Investing.com - Here are the top five things you need to know in financial markets on Wednesday, January 17:
1. U.S. stocks await Goldman and Bank of America near record highs
Though all three major benchmarks briefly hit new all-time highs on Tuesday, stocks failed to hold the gains and ended lower. But traders looked set to take another shot on Wednesday while waiting for fourth quarter results from Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC).
Goldman is forecast to report earnings per share (EPS) of $4.91 on revenue of $7.61 billion at 7:30AM ET (13:30GMT), while analyst are looking for Bank of America to post an EPS of $0.44 on revenue of $21.53 billion at 6:45AM ET (11:45GMT).
Elsewhere, world shares pulled back from record highs on Wednesday, set for only their second day of losses in 2018 as lower commodity prices and a string of downbeat updates from companies dampened the mood in global markets.
2. Dollar stages recovery ahead of industrial production, Fed references
The dollar moved higher against major rivals on Wednesday, rising for the first time in six days as investors had shunned the greenback on speculation that the global economic recovery will outpace U.S. growth and prompt other major central banks, particularly the European Central Bank, to begin unwinding loose monetary policy at a faster pace.
Still ahead on Wednesday, traders will focus on December industrial and manufacturing production and the publication of the Federal Reserve’s Beige Book that gives insight into the economic situation in the 12 Fed districts.
Market participants will also keep an eye on comments from several policymakers for hints on future moves in monetary policy. Chicago Fed president Charles Evans, Dallas Fed chief Robert Kaplan and Cleveland Fed president Loretta Mester will all be making appearances on Wednesday.
3. Cryptocurrency selloff continues at Bitconnect shuts down platform
The price of digital currency bitcoin along with other cryptocurrencies extended a broad-based selloff into a second day on Wednesday amid fears of a wider trading crackdown initially triggered by the threat of a trading ban in South Korea.
Grabbing headlines in the cryptocurrency world, Bitconnect announced on Tuesday that it was closing its lending and exchange platform.
BitConnect has been accused of constituting a Ponzi scheme with its own cryptocurrency Bitconnect coin, and several figures in the space, including the founder of ethereum, Vitalik Buterin, have levied criticisms against it in recent months.
The company blamed several factors for the closure including bad press, DDoS attacks and, most notably, the receipt of cease-and-desist letters from regulators Texas State Securities Board and the North Carolina Secretary of State Securities Division.
The news appeared to cause waves in other cryptocurrencies with double-digit losses being registered across the major players.
Bitcoin was trading at $9,899.9 by 5:56AM ET (10:56GMT) on the Bitfinex exchange, down 11% from its previous close, after losing 18% on Tuesday.
Ethereum, the world’s second largest cryptocurrency by market cap, was last at $870.00 on the Bitfinex exchange, off 14%, after falling 19% the previous day.
Meanwhile, Ripple's XRP token was trading at $0.9828 on the Poloniex exchange, down around 18% for the day.
4. Oil pulls back from 3-year highs as attention focuses on U.S. inventories
Oil prices registered modest losses on Wednesday, pulling back from its highest levels since the end of 2014, 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). Official data from the Energy Information Administration will be released Thursday, amid forecasts for an oil-stock drop of around 3.6 million barrels, which would mark the ninth-straight fall.
The reports come out one day later than usual due to the Martin Luther King Day holiday on Monday.
5. BoC expected to hike rates to levels not seen since 2009
The Bank of Canada's latest interest rate decision is due at 10:00AM ET (15:00GMT) on Wednesday, with most experts expecting the central bank to raise its benchmark rate by 25 basis points to 1.25%.
If confirmed, it would be the third rate hike over the past six months to its highest level since 2009, as recent data has painted a robust picture of the Canadian economy.
However, despite markets pricing in odds of about 90% for the tightening, some experts warn that Wednesday’s decision could then mark a pause for the tightening cycle.
The central bank raised rates in July and September for the first time in seven years but has since worried about a number of uncertainties that could have an impact on the country’s economy, including renegotiation of the North American Free Trade Agreement. The next round of NAFTA talks will kick off on January 23.
The loonie was holding steady ahead of the announcement. At 6:00AM ET (11:00GMT), USD/CAD inched up 0.05% to 1.2440.
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