Fed stays put, BOE next

The Federal Reserve

It was a unanimous decision from the Federal Reserve on Wednesday to vote to maintain its benchmark rate. As expected, the voting panel of the Federal Open Markets Committee left rates on hold within their current range of 5.25% to 5.50%. But the real pointers came in the Federal Open Market Committee (FOMC) press statement, which offered a constructive view of the economy, acknowledging that economic activity has been expanding steadily while reaffirming confidence in the labor market by noting that employment gains have been strong despite some moderation.

Consumer price index

On consumer prices, policymakers maintained the wording from the previous statement, repeating that inflation has eased over the past year but persists at elevated levels, and it would not be appropriate to cut rates until greater confidence that inflation is moving to 2%. After the Fed press conference, the target rate probability of a rate cut in March has fallen to 35.5%.

The Bank of England

It's the Bank of England's turn on Thursday to decide on UK rates. The central bank is expected to acknowledge it's witnessing rapid progress in reducing inflation, but it is too early to start cutting rates immediately, probably because the UK boasts the dubious honor of the G7 economy with the hottest wage inflation, at 6-plus percent. So, rates will likely be on hold at 5.25% for a fourth straight month after an aggressive campaign of 14 rate rises aimed at quashing inflation.

Caixin/S&P Global Manufacturing PMI

China's factory activity expanded in January. The Caixin/S&P Global Manufacturing Purchasing Managers' Index (PMI) stayed at 50.8 in January, unchanged from December and surpassing analysts' forecasts of 50.6. The 50-point mark separates growth from contraction. This contrasts with an official NBS survey published on Wednesday that showed manufacturing activity remained in contraction territory last month.

Eurozone consumer price inde

The Eurozone consumer price index is expected to rise by 2.8% in January year-over-year (YoY), after 2.9% in December, and the unemployment rate is seen remaining at 6.4%. Over in the US, the number of Americans filing for benefits is expected to have decreased by 2,000 last week to 212,000, and ISM manufacturing purchasing managers' index (PMI) is forecast to fall to 47 in January from 47.4 the previous month. This would mark a 15th month of contraction in manufacturing activity.

Shell

Shell posted an adjusted net profit of $7.3 billion and announced a share buyback program of $3.5 billion. BT Group reported a pro forma adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of £6.1 billion, up 3%, and confirmed its FY 2024 financial outlook.

Adidas

Look out for Adidas at the open in Frankfurt this morning, as it published its full-year earnings on Wednesday after the European closing bell. The German sportswear maker decided not to write off most of its Yeezy inventory for €300 million but instead to sell the remaining products at cost. This translated into an operating profit of €268 million in 2023. It is down from €669 million the previous year, but easily beats the €100 million loss it previously announced. Adidas expects operating profit to nearly double to about €500 million.

Deutsche Bank

Deutsche Bank posted a 30% drop in fourth-quarter profit due to restructuring costs and other one-off expenses. Net profit attributable to shareholders was €1.26 billion in the quarter. That compares with a profit of €1.8 billion a year earlier, however, better than analysts’ expectations for a profit of around €700 million. The bank also announced plans for €1.6 billion in share buybacks and dividends, and it raised its outlook for revenue growth.

BNP Paribas

BNP Paribas is one to watch in Paris today. The largest French bank's quarterly earnings missed expectations. Fourth-quarter net income fell by 50% on a reported basis from a year earlier to €1.07 billion, below the €1.74 billion estimates by analysts. The earnings miss was driven in part by the French lender setting aside €645 million to cover losses tied to "risk on financial instruments.". Apple is expected to post its best quarterly earnings in two years.

Apple

Apple’s fiscal Q1 is usually by far its strongest quarter, as it reflects on the Christmas holiday season. Sales of the iPhone 15 are likely to give an extra boost to Apple's sales. Earnings are forecast to come in at $2.1, to be compared to the $1.88 posted for the same quarter a year ago. Revenue is expected to pass the $118 billion mark.

Meta

Also, tonight after the bell, analysts expect Meta to report earnings per share of $4.96 on $39.01 billion in revenue. Expectations are high. From its recent lows of $279 at the end of October last year, the stock rose past $400 earlier this week. Amazon earnings are expected to substantially improve in Q4. The street sees $0.79 per share, to be compared with only 12 cents per share the same quarter a year ago.