Good morning! Here’s what you need to know in markets on Thursday.
1.The cost to the British economy of lower EU migration after Brexit will be greater than any gains made by a US-UK trade deal, according to a leaked Whitehall report.BuzzFeed News published the conclusions from a top-secret leaked report from Whitehall on the impact of potential post-Brexit migration policies on the economy.
2.US Treasury yields hit session highs after the Federal Reserve held its benchmark interest rate in a range between 1.25% and 1.50% and suggested inflation would hit its 2% target over the medium term. “The Committee expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labour market conditions will remain strong,” the statement said.
3. Asian shares eked out modest gains on Thursday, clawing back sharp losses from earlier this week, however, rising US bond yields and interest rates could dampen investors’ optimism toward the global economic outlook. Japan’s Nikkei stock index closed up 1.60%, while the Hong Kong Hang Seng index is down 0.43% at the time of writing (6.30 a.m. GMT/1.30 a.m. ET), and China’s Shanghai Composite is down 1.29%.
4.Facebook’s fourth-quarter earnings and revenue topped Wall Street’s expectations, excluding a tax charge related to the recently passed tax law. But the company announced a significant decline in usage of its service and what may be the first-ever drop in daily users in the United States.
5.Microsoft reported its quarterly earnings on Wednesday after the bell, showing a clean, but modest, beat on the top and bottom lines. It also announced a one-time charge of $US13.8 billion (£9.7 billion) related to the newly-passed tax bill.
6.Chinese personal computer maker Lenovo swung to a loss in the third quarter from a year ago profit, hurt mainly by a one-off charge of $US400 million (£282.3 million) resulting from a US tax reform, and said the short-term outlook was challenging. However, the company expressed confidence it could drive growth and that US corporate tax cuts would “positively impact” future earnings of its operations in the country.
7. Manufacturing numbers are coming. Markit will deliver various manufacturing PMI estimates for January from 8.45 a.m. GMT (3.45 a.m. ET), covering Germany, Italy, France, Greece, the UK, and the eurozone as a whole. The UK’s growth rate is expected to slightly increase to 56.5.
8.Tencent is leading a deal to invest 10 billion yuan ($US1.59 billion, £1.1 billion) in Chinese menswear group Heilan Home, upping a retail rivalry with fellow internet giant Alibaba, sources with knowledge of the matter said. China’s second-largest e-commerce company JD.com and online clothing platform Vipshop will also be among the group that plans to acquire less than 10% of the company for 5 billion yuan, one source said.
9.The Greenlight Capital (Gold) fund fell 6% in January, while the S&P 500 rose 4.75%. It extends a tough streak for David Einhorn’s hedge fund.
10.A cryptocurrency project looking to transform the pot industry with blockchain and advertised by rapper The Game is facing a lawsuit, according to a Bloomberg Law report. The suit claims that the offering was not registered with authorities and that investors want their money back.
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