Chairman of the Board of Governors of the Federal Reserve System Jerome H. Powell attends a panel during a Central Bank Symposium at the Grand Hotel in Stockholm, Sweden, January 10, 2023.
Claudio Bresciani | TT | through Reuters
Here are the most important news items investors need to start their trading day:
1. Welcome to Fed-ruary
The Federal Reserve will announce its last rate hike on Wednesday afternoon. Markets expect a quarter-point increase, which is lower than in the past few years. But, as TBEN’s Patti Domm writes, market professionals expect Fed Chairman Jerome Powell to continue to use an aggressive tone as he outlines the Fed’s way forward in its fight against inflation. Wednesday’s expected hike would bring interest rates to 4.50% to 4.75%, which is close to the Fed’s estimated end point of 5% to 5.25%. The announcement is scheduled for 2 p.m. ET and Powell will speak at 2:30 p.m.
2. New month will test stock rally
Traders on the floor of the NYSE
Last month will be a difficult task to follow. The S&P 500 posted its best January since 2019, while the Nasdaq posted its best January in 22 years. All three major indices closed higher on Tuesday, placing an exclamation mark on the month as the bulls appear to be building momentum after last year’s declines. And while investors will be chomping at what the Fed has to say on Wednesday, they’ll have a lot more on their minds as the earnings season progresses. Facebook parent meta reports after the bell Wednesday and Thursday will be a revenue bonanza, with Apple, Amazon, Starbucks and others due to report. Read live market updates.
3. Google under AI pressure
Google’s headquarters in Mountain View, California, USA, on Monday, January 30, 2023. Alphabet Inc. is expected to report earnings on February 2.
Marlena Sloss | Bloomberg | Getty Images
It’s “code red” at Google as the search giant races to compete with buzzy artificially intelligent chatbot ChatGPT. Google’s “Atlas” project is testing a chatbot called “Apprentice Bard”, which is intended to provide complex answers to questions, much like ChatGPT does. Employees also test whether it can be integrated into a search engine. The news, reported by TBEN’s Jennifer Elias, comes after employees pressured executives about the parent company in December. Alphabet would respond to ChatGPT’s sudden burst of popularity. At the time, CEO Sundar Pichai and Google AI chief Jeff Dean hinted that the company could release similar products in 2023.
4. Can’t get out
Co-founder and CEO of Snap Inc. Evan Spiegel attends the Viva Technology conference dedicated to innovation and startups, at the Porte de Versailles Exhibition Center in Paris, France on June 17, 2022.
Benoit Tessier | Reuters
snap stuck in a rut. The social media company posted its third straight disappointing quarterly earnings on Tuesday, sending its stock down by double digits during after-hours trading. It also doesn’t look like they’ll get better anytime soon after companies cut their digital advertising budgets. In a letter to investors, Snap said it expects revenue to decline 2% to 10% in the current quarter compared to the same period a year ago. Analysts had expected a small increase in sales. “In terms of revenue generation, we expect the operating environment to remain challenging as we expect the headwinds we have faced over the past year to continue through the first quarter,” the company said.
5. Dangerous radioactive capsule found
The Great Northern Highway. Western Australia. A radioactive device belonging to mining company Rio Tinto was found on the roadside after it came off the back of a truck.
Reda&co | Universal Image Group | Getty Images
We’ve heard a lot about the tiny – we’re talking about 6mm by 8mm – radioactive capsule that fell off a truck deep in a remote part of Australia. Fortunately, authorities said it was found after an extensive search of nearly a week, about 1,100 kilometers north of Perth. The object, which is part of a measuring device, could have caused severe burns and radiation illness to anyone who came into contact with it. Indeed, authorities told people to stay about ten feet away from the device if they saw it. (Again, how could you see such a small thing from that distance?) Mining company Rio Tinto apologized for the accident earlier this week.
– TBEN’s Patti Domm, Carmen Reinicke, Jennifer Elias, Jonathan Vanian and Jenni Reid contributed to this report.
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