Investing.com - Here are the top five things you need to know in financial markets on Thursday, October 26:
1. All Eyes on Draghi as ECB Gets Set to Outline Taper Program
The European Central Bank is widely expected to stand pat on interest rates when it announces its monetary policy decision at 7:45AM ET (1145GMT).
Most of the focus will be on President Mario Draghi's press conference 45 minutes after the announcement, as investors look for more clues on when and how it could start unwinding its monthly quantitative easing program.
Market experts believe the ECB will announce that it will start trimming its monthly asset purchases to €40 billion from the current €60 billion beginning in January.
They were mostly split on whether the program would last six or nine more months after that.
The euro crept higher against the dollar to reach a six-day high of 1.1837, accompanying a rise by the German 10-year bund yield to a three-week top of 0.489%.
2. Markets Brace for 'Big Tech' Earnings
Thursday's blast of high-profile earnings, including big tech bellwethers, could help set the stage for new stock market highs in the days ahead.
Companies slated to report ahead of the opening bell include Twitter (NYSE:TWTR), Ford (NYSE:F), Comcast (NASDAQ:CMCSA), UPS (NYSE:UPS), American Airlines (NASDAQ:AAL), Celgene (NASDAQ:CELG), Bristol-Myers Squibb (NYSE:BMY), Raytheon (NYSE:RTN), Dow Chemical (NYSE:DOW) and Under Armour (NYSE:UA) to name a few.
But some of the tech and internet names that have led the market's gains in recent months report after the closing bell and could offer further impetus to markets. That includes Amazon.com (NASDAQ:AMZN), up 30% year to date, and Alphabet (NASDAQ:GOOGL), which has risen 26%.
Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC), Baidu (NASDAQ:BIDU), Western Digital (NASDAQ:WDC), Align Technology (NASDAQ:ALGN), Starbucks (NASDAQ:SBUX), EA Sports (NASDAQ:EA), Gilead Sciences (NASDAQ:GILD) and First Solar (NASDAQ:FSLR) also report after the close.
3. Global Stock Market Bull Run Slows
The global stock rally finally showed signs of slowing, bringing at least a momentary pause to this month’s strong performance, as a downbeat mood spread across world equities.
Asian-Pacific markets ended mostly lower, following overnight declines in the U.S., though Japan and China logged gains.
In Europe, shares steadied near 4-week lows as investors digested a raft of mixed earning updates and awaited the ECB's decision on monetary policy.
On Wall Street, U.S. stocks pointing to a mildly lower open as investors looked to key earnings reports to set the tone for the markets. On Wednesday, U.S. stocks fell, with the Dow and S&P 500 indexes suffering their worst day in seven weeks.
4. Race for Fed Chair Enters Final Stretch
Market watchers continued to grapple with uncertainty over who will become the next Federal Reserve chief and how that will influence the outlook for interest rates.
President Donald Trump is unlikely to pick economic adviser Gary Cohn as his nominee for Fed Chair because Cohn is playing a crucial role in the White House tax reform effort, a senior administration official said Wednesday.
That leaves Stanford University economist John Taylor, current Fed Governor Jerome Powell and current Fed Chair Janet Yellen as the front runners.
Trump is expected to announce his Fed chair candidate before leaving on a trip to Asia on Nov. 3.
The dollar index, which measures the greenback's value against a basket of six major currencies, was a shade higher at 93.63, within sight of a two-week high of 93.90 set on Monday.
The 10-year Treasury yield last stood at 2.426%. It hit a seven-month high of 2.475% on Wednesday, buoyed by strong economic data, recent optimism over progress on tax reform and anticipation of a nominee to head the Federal Reserve.
On the data front, Thursday's calendar includes weekly jobless claims, advanced trade figures and preliminary wholesale inventories all at 8:30AM ET (1230GMT). At 10AM ET, the U.S. will release a report on pending home sales.
5. Oil Prices Slip Further Following Surprise U.S. Crude Build
Oil prices extended losses from the prior session, pressured by an unexpected increase in U.S. crude inventories and as oil output and exports from the United States rose last week.
U.S. crude oil inventories rose by 856,000 barrels, marking the first increase in five weeks. That compared with analysts' expectations for a decline of 2.6 million barrels.
The report also showed that domestic production rebounded by 1.1 million barrels per day (bpd) to 9.5 million and net imports rose by just over 500,000 bpd, after the falloff due to Hurricane Nate the week before.
U.S. West Texas Intermediate (WTI) crude futures lost around 0.4% to $51.98 a barrel, while Brent crude futures, the benchmark for oil prices outside the U.S., shed 0.3% to $58.27 a barrel.