustainably approaches the 2% target. US treasury yields remained stable after a significant drop, with the 10-year note yield decreasing by 11 (!) basis points. The market is adapting to the Fed's cautious approach toward rate cuts, echoing sentiments that rates may descend gradually. The market's focus now shifts to more major US tech earnings with Apple, Amazon, and Meta set to report. These results are pivotal, offering insights into whether the valuations driving the recent rally can withstand scrutiny against high investor expectations.
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