-Credit Suisse plunge: Shares in Credit Suisse Group AG dropped to their lowest level since 1991 after the bank posted a loss of 5.8 billion Swiss francs ($5.8 billion) as it wrote off goodwill and set aside provisions for litigation. Chief Executive Officer Tidjane Thiam has said the global markets and investment banking divisions will probably struggle in 2016 as he speeds up implementation of his plan to shrink the bank. Shares, which were down 10.8 percent at 11:02 a.m. London time, have lost 32 percent so far this year.
-Oil: Oil is extending its rally from its biggest drop in seven years this morning, with West Texas Intermediate for March delivery at $32.47 a barrel as of 11:12 a.m. London time. The recovery in oil prices coincides with the dollar posting its biggest two-day drop since March of last year. Elsewhere this morning, Royal Dutch Shell Plc said fourth-quarter profit fell 44 percent following the deepening oil-price rout. Morgan Stanley are not predicting a recovery in the commodity, seeing it staying ‘lower for longer.’
-Bank of England: At 12:00 p.m. London time, the Bank of England will announce its interest rate decision and release its latest inflation report. With every economist surveyed by Bloomberg expecting no change in rates, investors will be watching for any hint on the timing of a future rate rise – or cut.
-EU cuts forecasts: The European Commission trimmed its 2016 growth forecast for the euro area to 1.7 percent from 1.8 percent previously. At the same time, it slashed its 2016 inflation forecast, dropping it to 0.5 percent for the year, from 1.0 percent. In a speech at Germany’s Bundesbank this morning, ECB president Mario Draghi said that weak global inflation would not stop the central bank from adding more stimulus at its March meeting. The euro currency did not seem impressed by his dovishness, rising to a three-month high versus the dollar.
-Bond warning: The recent rally in bonds, which saw the yield on German two-year notes fall to minus 0.5 percent yesterday and U.S. treasury yields approach record lows, may be overdone, say Goldman Sachs Group Inc. and Pacific Investment Management Co. who are predicting a fall in bond prices. Jan Hatzius, chief economist for Goldman Sachs, said the 10-year yield will rise to about 3 percent by year end as the Federal reserve will raise interest rates faster than the market is now expecting.
-Commodity companies lead the way: The markets continue to take their cues from crude oil, which at one point was up about 10% in just 24 hours. Oil prices have since retreated a bit and are hovering around $32 a barrel. The pullback in oil prices is weighing on U.S. stock futures, which had been pointing higher earlier but are now solidly in the red. European markets are mixed, while nearly all Asian markets ended with healthy gains. Oil prices spiked 8% on Wednesday after the release of a report by the U.S. Energy Information Administration showing the country continued to stockpile high levels of crude oil. But the storage levels were actually smaller than expected, said Kit Juckes, a global strategist at Societe Generale.
– Earnings: Oil giants Shell (RDSB) and Statoil (STO) reported sharply lower earnings as they struggle with depressed oil prices. Other energy giants such as ConocoPhillips (COP), Valero (VLO) and Occidental Petroleum (OXY) will issue quarterly updates before trading begins. New York Times (NYT) and Dunkin’ Brands (DNKN) also report this morning. After the closing bell, the markets will hear from companies including LinkedIn (LNKD, Tech30), Lions Gate Entertainment (LGF) and News Corp (NWS).
-Media movers: Shares in Viacom (VIA) and CBS (CBS) could shoot higher when trading begins after CBS announced ailing media mogul Sumner Redstone is resigning as chairman. CBS CEO Leslie Moonves is taking his place. A similar change may occur at Redstone’s other company, Viacom, later this week: Viacom’s board is scheduled to meet Thursday. Activist investors have been pressuring Redstone, 92, to step aside because of concerns about his health.
– Economics: The U.S. government is releasing a range of employment data at 8:30 am ET. Traders will get to see the latest weekly unemployment claims, along with quarterly productivity data and monthly statistics on worker pay.
-Wednesday market recap: It was a mixed day on Wednesday. The Dow Jones industrial average added 183 points, ending the day 1.1% higher. The S&P 500 inched up 0.5%, while the Nasdaq dipped 0.3%.
-Market now predicts ZERO Fed hikes in 2016: Janet Yellen and the Federal Reserve are on another planet. That’s the message from global investors who are sending the Fed a big distress call to come back to earth. The Fed is still predicting four interest rate hikes this year, but the market now forecasts zero hikes in 2016. The closely watched Fed Futures market now has a nearly 60% probability of no rate hikes at all this year. It’s a dramatic U-turn from only a month ago when the market was pricing in a 75% probability the Fed would increase rates at least once in 2016.