Investing.com - Here are the top five things you need to know in financial markets on Tuesday, October 31:
1. Global Stocks Mixed; Central Banks, Data, Earnings in Focus
The global stock rally showed signs of slowing, bringing at least a momentary pause to this month’s strong performance, as investors digested a raft of central bank news, while continuing to monitor a fresh batch of data and corporate earnings.
Asian-Pacific markets ended mixed, as investors in the region digested the release of the Bank of Japan's rates decision and China's official Purchasing Managers' Index.
Among notable standouts, Japan's Nikkei pared losses in late trading to close the session nearly unchanged after the nation’s central bank said it would maintain its easy-money measures. Across the Korean Strait, South Korea's KOSPI ended at a record high, boosted by strong earnings results from Samsung (KS:005930). But Chinese equities wobbled after data showed a sharper-than-expected slowdown in October factory growth.
In Europe, stocks held at five-month highs, supported by a jump in the shares of oil firm BP (LON:BP), which announced buoyant earnings and a share buyback program, but trading was largely muted as Germany's stock market was closed for a holiday.
On Wall Street, U.S. stocks pointed to a higher open, as investors looked to key earnings reports to set the tone for the markets. On Monday, Wall Street closed lower on news that U.S. lawmakers are discussing a gradual phase-in of much-anticipated corporate tax cuts.
2. Federal Reserve Kicks Off 2-Day Policy meeting
The Federal Reserve kicks off its two-day policy meeting today, at which it is not expected to take action on interest rates, though it could point the markets toward the rate hike widely expected in December.
The policy meeting takes place just days before President Donald Trump names a new Fed chair on Thursday to replace Janet Yellen when her term ends in February, with sources saying the pick is going to be current Fed Governor Jerome Powell.
Powell is seen as being more dovish on monetary policy than other contenders for the post, especially compared to Stanford University economist John Taylor, who has been regarded as another top challenger for the position.
Besides the Fed, there is a batch of data on today's economic calendar, including the employment cost index at 8:30AM ET (1230GMT), S&P Case/Schiller home price index at 9:00AM ET (1300GMT), Chicago PMI at 9:45AM ET (1345GMT) and CB consumer confidence at 10AM ET (1400GMT).
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was a shade higher, while Treasury yields eased up.
Investors were cautious following news that investigators probing Russian interference in the U.S. election had charged President Donald Trump's former campaign manager and following reports that planned tax cuts could be gradually phased-in.
3. U.S. Earnings Season More Than Halfway Over
Around 55% of the S&P 500 has reported financial results as of this morning, with 74% of those companies beating estimates on the bottom line while 66% have topped sales expectations according to Thomson Reuters I/B/E/S.
Tuesday's batch of corporate earnings includes results from Mastercard (NYSE:MA), Pfizer (NYSE:PFE), Kellogg (NYSE:K), Under Armour (NYSE:UA), Shopify (NYSE:SHOP), AK Steel (NYSE:AKS), Cummins (NYSE:CMI), Aetna (NYSE:AET) and Lumber Liquidators (NYSE:LL), all due ahead of the opening bell.
After the close, EA Sports (NASDAQ:EA), United States Steel (NYSE:X) and Anadarko Petroleum (NYSE:APC) are just a few of the names on the docket.
4. Facebook, Twitter, Google Executives Head to Capitol Hill
Executives from Facebook (NASDAQ:FB), Twitter (NYSE:TWTR) and Alphabet (NASDAQ:GOOGL)'s Google will testify before a Senate Judiciary subcommittee hearing on allegations of Russian interference in the 2016 U.S. presidential election.
Facebook General Counsel Colin Stretch, Twitter acting General Counsel Sean Edgett, and Richard Salgado, Google's director of law enforcement and information security, are among the witnesses at the hearing to discuss solutions to Russian disinformation.
Facebook said on Monday that Russia-based operatives published about 80,000 posts on the social network over a two-year period and that about 126 million Americans may have seen the posts during that time.
Twitter separately has found 2,752 accounts linked to Russian operatives. That estimate is up from a tally of 201 accounts that Twitter reported in September.
The Russian government has denied any attempts to sway the election, in which President Donald Trump, a Republican, defeated Democrat Hillary Clinton.
5. Soft Euro Zone Inflation Backs Up Slow ECB Tapering
Inflation in the euro zone slowed more than expected in October, remaining well below the European Central Bank's target, data showed, lending support to the bank's decision to withdraw monetary stimulus only slowly.
Consumer prices rose 1.4% this month, the European Union’s statistics office said. That was below expectations for an increase of 1.5% and compared a final reading of a 1.5% advance in the prior month. In a further blow to the ECB’s drive to boost inflation, the core rate dropped to a five-month low of 0.9%.
The ECB last week said it would cut its bond purchases in half from January, but extended the program until the end of September, promised years of stimulus and left the door open to backtracking, citing muted price pressures.
In a separate release, the European Union's statistics office said gross domestic product in the 19-country currency bloc increased 0.6% on the quarter and 2.5% on the year, mostly in line with forecasts.
Another report showed that the region's unemployment rate dropped to 8.9%, its lowest level since 2009.
The euro was a touch lower at 1.1630 against the dollar.