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Top 5 Things to Know in The Market on Wednesday

Published 30/01/2019, 10:23
Updated 30/01/2019, 10:39
© Reuters.

Investing.com - Here are the top five things you need to know in financial markets on Wednesday, January 30:

1. Markets Await Fed Announcement, Powell

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 (19:00 GMT), keeping it in a range between 2.25%-2.5%.

Fed Chair Jerome Powell will hold what will be a closely-watched press conference 30 minutes after the release of the Fed's statement, as investors look for greater signs of how patient the U.S. central bank will be before raising borrowing costs again.

Any hint that the Fed is closer to ending its balance-sheet runoff will also be in focus.

While policymakers have pointed to two increases in 2019, the market is betting the central bank may halt its rate hikes altogether as risks to the U.S. economy mount.

On the data front, the market’s attention will shift to the U.S. labor market with the ADP’s report on private payroll growth, which is often seen as a warmup act for the big Friday government nonfarm payrolls report.

Economists expect the ADP (NASDAQ:ADP) report, due at 8:15AM ET (13:15 GMT), to show that private payroll growth totaled 180,000 in January.

Elsewhere on the economic calendar on Wednesday, investors are likely to keep an eye out for pending home sales data at 10AM ET (15:00 GMT).

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, held steady at 95.50 At 5:20AM ET (10:20 GMT).

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In the bond market, U.S. Treasury prices inched lower, pushing yields slightly higher across the curve, with the benchmark 10-year yield rising to 2.725%.

Read more: Don’t Expect The Fed To Help USD: Kathy Lien

2. U.S., China Resume Trade Talks

The United States and China will hold two days of talks in Washington in what will be the highest-level discussions since U.S. President Donald Trump and Chinese President Xi Jinping agreed a 90-day truce in their trade war in December.

The latest round of talks will be led by Xi Jinping’s top economic emissary, Liu He, and President Donald Trump’s trade representative, Robert Lighthizer.

People familiar with the talks and trade experts watching them say that, so far, there has been little indication that Chinese officials are willing to address core U.S. demands to protect American intellectual property rights and end policies that Washington says force U.S. companies to transfer technology to Chinese firms.

That has raised concern that the world's two largest economies will fail to reach a deal before March 2, when the Trump administration is scheduled to increase tariffs on $200 billion worth of Chinese goods.

3. Wall Street Set for Higher Open

U.S. stock futures pointed to a higher open, as traders awaited a Federal Reserve policy meeting and U.S.-China talks, while awaiting the latest batch of corporate earnings.

The blue-chip Dow futures were up 62 points, or around 0.25%, the S&P 500 futures tacked on 5 points, or about 0.2%, while the tech-heavy Nasdaq 100 futures indicated a gain of 47 points, or roughly 0.7%.

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Elsewhere, European stocks were mostly higher, as investors monitored the latest developments surrounding Brexit.

British lawmakers rejected most amendments that sought to avoid Britain exiting the European Union without a deal, reviving worries of a no-deal Brexit.

Among national indices, Britain's FTSE 100 jumped 0.9% thanks to a weaker pound boosting London-listed multinational exporters.

Earlier, markets in Asia closed mixed.

4. Apple Results Calm Nerves

Apple (NASDAQ:AAPL) relieved investors by reporting sharp growth in its services business, helping boost the company's shares even though iPhone sales dipped in the holiday shopping quarter for the first time.

Investors were relieved that there was no fresh bad news after the tech giant shocked financial markets at the start of this month when its rare revenue warning sparked fears the U.S.-China trade tensions were taking a toll on the tech sector.

Chief executive Tim Cook also said trade tension between the U.S. and China were easing.

The company's shares rose 5.5% to $163.18 in premarket trading. They had fallen more than 30% since November on concerns about weak iPhone sales.

5. Boeing, Microsoft Highlight Another Busy Day of Earnings

Market focus will be on a slew of earnings expected on Wednesday, as a busy week of earnings continues.

Boeing (NYSE:BA), McDonald's (NYSE:MCD), AT&T (NYSE:T), Alibaba (NYSE:BABA), General Dynamics (NYSE:GD), and Anthem (NYSE:ANTM) are among the major companies due to publish their latest quarterly figures before the opening bell.

Microsoft (NASDAQ:MSFT), Facebook (NASDAQ:FB), Tesla (NASDAQ:TSLA), Visa (NYSE:V), PayPal (NASDAQ:PYPL), Qualcomm (NASDAQ:QCOM), Wynn Resorts (NASDAQ:WYNN), and US Steel are among some of the companies set to report earnings results after Wednesday's market close.

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-- Reuters contributed to this report

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