Investing.com - Here are the top five things you need to know in financial markets on Wednesday, January 18:
1. Earnings in focus with Goldman and Citi on deck
Market participants continue to keep an eye on the quarterly reporting season with the focus Wednesday on earnings from Goldman Sachs (NYSE:GS) and Citigroup (NYSE:C) out before the market open.
As of the prior session, 35 S&P firms had reported with 72% beating earnings-per-share on growth of 12.1% and 51% topping sales forecast with growth of 4.7%, according to earnings trend analysis firm The Earnings Scout.
These analysts have warned that while earnings growth is accelerating, the beat rate has gone down and estimates are going lower.
They noted that stocks have risen in the post-Trump trade without a commensurate increase in earnings estimates and recommended, “Be cautious, not greedy.”
2. Yellen and inflation on tap
Among a slew of appearances from Federal Reserve (Fed) officials on Wednesday including Dallas Fed president Robert Kaplan and Minneapolis Fed chief Neel Kashkari, investors will focus on remarks from Fed chair Janet Yellen who is due to speak on the economy to the Commonwealth Club of San Francisco at 3:00PM ET (20:00GMT).
Also on the day’s agenda, investors will digest consumer price index (CPI) data for December out at 8:30AM ET (13:30GMT) with headline annual inflation expected to increase to 2.1% and core CPI forecast to move up to 2.2%.
In other reports of interest, markets will receive readings on December industrial production or the latest Beige Book that offers readings on the state of the economy in the 12 Federal Reserve districts.
3. Dollar breaks 5-day losing streak
The dollar recovered positions against major rivals on Wednesday, easing off a one-month low hit after U.S. President-elect Donald Trump said earlier this week that the greenback was “too strong”.
While waiting on data and Fed appearances later in the session, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last up 0.42% at 100.68, off Tuesday’s five-week trough of 100.23.
USD/JPY moved higher for the first time in eight days, bouncing off Tuesday’s one-and-a-half month low of 112.58.
4. Oil slumps on expectations for ramped up U.S. production
Oil prices fell more than 1% on Wednesday as the U.S. Energy Information Administration (EIA) said on Tuesday that U.S. shale production is set to snap a three-month decline in February.
Next month's production will edge up 40,750 barrels per day (bpd) to 4.748 million bpd, the EIA said, while it was expected to drop by 5,900 bp in January.
Meanwhile, the Organization of Petroleum Exporting Countries (OPEC) cut its forecast for oil supply growth form non-OPEC countries to 120,000 barrels-per-day (bpd), from its previous 300,000 bpd estimate due to several output cuts among its members.
According to OPEC’s monthly report , the world oil supply fell by 0.30 million bpd in December from the prior month, though it rose by 0.71 million bpd year-on-year.
Furthermore, eyes began to turn in U.S. stockpile levels as industry group the American Petroleum Institute was set due to release its weekly report at 4:30PM ET (21:30GMT) later on Wednesday.
Official data from the Energy Information Administration will be released Thursday, amid forecasts for an oil-stock drop of 960,000 barrels.
The reports come out one day later than usual due to Monday's Martin Luther King Jr. holiday.
U.S. crude oil futures fell 1.62% to $51.63 at 7:10AM ET (12:10GMT), while Brent oil traded down 1.44% to $54.67.
5. Global stocks mixed ahead of full agenda
U.S. stock futures pointed to a small rebound at the open on Wednesday as investors await the deluge of earnings, data and Fed speakers. At 7:11AM ET (12:1GMT), the blue-chip Dow futures edged forward 0.01%, S&P 500 futures inched up 0.02% and the Nasdaq 100 futures advanced 0.10%.
Elsewhere, European stocks were trading mixed as British Prime Minister Theresa May’s Tuesday speech on Brexit continued to weigh, while upbeat earnings reports lent support.
Earlier, Asian stocks also closed mixed though Chinese stocks benefited from positive housing data and Japan’s Nikkei moved higher as the dollar recovered against the yen.