Investing.com - Here are the top five things you need to know in financial markets on Tuesday, January 23:
1. Global Stocks Scale New Highs as U.S. Government Shutdown Ends
Global stock markets rallied to fresh all-time highs, as sentiment was boosted after U.S. lawmakers reached a deal to end a government shutdown.
Congress passed a short-term measure on Monday to fund the federal government through Feb. 8., easing any lingering uncertainty in the financial markets.
Most major indexes in Asia closed higher, with Japan's Nikkei reaching a 26-year peak, Hong Kong's Hang Seng scaling a record high and Singapore touching a 10-year top.
In Europe, the majority of the continent's bourses posted solid gains in mid-morning trade, with almost all sectors trading in positive territory.
On Wall Street, the Dow and S&P 500 were poised to open at fresh records, as investors looked to key earnings reports to set the tone for the markets.
Tuesday sees results from blue chips Procter & Gamble (NYSE:PG), Johnson & Johnson (NYSE:JNJ) and Verizon (NYSE:VZ) ahead of the opening bell, with United Continental (NYSE:UAL) and Texas Instruments (NASDAQ:TXN) reporting after the close.
Netflix (NASDAQ:NFLX) was poised for a strong session after it beat forecasts for earnings and new net subscribers in after-hours trade Monday. The results drove the streaming company to a market capitalization of more than $100 billion for the first time, with the stock up around 9% in pre-market hours.
There is no economic data due for Tuesday.
2. Bitcoin, Cryptocurrencies Plunge Again
The prices of major cryptocurrencies plunged again, with Bitcoin, Ethereum and Ripple all suffering severe double-digit percentage losses amid a broad-based selloff, as concerns over a regulatory crackdown continued to weigh.
Bitcoin was down around 11% at $10,310. It is now down nearly 50% from a record high around $20,000 reached in mid-December.
Ethereum, the world’s second largest cryptocurrency by market cap, was down 12% at $943.60, after falling through the psychologically important $1,000 level.
Meanwhile, Ripple's XRP token was trading at $1.2400, down around 10% for the day.
2018 has not started well for cryptocurrencies, with most of the blame falling on worries about increased regulatory scrutiny in South Korea and other countries.
3. Yen Recovers After Sliding on BoJ Decision
The yen ticked up against the dollar after the Bank of Japan (BoJ) kept its monetary policy steady, while sounding slightly more upbeat on inflation expectations.
However, in his post-meeting press conference, BoJ Governor Haruhiko Kuroda attempted to talk down the possibility of a change in policy, saying the economy was not in a situation for the central bank to consider exiting its ultra-easy policy.
USD/JPY hit a high of 111.16 following the remarks, before reversing gains to trade at 110.65, down 0.2%.
The U.S. dollar continued to languish near three-year lows, with the dollar index, which tracks the greenback's performance against a basket of six other major currencies, at 90.25, not far from the three-year trough of 89.96 set last week.
Meanwhile, the British pound hit its post-Brexit referendum high of 1.4005 against the dollar, helped by optimism that Britain will reach a favorable divorce deal with the European Union.
4. Oil Prices Extend Gains on Hopes for Another U.S. Supply Drop
Crude prices pushed higher, as investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products to gauge the strength of demand in the world’s largest energy consumer.
Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2130GMT) Tuesday. Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock drop of around 1.3 million barrels, which would mark the tenth-straight fall.
U.S. West Texas Intermediate crude futures gained 30 cents, or 0.5%, to $63.87 per barrel, while Brent futures rose 25 cents to $69.28 per barrel.
5. World Economic Forum Kicks Off in Davos
Investors were likely to watch out for comments from financial and business leaders set to gather in Davos, Switzerland for the World Economic Forum, which kicks off Tuesday.
Tuesday's highlights include speeches from Indian Prime Minister Narendra Modi and Prime Minister of Canada, Justin Trudeau.
With a shutdown averted, President Trump is also expected to attend, and scheduled to speak on Friday. German Chancellor Angela Merkel, French President Emmanuel Macron and British Prime Minister Theresa May are also expected to be in attendance.