Europe indices set for higher open

Hong Kong indices

China and Hong Kong indices jumped overnight after China's Central Huijin Investment, a sovereign fund that owns China's state-run banks and other big government-controlled enterprises, expanded its purchases of stock index funds to help the market. The China Securities Regulatory Commission also introduced new measures to curb short selling.

The Reserve Bank of Australia

As expected, Australia's central bank held interest rates steady at a 12-year high of 4.35%. The Reserve Bank of Australia (RBA) cautioned that a further increase could not be ruled out given that inflation was still too high and that it needed to see more evidence that price pressures were cooling. The latest inflation data eased by more than expected in the fourth quarter, but the RBA is still not confident that inflation is on a sustainable path towards its 2%–3% target. Last week, RBA-trimmed mean consumer price index (CPI) came in at 4.2% in Q4, down from 5.2% the previous quarter—a substantial deceleration, but still far from the RBA target. The RBA's hawkish tone boosted the Australian dollar against all major currencies.

UK inlation

UK shoppers remained cautious about spending in January, as high inflation and borrowing costs are still weighing on households. The British Retail Consortium said consumer spending increased by 1.4% in January year-over-year (YoY) on a like-for-like basis, below a 1.7% rise in December. This marks the slowest growth in 15 months. Separate figures from Barclays paint a different picture. Jack Meaning, chief UK economist at Barclays, is noticing an improvement in consumer confidence and a positive message for the UK outlook in 2024. Barclays customers spent 3.1% more on debit and credit cards in January than a year earlier. It is still below the most recent rate of inflation, but growth accelerated after a 2.3% rise in December, and it marks the strongest rise in online shopping in two years.

BP

BP reported Q4 earnings of $2.99 billion, higher than the $2.76 billion expected. The group plans a $3.5 billion share buyback program in H1 2024 and at least $14 billion through 2025.

UBS

Swiss bank UBS beats earnings forecasts. The group posted a net loss attributable to shareholders of $279 million for the quarter. Analysts had expected a net loss attributable to shareholders of $372 million. After that third-quarter report, the market chose to focus on the bank's strong underlying operating profit before tax, which was well ahead of expectations. For the fourth quarter, that came in at $592 million. It also announced that it would recommence share buybacks worth up to $1 billion in the second half of the year.

Novartis

Novartis confirmed yesterday evening that it will acquire cancer treatment developer MorphoSys for €2.7 billion. Advanced talks were first reported on Monday afternoon, which sent MorphoSys shares up 56% in Frankfurt. With this deal, Novartis adds a promising rare bone-marrow cancer treatment candidate to its portfolio. MorphoSys will continue to operate as a separate, independent company until the completion of the deal, expected in the first half of 2024.

Snap

Snap is gearing up to report its fourth-quarter results after the US closing bell tonight, so what can we expect? Analysts on Wall Street project that Snap will announce a quarterly loss of 17 cents on revenue of $1.38 billion. This revenue estimate is higher than Snap's own forecast of sales of between $1.32 billion and $1.375 billion. Besides the top and bottom lines, the Snapchat+ subscription service is what investors will be looking at. It reached more than five million paying subscribers in the third quarter. Earlier in November, Snap announced a partnership with Amazon to enable US Snapchat users to buy products from online retailers without leaving the app. Also, it plans to cut its global headcount by about 10%. This was announced yesterday, just before the start of the US session. No doubt it will be discussed in Thursday's conference call.

Ford Motor

Ford Motor Company will release its fourth quarter results after the closing bell. The estimate for quarter earnings and sales is pegged at 12 cents per share and $43.04 billion, respectively. This compares with earnings per share (EPS) of 51 cents and revenue of 41.8 billion. Investors will want to know how much car production was lost due to the United Auto Workers strike against Ford, which began in mid-September and lasted six weeks. Electric vehicle production is also a focal point. In January, Ford cut production of its F-150 lighting electric pickup truck as it predicted slower electric vehicle sales growth in 2024. Earlier in November, Ford unveiled plans to cut back on investment at its Michigan EV battery plant.