An overview of the day ahead in U.S. and global markets by Mike Dolan.
The U.S. dollar dropped to its lowest level of the year following the long-anticipated interest rate rise, an unexpected return to growth, and President Donald Trump's recent statements.
The initial week of the Trump administration witnessed thorough analysis of policy intentions, causing markets to speculate on trade, energy, and deregulation moves.
Wall Street achieved another record high on Thursday due to positive earnings outlooks and falling oil prices aimed at reducing interest rates. Tech giants are expected to release fourth-quarter updates next week.
Overseas events put pressure on the dollar, prompting global investors to reconsider their strategies.
The Bank of Japan’s decision to raise interest rates calmed markets, while China’s yuan surged following Trump's positive comments on trade negotiations.
European markets also soared to record highs, with the euro strengthening and positive signs in euro zone business confidence.
Expectations of interest rate cuts by the European Central Bank and eased tensions over Trump's trade tariffs have lifted sentiment in the euro zone.
BlackRock's CEO mentioned at the World Economic Forum that it might be a good time to invest in Europe due to unwarranted pessimism.
Positive updates, notably in the luxury sector, contributed to increased investor confidence.
Back in the U.S., corporate optimism grew with strong earnings growth, supported by Trump's calls for lower oil prices and interest rates.
While the Federal Reserve is not expected to lower rates in its upcoming meeting, the Bank of Canada may follow the ECB in reducing borrowing costs.
Bitcoin rebounded as the U.S. abandoned long-opposed accounting guidance, signaling a shift away from prior policies.
Key events shaping U.S. markets later in the day include business surveys, home sales data, consumer sentiment reports, and earnings releases from companies like American Express, Nextera, Verizon, and HCA. Additionally, the World Economic Forum in Davos will feature prominent figures like IMF Managing Director Kristalina Georgieva and ECB President Christine Lagarde.