It’s a big day for news driven trading action with a flood of earnings from major companies splitting the focus with two big central bank meetings. Early trading is likely to be mainly influenced by overnight earnings reports. Apple’s huge quarter and earnings beat looks set to help the NASDAQ and perhaps some other US indices shrug off the economic concerns that knocked stocks down yesterday. Yahoo may also be active on news of its plan to spin off its holding in Alibaba into a separate company. After US exchanges close this afternoon, Facebook reports its Q4 earnings, so we may see some positioning in its shares ahead of the numbers and conference call. Afternoon trading looks likely to be focused on two central bank decisions. The US Fed is up first. While no change to interest rates is expected for this meeting and the next at least, traders may closely look at the statement for any signs of whether the central bank may be thinking about delaying the start of interest rate increases from the widely expected middle of this year. While the Fed has historically focused more on domestic needs than overseas trends when setting monetary policy, yesterday’s data highlights that the central bank is in a bit of a spot right now. 2014 was a great year for the US economy but 2015 looks like it could be more mixed as the negative impact of lower energy prices on employment in the oilpatch and related industries can hit quick while it takes longer for the benefits of lower energy costs for businesses and consumers to work their way through. Yesterday’s data which showed big declines for durable goods and Caterpillar earnings (both related to reduced demand for heavy equipment) was offset by much better than expected new home sales and consumer confidence. The Fed may need to tread carefully to manage the economy through this transition, and it’s possible that rate hikes could be delayed a meeting or two. Note that the Fed could start as late as September and still reach 1.00% by the end of the year with quarter point increases each meeting. An hour after the Fed is the RBNZ decision. Although inflation data from New Zealand was a bit soft recently, traders are not expecting the central bank to do anything on interest rates this time around. Overnight both NZD and AUD have been climbing and among the top performers after Australian inflation came in slightly below expected but still above 1.5%. This reaction indicates traders think the RBNZ and RBA are currently focusing on lower dollars than interest rate cuts as their main stimulus tools. Based on this, traders may be on the lookout for any comments about the value of NZD in the RBNZ statement and whether the central bank resumes threats to intervene or not. Crude oil is down again today with WTI testing the bottom of its $45-50 channel again. This has put pressure on CAD and NOK again with another test of $0.8000 for CADUSD and $1.2500 for USDCAD underway. Oil could be active later in the morning around the US inventory report. Corporate News Apple Wow! $3.06 vs street $2.60, revenues $74.6B vs street $67.3B. guides next Q sales to $52-55B around street $53.6B Boeing $2.31 vs street $2.11, guides 2015 year to $8.20-$8.40 below street $8.65, guides 2015 sales to $94.5-$96.5B vs street $93.25B. Yahoo $0.30 vs street $0.29, announces plan to spin off its remaining shares in Alibaba into a separate public company. Spinoff expected in Q4 after lockups expire. Yahoo will continue its core business and keep its stake in Yahoo Japan. Guides Q1 ex-TAC sales to $1.02-$1.06B below street $1.1B Electronic Arts $1.22 vs street $0.92, sales $1.43B vs street $1.29B, guides next Q to $0.22 vs street $0.26, raises Mar 2015 year guidance to $2.35 from $2.05
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