Here is what you need to know.
- The Fed says it will be patient on future rate hikes. The Federal Open Market Committee held its key interest rate in a range between 2.25% and 2.5% on Wednesday, and in his press conference following the decision, Federal Reserve Chairman Jerome Powell said he didn’t know whether the next move would be an interest-rate hike or cut.
- The Fed told the stock market exactly what it wanted to hear. Powell said the Fed’s balance sheet wasn’t on “automatic pilot” and it wouldn’t shrink much further, sending the S&P 500 to a gain of 1.5%.
- Stock markets around the world were higher. Hong Kong’s Hang Seng (+1.08%) led the gains in Asia Thursday, and Britain’s FTSE (+0.44%) was out front in Europe. The S&P 500 was set to open up 0.15% near 2,685.
- Italy has officially entered a recession. Europe’s fourth-largest economy contracted 0.2% in the fourth quarter, after shrinking 0.1% in the third quarter, according to data released Thursday by the statistics agency Istat.
- Facebook soars after crushing earnings. Facebook shares climbed 12% in after-hours trading Wednesday after the social-media company delivered top- and bottom-line results that were well above Wall Street estimates.
- Elon Musk declares Tesla will be profitable for ‘all quarters going forward.’ Tesla’s CEO made the comments on the electric-car maker’s fourth-quarter earnings call, after the company posted just its third quarterly profit.
- Microsoft just misses on earnings. The most valuable company in the world by market cap earned $US1.08 a share, missing estimates by a penny, as revenue matched the $US32.5 billion than analysts were expecting. Shares were trading down about 2%.
- Deutsche Bank is bracing for a forced merger by the middle of the year. Executives at the bank are becoming increasingly concerned that a government-brokered merger with Commerzbank may be their only option, Bloomberg says.
- Earnings reports keep coming. Altria, Ferrari, General Electric, MasterCard, and UPS are among the names reporting ahead of the opening bell, while Amazon announces its quarterly results after markets close.
- US economic data is heavy. Initial claims will be released at 8:30 a.m. ET before Chicago PMI and new-home sales cross the wires at 9:45 a.m. ET and 10 a.m. ET. Data is set to conclude at 4 p.m. ET with net long-term TIC flows. The US 10-year yield is down 1.4 basis points at 2.66%
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