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3 things to know today while waiting for the Fed

While waiting for the Fed's decision, the markets are dealing with 3 pieces of relevant news for investors.
The Asian session ended with Chinese indices still in the red, pressured by less than encouraging macro data on the dragon's growth and by a sentiment that remains skeptical about Beijing's ability to effectively stimulate the recovery.
In the US, the outcome of the two-day central bank meeting is awaited, although it is almost certain that interest rates will still remain unchanged.
All the spotlight is on Powell: will he offer new insights into when the cost of money will begin to decrease? In the background, the alert is high on the evolution of the war in the Middle East, which has now extended to the Red Sea with all the potential repercussions first and foremost on oil prices.
Meanwhile, yesterday the International Monetary Fund opened a glimmer of optimism on the growth of the global economy.
Estimates have improved for global GDP, despite turbulence still lurking.
In this context, investors today evaluate 3 key factors for the markets.
1.
Fed in focus, when will the first rate cut be made? Analysts' expectations are for interest rates to remain unchanged at this meeting at the end of January.
Attention, however, will be on Jerome Powell's press conference, as well as any hints from policymakers about how soon the Fed might start easing the cost of borrowing.
“It is too early to claim victory over inflation…Therefore, we expect hints of hawkish language to persist at this week's FOMC,” said Benoit Anne, managing director of MFS Investment Management's investment solutions group.
“But there's nothing to worry about.
The macroeconomic context is as good as we have seen for a long time, characterized by reduced recession risks and favorable disinflationary dynamics,” he added.
read also Fed meeting today, rate forecasts and Powell's words Data on Tuesday showed that job opportunities in the United States unexpectedly increased in December and the previous month's data was revised upward, indicating a tighter job market still resilient which will likely give the Fed room to keep rates higher longer.
2.
China crisis Chinese markets closed lower, also disappointed by an official survey of factories in which it emerged that manufacturing activity contracted again in January for the fourth month.
The world's second largest economy is struggling to regain momentum and investor confidence is wavering.
Furthermore, according to Bloomberg, the dragon is moving towards its largest consolidation in the banking sector with the merger of hundreds of rural lenders into regional giants.
The signs are of financial stress.
After planning mergers of cooperatives and rural commercial banks in at least seven provinces starting in 2022, policymakers have identified risk management in the $6.7 trillion sector as a top priority for this year, indicating that another wave of consolidation is coming.
3.
Microsoft, the quarterly shines Microsoft recorded the strongest revenue growth since 2022, spurred by interest in new artificial intelligence products which in turn are driving renewed spending on cloud computing.
Second-quarter revenue rose and earnings per share beat analysts' consensus estimates.
Investors have rallied the stock in recent months, betting that the company can become an AI powerhouse and stand out among the Magnificent 7.
In numbers, revenue increased about 17% year over year, reaching 62.1 billion dollars, beating the Street consensus estimate of $61.1 billion.
Adjusted earnings per share (EPS) rose 33% from last year to $2.93, beating estimates of $2.76 per share, LSEG data showed.

Author: A.W.M.

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