The top five things to know about what’s happening in the financial market on Wednesday, October 26:
1. Apple sinks 3% following displeasing numbers
Apple’s share dropped approximately 3% in the pre-market trade on Wednesday following reporting of a third successive quarter of a decrease in iPhone sale following the close the day before, as well as slimmer-than-expected predicted profit margins over the coming holiday season.
The initial annual sales decline since 2001 was recorded and after Apple proposed a conservative outlook on the profit margins of 38% to 38.5%. This outlook can be compared to expectations of nearly 39%.
Due to the drop in the Apple shares (NASDAQ: AAPL), which are expected on Wednesday to lead the Dow lower in the session. Before the market opened, this drop in Apple shares caused the investors to look towards other earnings from Boeing (NYSE: BA) and Coca-Cola Company (NYSE:KO).
2. A 3-week low for oil on U.S inventory data
Oil prices reached a three-week low with a more than 1% drop on Wednesday, following an announcement from the American Petroleum Institute late in the earlier session that the U.S. oil inventories had increased by 4.8 million barrels by the end of the week of October 21. This announcement was higher than the 2.0 million barrel expectation by the analysts.
The official data will be released by the U.S. Energy Information Administration at 10:30 am ET (14:30GMT).
At 5:57 am ET (9:57GMT) there was a fall of 1.12% for U.S. crude oil futures to {currency}49.40. Brent oil dropped 1.02% to {currency}50.27.
3. The quiet period for the Fed begins with a countdown to rate decision
There is a quiet period during which the Federal Reserve (Fed) officials avoid making public appearances or comments on any monetary policies and economy. This quiet period started on Wednesday, before the decision on interest rates set on November 2, at the end of the two-day meeting.
Most of the analysts consider that next week’s change in policy to be “unlikely” because it is close to the upcoming U.S. presidential election, which is only six days later. Their consideration is that the markets were being priced at the chance of an increase in rates of only 7.2%. The chances for December stood at 73.6%.
As there are no more remarks from the Fed officials, there will be adjustments in the expectations by the markets, based on the economic data which is received. There will be particular attention given on Friday to the release of the third-quarter gross domestic product.
The economic calendar for Wednesday will include September’s wholesale inventories and the goods trade balance, as well as an early reading on the service sector activity for October from Markit and the new home sales from September.
4. The U.K. has a {currency}103 billion Brexit black hole approaching
On Wednesday, the consequences of the decision for Britain to leave the European Union (EU) are concerning and have put a damper on the investor sentiment in the U.K. these concerns sent London’s FTSE 100 below the psychological level of 7,000 points.
According to the Resolution Foundation, the calculations are that the British government was heading towards borrowing more each year, while over the next five years taking in much fewer tax receipts. The results of this would leave the U.K. with a gap of {currency}84 billion in public finances.
5. BoJ could move away from the target for bond purchase
A move away is being considered by the Bank of Japan (BoJ) from references in monetary policy statements to the 80 trillion yen ({currency}7.7 billion) purchase level, as stated by those who are familiar which the discussions.
Instead of focusing on the number of purchases, the primary goal was said to be to move away from a particular number to help concentrate on the new objective to try to keep the Japanese bond yields close to zero.
An announcement is scheduled by the BoJ next week about their policy decision. There is a consensus about expecting no new easing measures.
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