Stock markets slide ahead of Fed decision; German consumer morale drops – Business Live | Business

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Hello and welcome to our continued coverage of the global economy, financial markets, euro area and business.
Microsoft released stellar results last night as the Covid-19 pandemic sparked a boom in PC and video game sales and led to increased use of the company’s cloud services. The Xbox and PC maker saw a 17% increase in revenue to $ 43.1 billion between October and December, which beat expectations. Profits jumped 33% to $ 15.5 billion, sending Microsoft shares to an all-time high.

Today, Facebook, Tesla and Apple are expected to report their profits after Wall Street closes.

Besides the technological results, the main event is the political decision of the US Federal Reserve at the end of its two-day meeting – the first in 2021. It is expected to leave the policy unchanged and stick to its ultra-stance. loose: That is, interest rates close to zero and $ 120 billion in bond purchases each month and other liquidity relief measures to help the US economy ravaged by Covid.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said:

And there will certainly be no hint of tightening or cutting back on policies for the foreseeable future, given that the health crisis has not lost momentum with the mutation of the virus and the delay in vaccine distributions throughout. the world. It appears Joe Biden has been too optimistic to get anyone vaccinated who wants to get vaccinated by the end of spring. The end of summer is now said to be a more realistic goal, hopefully with the production and distribution of doses.
Speaking of which, the reckless scarcity of vaccine doses could turn the trade tensions between the United States and Europe that emerged under the Trump administration into a vaccine war, as Germany now threatens to fight back on restrictions. trade by limiting exports of AstraZeneca vaccines. No one saw it coming.

As such, the latest developments around the vaccine are bad enough to keep the Fed doves in the driver’s seat.

Consumer confidence in Germany fell for a fourth month as February approached, not surprising given the country is in yet another coronavirus lockdown. Chancellor Angela Merkel and heads of state agreed last week to extend the lockdown until mid-February.

Research institute GfK said its consumer confidence index, based on a survey of 2,000 Germans, fell to -15.6 points from a revised -7.5 in January. This is the lowest reading since June. GfK researcher Rolf B├╝rkl said confidence is likely to remain low in March.

Asian markets are generally higher after a choppy session, with Japan’s Nikkei closing 0.31% higher while Hong Kong’s Hang Seng slipped 0.1% and the Australian stock market 0.72%. We expect a mixed opening for European markets.

The annual meeting of the World Economic Forum – Digital Davos – continues today. This afternoon, a series of sessions are dedicated to discussing net zero and climate change, including one with former Bank of England Governor Mark Carney, now UN Special Envoy for Climate and finance, and Al Gore, the former US vice president and environmentalist. Carney also joined Canadian fund manager Brookfield Asset Management to lead environmental and social investment.

Sessions WEF:

  • 1 p.m. GMT: on Net Zero with Mark Carney and Al Gore
  • 3 p.m. GMT: on climate change with Alok Sharma, President of COP 26, and Shell CEO Ben van Beurden
  • 5 p.m. GMT: On Net Zero Aviation with UK Transport Secretary Grant Shapps
  • 6 p.m. GMT: Carbon Markets with Bill Gates, Mark Carney and Standard Chartered CEO Bill Winters

Agenda

  • 13:30 GMT: IMF Global Financial Stability Report
  • 13:30 GMT: durable goods orders in the United States for December (forecast: 0.9%)
  • 19:00 GMT: US Federal Reserve decision on interest rates
  • 19:30 GMT: Fed press conference

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