📆 Thursday, January 30
► European markets climbed, with the Stoxx 600 (+0.5%) hitting a record high ahead of the European Central Bank’s (ECB) expected rate cut and despite mixed earnings of European companies. The ECB is widely anticipated to lower rates by 25 basis points, bringing the deposit rate down to 2.75%, marking its fifth cut in the easing cycle. Tech and industrial stocks led gains, with ASML up another 2.3% after strong earnings (previous day). Swedish-Swiss multinational electrical engineering giant ABB (ABBN) surged 3.2% following a solid Q4 report. In contrast, Deutsche Bank fell 6% after posting a larger-than-expected drop in Q4 earnings, and STMicroelectronics slid 6% on weaker guidance. Shell missed both revenue and EPS estimates, with Q4 revenue at $66.28B (-15.8% Y/Y), but raised its dividend by 4% and announced a $3.5B share buyback resulting in gains (+ 1.4%). Investors are also weighing Trump’s continued tariff threats, which could impact European exporters and auto manufacturers.
► US stock futures are higher, with Nasdaq 100 futures (+0.5%) and S&P 500 futures (+0.4%) aheah of Apple’s upcoming earnings and following Wednesday’s mixed tech results. Microsoft (- 3.7%) fell post market after cloud revenue growth missed expectations, while Tesla (+ 2.5%) rebounded despite yet another weak quarter but after forecasting stronger vehicle sales for 2025. Meta (+ 2.8%) delivered another strong quarter, but its Q1 guidance came in below high estimates. The Federal Reserve chose to hold rates steady, as expected, with Chair Powell signaling a “wait-and-see” approach on rate cuts, dampening expectations for a March reduction Powell's choice of words and Fed positioning was exactly what we had expected – congratulations. Treasury yields fell following Powell's less than feared hawkish stance. The 10-year yield trades at 4.5% (down 5 bps), as traders assessed Powell’s hawkish stance.
► Asian markets traded mixed, as Japan’s Nikkei 225 remained steady, with the JPY strengthening after BOJ Deputy Governor Himino suggested rate hikes are possible if economic conditions improve. Australia’s ASX 200 (+0.55%) hit a record high, as Q4 inflation slowed to 2.4%, raising expectations for an RBA rate cut. China, Hong Kong, Taiwan, and South Korea remained closed for Lunar New Year, keeping regional trading volumes subdued.
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