By Stephen Culp
Feb 2 (Reuters) - A look at the day ahead in markets
from Stephen Culp, New York stock market reporter.
Asian markets are set for an upbeat Thursday as U.S. stocks
whipsawed to a higher close after the Federal Reserve delivered
an expected 25 basis point interest rate hike and warned it
still expects 'ongoing increases' as it battles inflation.
All three major U.S. stock indexes reversed earlier losses
to sail across the finish line in positive territory, under
assurances from Fed Chairman Jerome Powell that he believes
price growth can be tamed "without a significant economic
decline."
In his remarks and Q&A session following the policy
decision, Powell said "there's more work to do," before its
goals are met, but acknowledged data shows inflation is
beginning to cool.
"The door is cracking open to end rate hikes, but they still
have a chance for one more rate hike at the next meeting," said
Ryan Detrick, chief market strategist at Carson Group in Omaha.
"Inflation data continues to show major improvements, which is
exactly what the Fed needs to take their foot off the pedal."
The European Central Bank and the Bank of England are
expected to hike their key interest rates by 50 basis points on
Thursday.
On the economic front, restrictive central bank policies
appear to be dampening factory activity, with purchasing
managers' indexes around the world either in contraction or
struggling to expand.
Fourth-quarter earnings season is running on all cylinders,
with 190 of the companies in the S&P 500 having reported
already. Of those, 69% have delivered consensus-beating profits,
according to Refinitiv.
Shares of Meta Platforms Inc jumped more than 18%
in extended trading after the social media bellwether forecast
first-quarter revenue above Wall Street estimates, signaling a
rebound in demand for digital ads after months of weak sales.
Healthcare companies BristolMeyers-Squibb Co , Eli
Lilly and Co and Merck & Co are due to report
before trading commences on Wall Street on Thursday, with the
heavy-hitting triple play of Apple Inc , Amazon.com and Alphabet Inc expected after the session
ends.
Elsewhere, the U.S. dollar lost ground against a
basket of world currencies, while crude prices settled sharply lower due to a buildup of U.S. oil stocks.
Here are some key developments that could provide more
direction to markets on Thursday:
- South Korea releases CPI inflation data (Jan)
- Australia posts building approvals (Dec)
- U.S. planned layoffs (Jan), weekly jobless claims land
before the opening bell, factory orders (Dec) shortly after
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(Reporting by Stephen Culp; Editing by Deepa Babington)
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