Here’s everything you need to know in markets on Friday.
Russia Cuts Rates. The Bank of Russia cut its benchmark interest rate to 15% from 17% in its latest effort to stimulate its struggling economy. It did it “given the change in the balance of risks accelerating the growth of consumer prices and the cooling economy,” the central bank said in a statement. “In the future, inflationary pressures will be restrained by a decrease in economic activity.” The ruble weakened to as much as 71.80 per dollar.
Europe’s Deflation Nightmare Is Getting Worse. Eurozone consumer prices fell by 0.6% year over year in January. This was worse than the -0.2% report in December and the -0.5% expected by economists. “Energy prices are not the only story; core inflation hitting all-time lows too,” Pantheon Macroeconomics’ Claus Vistesen noted.
Germany Had Its Best Retail Sales Since Before The Crisis. Sales were up 4% in December, compared with the same month last year, the strongest rate of growth since at least 2007. Spain’s retail sales also grew at the fastest pace in 11 years in December.
Amazon Stock Rocketed Up After Company Results Came Out. Earnings per share for the fourth quarter came in at $US0.45 (versus analyst expectations of $US0.18). That’s a beat by $US0.27, and a big improvement from the $US0.95 loss last quarter. Shares surged 14% after hours.
Google Posted Slightly Disappointing 4th-Quarter Results. Revenue (minus traffic-acquisition costs) was $US14.48 billion versus $US14.61 billion estimated. Gross revenue was $US18.1 billion, up 15% from last year. Adjusted EPS was $US6.88 versus $US7.08 expected. Shares initially sank 3%, but the market reaction was limited.
Markets Are Down. Europe is modestly in the red, with Britain’s FTSE 100 down 0.5%, France’s CAC 40 down 0.3%, and Germany’s DAX down 0.3%. In Asia, Japan’s Nikkei swelled a little, closing 0.39% higher, while Hong Kong’s Hang Seng fell 0.3%. US futures are in the red, with Dow futures down 121 points and S&P 500 futures down 13 points.
Here Comes Shake Shack. The New York City burger chain begins trading on the New York Stock Exchange under the ticker SHAK. The company’s IPO consisted of 5 million shares at $US21 each, for a total capital raise of $US105 million. This values the company at about $US745 million.
Here Comes US GDP And ECI. We’ll get the first estimate of fourth-quarter GDP at 8:30 a.m. ET Friday. Economists estimate the US economy grew at a 3.0% rate, driven by 4.0% growth in personal consumption. At the same time, we’ll get the fourth-quarter employment cost index, which economists estimate increased by just 0.6%.
How’s The Economy Doing Right Now? We’ll get two January economic reports. At 9:45 we’ll get the Chicago Purchasing Managers Index; economists estimated the index fell to 57.5 in January. At 10 a.m., we’ll get the final read on sentiment from the University of Michigan; economists expect the index to stay up there at post-recession highs.
Greece’s New Government Has Its First European Talks Friday. Greece’s new anti-austerity government is set to hold its first talks Friday with its eurozone partners about its ambitions to secure a reduction in the massive debts linked to its €240 billion ($US269 billion) international bailout.