Expectations set the tone | Calamatta Cuschieri

Global markets posted mixed results on Wednesday as investors held back on making any big decisions before the Federal Reserve delivered its latest policy decision.

European markets were trading in positive territory though with a round of better-than-expected corporate earnings reports kicking off trading in February. US equities traded mixed though. Markets were given an initial boost by a rally in Apple, a day after the iPhone maker reported strong earnings.

Volvo, Siemens and Apple outperform

European equity investors had plenty of corporate reports to sift through on Wednesday. At the top of the Stoxx 600 were shares of Volvo. The move came after the Swedish automobile maker posted optimistic earnings and proposed to raise its dividend. This news sent shares soaring 6%.

Siemens was also trading well in positive territory on Wednesday. The German engineering company raised its earnings projections for the fiscal year and also reported rises in quarterly profit and income. Its shares traded 4.17% higher.

Shares in Apple were offsetting weakness elsewhere in the market thanks to the strong results it posted on Tuesday night. The company’s results were helped by stronger than estimated iPhone sales, sending the stock rising over 5% in its biggest one-day pop since July.

Bad news for Swatch

Swatch reported a net revenue figure that fell 11% last year from the previous year

Swatch Group reported a plunge in sales and profit for 2016, underscoring how shaky consumer confidence around the world and weakness in important markets like Hong Kong have taken their toll on the Swiss watch industry.

Swatch reported a net revenue figure that fell 11% last year from the previous year. To add insult to injury, net profit figures sank 47%, to CHF593 million.

Oil

Oil futures traded higher on Wednesday as US government data showed the biggest rise in crude supplies in three months, but also revealed a pullback in weekly domestic crude production.

Prices continued to draw support from estimates that showed major oil producers are easing back their production levels. Crude rose 69c, or 1.3% to trade at $53.50 a barrel on the New York Mercantile Exchange.

Fed in focus

The highlight on Wednesday came from outside the US for the first time this week, as traders turned their attention to the Federal Reserve as it released its latest monetary policy decision.

Like many had expected, the Fed left interest rates unchanged, as it acknowledged the rising confidence among consumers and businesses following Trump’s election victory. The decision to leave the target federal funds rate unchanged in a range of 0.5 to 0.75 percent was unanimous and widely expected by investors.

The Fed provided little direction on when it might next raise borrowing costs, as officials grapple with the uncertainty created by a new presidential administration. Policy makers in December penciled three rate hikes into their 2017 forecasts, but committee members differ over assumptions regarding the extent to which tax cuts, spending and regulatory rollbacks proposed by Trump might boost growth and inflation.

This article was issued by Rebecca Naudi, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.