Judgment America – Global calm returns, regional banks scream – February 7, 2024 at 12:01 pm

Mike Dolan's look at the day ahead in US and global markets A frantic period of macro and corporate news has calmed down and investors are feeling more upbeat about the state of global markets – global stock indices hit 2-year highs on Wednesday. under.

Growing hopes this week for a lasting ceasefire in the four-month-old Gaza conflict helped calm market concerns about how the escalating regional conflict could affect energy and shipping costs.

But even as Chinese authorities continued to struggle to end the ongoing market rout there — shares in Hong Kong fell again on Wednesday despite further gains on the mainland — the picture elsewhere was up.

US corporate earnings are consistent with a picture of strong economic growth.

More than half of S&P 500 companies reported fourth-quarter updates, more than 80% beat forecasts, and total annualized earnings growth in the three months was 8.1% — more than double last month's expectations.

And many prominent companies from around the world joined it.

Shares of Toyota, for example, hit record highs on Wednesday after this week's forecast upgrade and amid expectations that the Japanese automaker's solid hybrid lineups will benefit from cooling interest in electric vehicles.

Wall St. Disney and Uber top the agenda for another busy day in

While a picture of strong growth left bond markets somewhat unsettled earlier this week, Treasury yields fell for a second day — with $42 billion of 10-year notes set to be auctioned later in the session. The dollar index fell again and stock futures were steady.

Fed officials have been vague about the timing of rate cuts this year, but they are in no rush. However, futures are almost fully priced in for an initial cut in May and 120 basis points of easing this year.

But it's not all roses and moonlight. Some are worried about the recent volatility in US regional bank share prices.

Shares of troubled New York Community Bancorp tumbled nearly 10% before hours Wednesday after ratings agency Moody's cut the bank's credit rating to junk and warned of further downgrades.

The problems have also affected the wider regional banking universe, with analysts warning of “management risks” at the bank. The KBW regional banking index fell 1.4% on Tuesday and ended down 12.6% in six sessions.

In Europe, the outlook for central bankers is similar to that of the central bank — with some slight variations from top officials at the Bank of England and the European Central Bank on Wednesday.

Equinor fell 3.7% after the Norwegian oil and gas producer reported a higher-than-expected operating profit in the quarter, but said it would reduce its total payout to shareholders in 2024.

In politics, the US elections were high on the agenda this year.

Donald Trump is not immune from allegations that he conspired to overturn his 2020 election loss, a federal appeals court ruled Tuesday, bringing the former US president one step closer to an unprecedented criminal trial and likely sending the issue to the Supreme Court. A Trump campaign spokeswoman said the ruling “threatens the foundation of our republic.” Key agenda items that could give direction to US markets later Wednesday: * International Trade Balance US December, Trade Balance Canada December * Federal Reserve Board Governor Adriana Kugler, Fed Governor Michelle Bowman, Boston Fed President Susan Collins, Richmond Fed President Thomas Parkin all speak. Bank of Canada policy meeting minutes, * US Treasury sells $42 billion in 10-year notes * US corporate earnings: Walt Disney, Uber, Paypal, News Corp, Fox Corp, CVS, Hilton Worldwide, Wynn Resorts, Yum! Brands, Emerson Electric, Molina Healthcare, Paycom, Everest, McKesson, Globe Life, Equifax, Steris, Fleetcar, Allstate, Punk, CDW, Fox, Ceridian HCM, Monolithic Power Systems.