Good morning! Here’s what you need to know in markets on Thursday.
1. The Bank of England will announce its first monetary policy decisions on 2018 on Thursday. Although policy is widely expected to stay on hold, the MPC is likely to set the tone for a year in which markets expect at least one, and possibly two, interest rate increases.
2. Brexit could cause huge new costs for British businesses, with some industries facing additional costs of up t0 20%, according to a leaked government analysis.The newly released data looks at the non-tariff barrier costs that leaving the European Union could cause for UK businesses – everything from diverging regulation to customs checks, though not additional tariffs.
3. US Senate leaders on Wednesday announced a massive bipartisan budget deal designed to end Washington’s cycle of short-term funding fixes. But it’s unclear how it will be received by each party’s rank-and-file members as leaders work to avoid another shutdown before Friday. The deal is expected to increase defense and domestic spending by just under $300 billion over two years, as well as provide billions of additional dollars in disaster-relief funding.
4. The mini-riot stocks that spilled into global markets this week has calmed down for now, but the benchmark index in the world’s second-biggest economy, China, is still tumbling. While many markets across Asia including South Korea and Australia were higher today after a calmer session on Wall Street, a short time ago the Shanghai Composite was down 1.66%, having been down a full 2% down earlier. The index has now lost around 8% from its highs in January.
5. London’s housing market is set for another turgid year. A January survey by the Royal Institute of Chartered Surveyors showed house prices in the capital remain firmly in negative territory, with considerably more respondents to the survey reporting falling prices than rising prices.
6. Tesla on Wednesday reported a smaller-than-expected loss for the fourth quarter and beat on revenues. The company earned $3.29 billion in revenue but recorded a net loss of $770.8 million, or $3.04 adjusted per share. In its earnings release, Tesla said it expected 2018 revenue growth to “significantly exceed” last year, driven by the Model 3 sedans and its energy-storage units.
7. Japan’s finance regulator will inspect more cryptocurrency exchanges. On-site checks of cryptocurrency exchanges potentially vulnerable to cyberattacks will occur after Coincheck Inc had $400 million stolen by hackers.
8. Apple customers who want to buy an iPhone on an installment plan could soon be entering into a contract with Goldman Sachs. The bank’s consumer division, Marcus, is in talks with Apple to offer financing for iPhones and other products, the Wall Street Journal reported on Wednesday.
9. A bad loan to the ex-chairman of embattled South African retailer Steinhoff International cost Wall Street banks over $1 billion on their fourth-quarter earnings – and Bank of Americawould like to know how it was able to happen. The bank, which booked a $292 million charge related to Steinhoff in the fourth quarter, hired outside law firm Davis Polk & Wardwell late last year to probe the €1.6 billion ($2 billion) loan to Steinhoff’s former chairman Christo Weiss that a handful of global banks – including Citigroup, JPMorgan, and Goldman Sachs – took part in.
10. President Donald Trump on Wednesday broke his silence about the stock market’s recent tumbles and volatility, arguing on Twitter that the decline was a “big mistake” that happened amid a strengthening US economy. “In the ‘old days,’ when good news was reported, the Stock Market would go up.” Trump said. “Today, when good news is reported, the Stock Market goes down. Big mistake, and we have so much good (great) news about the economy!”