Five Things You Need to Know to Start Your Day:
Fed Reaction
In the morning update for February 1, 2024, the focus is on the aftermath of the Federal Reserve's recent policy announcement. Fed Chair Jerome Powell acknowledged recent inflation but emphasized the need for more data before making decisions. The market responded with a 1.6% drop in the S&P 500, the most significant since September, although a partial rebound is expected.
Real Estate Concerns
Concerns over US commercial real estate further complicated the market's reaction, with New York Community Bancorp's decisions causing a record 38% stock drop. Aozora Bank and Deutsche Bank also voiced concerns about US commercial property, impacting global bond markets.
Tech Earnings Deluge
In the tech sector, three major players—Apple, Amazon, and Meta—are set to report earnings. Google's parent company, Alphabet, and Microsoft experienced negative responses to their recent results.
Contrasting Fortunes
In European earnings news, Deutsche Bank's shares rose despite real estate concerns, fueled by plans for a share buyback and higher revenue goals. Shell defied oil price slumps with a fourth-quarter profit surpassing estimates, while Adidas and BNP Paribas faced declines due to lower profit guidance and lowered targets, respectively.
BOE Decision
The Bank of England's policy decision is anticipated, focusing on the timing of its first rate cut.
In the US, economic data on initial jobless claims and manufacturing is expected, leading up to tomorrow's highly awaited payroll numbers.
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