Investing.com - Here are the top five things you need to know in financial markets on Wednesday, January 31:
1. Fed rate decision on tap in last with Yellen as chair
The Federal Reserve is not expected to take action on interest rates at the conclusion of its two-day policy meeting at 2:00PM ET (1900GMT) on Wednesday, keeping it in a range between 1.25%-1.50%.
The central bank will release its post-meeting statement as investors look for any change in language which could point more clearly to a rate hike in the months ahead.
This week's meeting will be the last under the leadership of Janet Yellen, before she is replaced by Fed Governor Jerome Powell.
The majority of economists believe that the Fed will hike rates in March, followed by another hike in June, with a third move higher arriving in December.
The dollar came under renewed selling pressure on Wednesday, sliding lower against a basket of the other major currencies ahead of the decision as well as another slew of economic data.
Close attention will be paid to ADP’s nonfarm employment report at 8:30AM ET (13:30GMT) as a precursor to the government nonfarm payrolls out on Friday.
Market participants will also eye the Chicago purchasing managers’ index (PMI) for January out at 9:45AM ET (14:45GMT) as well as the release, 15 minutes later, of pending home sales for last month of 2017.
2. Trump brings infrastructure spending back on radar
President Donald Trump called on the U.S. Congress on Tuesday to pass legislation to stimulate at least $1.5 trillion in new infrastructure spending, though the he gave few details on the long-awaited spending plan.
In his State of the Union speech to Congress, Trump said it was time to address America's "crumbling infrastructure."
The President did seem wary of increasing the federal deficit which the Committee for a Responsible Federal Budget calculates will pass $1 trillion dollars next year.
“Every federal dollar should be leveraged by partnering with state and local governments and, where appropriate, tapping into private-sector investment,” he said.
3. Earnings season continues in full swing
Earnings season will continue in full swing on Wednesday with firms continuing to give a strong showing. As of Tuesday night, 169 of the S&P 500 firms had reported earnings with 82% beating profit estimates and 85% topping sales forecasts.
Electronic Arts (NASDAQ:EA) registered gains of nearly 7% in pre-market trade Wednesday after the video game company produced a better-than-expected forward guidance after the prior session’s close.
Advanced Micro Devices (NASDAQ:AMD) saw shares rise more than 2% in pre-market trade after beating on both the top and bottom line, benefiting from strong chip demand.
Among firms to watch on Wednesday, Boeing (NYSE:BA), DR Horton (NYSE:DHI) or Eli Lilly (NYSE:LLY) will report before the opening bell, while Microsoft (NASDAQ:MSFT), Facebook (NASDAQ:FB), PayPal (NASDAQ:PYPL) or eBay (NASDAQ:EBAY) will release their own earnings after the market close.
4. Oil heads for monthly gains of 6% ahead of inventories
Crude prices fell on Wednesday, extending losses into a third session, although the U.S. benchmark was still on track for monthly gains of around 6%.
Continuing concern over supply as U.S. shale producers pump more possibly offsetting OPEC-led production cuts and speculation that weekly supply data due later in the day will show an increase in U.S. oil and fuel inventories put downward pressure on oil prices on Wednesday.
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by nearly 3.2 million barrels last week, compared with analysts' expectations for a more modest increase of around 0.1 million barrels.
The U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended Jan. 26 at 10:30AM ET (15:30GMT), amid expectations for a build of 126,000 barrels.
U.S. crude oil futures fell 0.60% to $64.11 at 5:58AM ET (11:58GMT), while Brent oil traded down 0.63% to $68.09.
5. Bitcoin on track for largest monthly decline in 4 years amid crypto bloodbath
All the major cryptocurrencies were trading lower across the board on Wednesday in the last trading day of the month while the largest by market cap, Bitcoin, was on track for the biggest monthly percentage decline since December 2013 amid growing fears over regulatory scrutiny.
Bitcoin slumped 6.3% at $10,199 by 5:58AM ET (11:58GMT) on the Bitfinex exchange. Prices are down around 25% so far this month, the worst monthly performance since December 2013.
Ethereum, the world’s second largest cryptocurrency by market cap, tumbled 5.3% to $1,101.00 on the Bitfinex exchange, while Ripple's XRP token was trading down 7.8% at $1.1231 on the Poloniex exchange.
Bitcoin prices came under renewed selling pressure on Thursday following reports that the U.S. Commodity Futures Trading Commission sent subpoenas on Dec. 6 to cryptocurrency exchange Bitfinex and Tether.
Tether is a company that issues a widely traded coin, which its claims is backed by U.S. dollars held in reserve, but has never provided any evidence to confirm this.