European cash equity markets are mostly lower at the closing bell (FTSE 0.0%, DAX -0.6%, CAC -0.5%). The FTSE has outperformed slightly, supported by travel stocks after TUI posted higher FY18 revenues and backed their FY19 targets. Other bourses have been dragged lower by heavy losses in the telecom sector and lower oil prices with US crude futures losing over one-percent at the lows. Wall Street also saw a lower open although the major bourses are off their worst levels. Under Armour is among the best performer, rising over 16% after posting stronger than expected Q4 sales. In fixed, Treasuries have eased back from their best levels amid comments from the new Fed Chair Powell. Speaking at his swearing-in ceremony, Powell said they will remain alert to financial stability risks and preserve essential gains in financial regulation seen since the crisis. We also heard from ECB President Mario Draghi although his comments were uneventful. Weidmann added that continuing bond purchases beyond the agreed timeframe is not needed. Turning to currencies, the Dollar Index has edged lower while Sterling is also off its best levels while the Swiss Franc and Japanese Yen remain the outperformers. Still to come today, the API oil report at 21:30 GMT plus earnings after the Wall Street close from Cisco.
* US Corporate News:
- PepsiCo (+0.1%): Q4 EPS $1.31 versus $1.30 expected | Q4 Revenue $19.53 Bln versus $19.37 Bln expected | Sees FY18 EPS $5.70 versus $5.67 expected
- Under Armour (+16.4%): Q4 EPS $0.00 versus $0.00 expected | Q4 Revenue $1.4 Bln versus $1.3 Bln expected | Sees FY18 EPS $0.14-0.19 versus $0.22 expected
- Walgreens Boots Alliance (+0.4%) is in talks with AmerisourceBergen (+7.8%) about acquiring the pharmaceuticals distributor
- WSJ: Amazon.com Inc. (+1.8%) is pushing to turn its nascent medical-supplies business into a major supplier to U.S. hospitals and outpatient clinics that could compete with incumbent distributors of items from gauze to hip implants.
- Caterpillar (+1.0%) world retail sales for the three months ending in January +23%, Asia-Pacific +51%, North America +23%
- CNBC: Xerox (-1.9%) sued by third-largest shareholder Deason for alleged fraud related to takeover by Fuji
* US NFIB Small Business Optimism (Jan) 106.9 versus 106.2 expected, previous 104.9
* @RealDonaldTrump: Negotiations on DACA have begun. Republicans want to make a deal and Democrats say they want to make a deal. Wouldn’t it be great if we could finally, after so many years, solve the DACA puzzle. This will be our last chance, there will never be another opportunity! March 5th.
* ECB President Mario Draghi said Europe has recovered from recession, and significant progress has been made in many areas making us better equipped for the future
* ECB’s Weidmann said continuing bond purchases beyond the agreed timeframe is not needed.
* Speaking at his swearing-in ceremony, Fed Chair Powell said they will remain alert to financial stability risks and preserve essential gains in financial regulation seen since the crisis.
* Cleveland Fed President Mester (V):
- If the economy evolves as I anticipate, I believe further increases in interest rates will be appropriate this year and next year, at a pace similar to last year’s.
- I’ll continue to monitor financial market developments closely, but for now, I expect the economy will work through this episode of market turbulence and I have not changed my outlook. In my view, the underlying fundamentals supporting the economy are very sound.
- In my view, the underlying fundamentals supporting the economy are very sound.
* US Director of National Intelligence says decision times is coming ever closer on responding to North Korea.
* Senior Administration Official said they have no formal plans to enact a reciprocal tax.
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