This is the daily morning update from NDTV Profit. Over the next few minutes, we’ll bring you up to speed with everything you need to know to start your day ahead of the curve.
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Let’s start with what’s happening overseas first. Globally, investors are still waiting to understand the implications of US President Donald Trump’s actions on tariffs. With China having reciprocated with higher tariffs, which will kick in on Feb. 10, investors are uncertain whether a larger trade war will erupt.
In fact, that is having a bearing on officials that will determine the course of the US monetary policy too. Federal Reserve officials have said that they’re uncertain about the inflationary impact of Trump’s tariffs. For one, Chicago Fed President Austan Goolsbee warned that ignoring the potential inflationary impact of tariffs would be a mistake, whereas Richmond Fed President Thomas Barkin said it remains impossible at this early stage to know where cost increases from any tariffs might be absorbed or passed along to consumers. That’s based on a Reuters report.
Meanwhile, US services sector activity unexpectedly slowed in January amid cooling demand, and that’s having a cooling effect on inflation. The Institute for Supply Management said its nonmanufacturing purchasing managers index slipped to 52.8 last month from 54.0 in December. It was pegged at 54.3 by economists.
Overnight, Wall Street ended with gains. The Dow Jones Industrial Average climbed over 300 points, while the S&P 500 and the Nasdaq had more modest upticks. Google-parent Alphabet dropped 7.3% after posting downbeat cloud revenue growth on Tuesday and earmarking a higher-than-expected $75 billion investment for its AI buildout this year.
Going forward, investors will wait for cues on jobs in the non-farm payrolls report for January, that will be released tomorrow. Indications on jobs will likely affect the Federal Reserve’s decision on interest rate cuts going forward.
Across the ocean, in England, the central bank is set to cut interest rates later today for only the third time since just after the start of the pandemic. This, as it tries to bolster a flagging economy that is still contending with inflation.
Markets in the Asia Pacific region have started positive, with all three early risers starting in the green.
In the commodity space, oil prices have fallen more than 2% overnight, as a large increase in US crude and gasoline stockpiles indicated weaker demand, while worries about a new China-US trade war are raising fears of slower economic growth. The Energy Information Administration has said that US crude oil inventories rose sharply last week, as refiners facing soft petrol demand did maintenance work.
