Top 5 Things to Know in the Market on Thursday

Investing.com - Here are the top five things you need to know in financial markets on Thursday, February 1:

1. Dollar remains under pressure post-Fed

The dollar struggled for direction against major rivals on Thursday even after the Federal Reserve announced a day earlier that it was holding rates steady, a move that was widely expected.

The U.S. central bank signaled its confidence about inflation and growth in the world's biggest economy, reinforcing views it will raise rates several more times this year.

The majority of economists believe that the U.S. central bank will hike rates in March, followed by another hike in June, with a third move higher arriving in December.

Though the dollar initially reacted to the upside on Wednesday, the move was short-lived. At 6:03AM ET (11:03GMT) Thursday, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slipped 0.02% at 88.93, still holding above last week’s low of 88.25, its weakest level since December 2014.

The American currency has had a rough start to 2018, closing off January with monthly losses of roughly 3.3% and is down around 13% since the start of 2017.

2. Dow pulls back after best month in nearly 2 years

Despite a brief dip into the red after the Fed announced its latest policy decision, U.S. stocks ended with gains on Wednesday, breaking two consecutive days of losses that had some market participants showing concern over a possible capital rotation from equities to bonds.

Still, Wall Street registered solid gains for the first month of the year. The Dow and S&P 500 posted monthly gains of 5.6% and 5.8%, respectively, their best performance since March 2016. The Nasdaq Composite logged it’s 7.3% monthly rise, its best monthly advance since October 2015.

U.S. stocks pointed to a more cautious stance on Thursday, as investors prepared for another round to top-notch earnings. At 6:07AM ET (11:07GMT), the blue-chip Dow futures fell 45 points, or 0.17%, S&P 500 futures inched up 1 point, or 0.04%, while the Nasdaq 100 futures dipped 2 points, or 0.03%.

Likely to see big move’s in Thursday’s session were those firms who presented a mixed bag of earnings reports after the prior session’s close. Leading losses after earnings in pre-market trade, PayPal (NASDAQ:PYPL) fell nearly 7%. However, eBay (NASDAQ:EBAY) Facebook (NASDAQ:FB) and AT&T (NYSE:T) saw solid gains while Microsoft (NASDAQ:MSFT) managed to stay in positive territory.

Among companies on tap for Thursday, DuPont (NYSE:DWDP), Mastercard Inc (NYSE:MA), Time Warner Inc (NYSE:TWX) or UPS (NYSE:UPS) will release earnings before the opening bell, while Apple (NASDAQ:AAPL) Google-parent Alphabet (NASDAQ:GOOGL), Amazon.com (NASDAQ:AMZN) or Visa Inc (NYSE:V) will report after the close.

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3. Data deluge also set to move markets

With the Fed decision over and done with, and even as market participants wait for the next big date with Friday’s nonfarm payrolls, investors will have a deluge of data to chew over on Thursday.

At 8:30AM ET (13:30GMT), weekly jobless claims along with fourth quarter unit labor costs and nonfarm productivity will be released.

The data point of the day will arrive at 10:00AM ET (15:00GMT) with the Institute of Supply Management’s manufacturing purchasing managers’ index (PMI) for January.

4. Global PMIs in focus

Ahead of the ISM’s manufacturing PMI, investors chewed over references for factory activity on a global level.

In Asia, China’s factory growth stuck at its fastest pace in 13-months in January, according to the reading from Caixin/Markit, while Japan’s manufacturing activity hit a four-year high at the beginning of 2018.

Over in Europe, euro zone manufacturing continued to show strong growth, although it slipped from the all-time high seen in December.

A notable outlier, the manufacturing PMI for the UK hit a seven-month low.

5. Bitcoin loses $44 billion in value in worst monthly decline ever

Bitcoin had a tough start to 2018 as its slump during January wiped off no less than $44.2 billion in value of what had been a $200 billion market cap at the end of its stellar rally in 2017.

The 30% drop in value during the month of January, the worst monthly decline in its history, meant the largest digital currency has lost more than half its value, roughly 52%, since its all-time highs of near $20,000 last December.

The selloff continued on Thursday as Bitcoin slumped 6.6% at $9,535.80 by 6:07AM ET (11:07GMT) on the Bitfinex exchange.