1. China’s economy: China’s economic growth slumped to its lowest level in nearly three decades as the world’s second largest economy feels the effects of a prolonged trade war with the United States.
Fed policy makers agreed the strategy unanimously at their first meeting of 2019.
Sentiment got another lift after markets closed when Facebook (FB) revealed a record $6.9 billion profit for the final three months of 2018, despite its seemingly endless PR crises. That was a jump of 61% from the same period a year earlier and well ahead of Wall Street estimates. Its shares were up more than 10% in extended trading.
Following the Fed move, the next cue for markets could be the outcome of trade talks later Thursday between China and the United States
“The other hurdle [for global markets] is of course the US-China trade negotiation, which is much more challenging,” said Tai Hui, chief market strategist, Asia Pacific, at JP Morgan Asset Management.
2. Bank earnings: US bank earnings kick off Monday with Citigroup (C), which is set to report second quarter results before the bell.
The company announced it has agreed to pay $1.5 billion to settle the Justice Department’s investigation into WMC Mortgage, the subprime lender that was shut down a decade ago. GE previously set aside that amount.
But GE’s adjusted profit declined more than Wall Street analysts had anticipated because of an an $872 million loss at its turbine division.
Tesla also revealed that its chief financial officer was leaving — the latest senior executive to exit the electric car company. The company was shaken last year by a series of departures by top managers, including a chief accounting officer who left after less than a month.
Earlier this month, Tesla announced layoffs impacting about 7% of its full-time workforce. Musk said the layoffs were necessary to allow Tesla to sell variants of the Model 3 at lower prices.
4. Europe’s mixed bag: A bunch of major European companies reported earnings on Thursday.
H&M said 2018 had been “a challenging year for H&M group and the industry.” Its shares dropped 1.5%.
And shares in Swatch slumped as much as 6% in Switzerland after the watch making group said business had slowed in the last three months of the year.
Royal Dutch Shell (RDSA) delivered a more positive story. The company reported stronger than expected results, after getting a boost from higher oil and gas prices. Annual profits jumped 80% last year to $23.4 billion from $13 billion in 2017. Investors pushed Shell stock up 5%.
Diageo (DEO), the maker of Johnnie Walker, Ketel One and Guinness, also reported strong earnings. It said sales in Asia were particularly strong. Its stock climbed 4.6%.
7. Earnings bonanza: 3M (MMM), Bristol-Myers (BMY), Comcast (CMCSA), Hershey Foods (HSY), Hess (HES), Raytheon (RTN), Southwest Air (LUV), UPS (UPS) and Xerox (XRX) will release earnings before the open.
The Census Bureau plans to release its New Home Sales report for November at 10 a.m. ET.
5. Coming this week:
Monday — China Q2 GDP; Prime Day begins; Citi (C) earnings
Tuesday — US retail sales; Germany’s ZEW economic sentiment index; JPMorgan Chase (JPM), Wells Fargo (WFC), Goldman Sachs (GS), Charles Schwab (SCHW), Johnson & Johnson (JNJ), United Airlines (UAL) earnings
Wednesday — US housing starts and building permits; Eurozone inflation; Bank of America (BAC), eBay (EBAY), IBM (IBM), Netflix (NFLX) earnings; US oil inventories
Thursday — Japan inflation; Morgan Stanley (MS), Philip Morris (PM), Honeywell (HON), Microsoft (MSFT) earnings
Friday — American Express (AXP) and BlackRock (BLK) earnings; University of Michigan consumer sentiment