Here are the top five things you need to know in financial markets on Tuesday, January 30:
1. Trump’s First State of the Union Address
Trump said on Monday he will address his proposed immigration overhaul in his speech as well as his efforts to lower trade barriers around the world for American exports. The speech will also focus on jobs and the economy, infrastructure and national security, according to the White House.
Trump’s first SOTU address comes on the back of a three-day government shutdown, and ahead of a Feb. 8 deadline for deeply divided Republicans and Democrats to agree on how to fund government and overhaul immigration laws.
2. Federal Reserve Kicks Off Policy meeting
The Federal Reserve kicks off its two-day policy meeting today, which will be the last under the leadership of Janet Yellen before she hands the chairmanship over to Jerome Powell.
The U.S. central bank is widely expected to keep interest rates unchanged. Investors, however, will be focusing on the central bank’s assessment of the economy and inflation for hints on the monetary policy outlook.
The majority of economists believe that the Fed will hike rates in March, followed by another hike in June, with a third move higher arriving in December.
3. Global Stocks Slide as Bond Selloff Rattles Markets
Markets worldwide were trading in the red, as a spike in bond yields sapped demand for equities.
In Europe, the majority of the continent’s bourses traded in negative territory, as investors digested the latest batch of corporate earnings.
Investors looked ahead to a busy day for corporate earnings, which will see big names such as McDonald’s (NYSE:MCD) and Pfizer (NYSE:PFE) report ahead of the opening bell. Advanced Micro Devices (NASDAQ:AMD) and Electronic Arts (NASDAQ:EA) are due after the close.
The Dow and S&P 500 marked their biggest one-day percentage declines in about five months on Monday, as investors got nervous about a rally in U.S. bond yields.
4. Oil Continues Lower as Focus Shifts to U.S. Supply Data
Crude prices fell, extending losses into a second session, as investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products to gauge the strength of demand in the world’s largest energy consumer.
Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2130GMT), amid forecasts for an oil-stock gain of around 0.1 million barrels, which would mark the first increase following ten straight weeks of declines.
5. Euro Zone Economy Ends 2017 On Strong Note
The euro zone’s economy finished off last year with another quarter of robust growth, underlining the view that the European Central Bank will start unwinding its asset purchase program sooner rather than later.
Gross domestic product rose 0.6% in the three months through December, according to Eurostat, in line with forecasts and marking a 19th straight expansion. On annualized rate, the region’s economy grew 2.7% over the course of last year, the strongest in a decade.