-China stocks slammed: The Shanghai Composite Index plunged 6.4 percent to 2,749.79 at the close. Huang Weimin, a hedge fund manager whose Chinese stock-index futures wagers returned more than 6,200 percent last year, has warned investors should sell their shares now, before it’s too late. To add to China’s woes, discrepancies between its reported exports to Hong Kong and the shipments registered by the territory widened in December. China recorded $1.94 of exports for every $1 of imports Hong Kong registered from the mainland, suggesting currency-market swings may have spurred a fresh round of fake trade invoicing.
-Haven bid: German sovereign debt yields hit fresh all time lows this morning with two-, three- and five-year notes all gaining. Rising sovereign debt prices in the U.K. have increased worries of a debt auction not being covered with Robert Stheeman, chief executive officer of Britain’s Debt Management Office, saying that he can’t rule out an uncovered auction happening “at some point.” Last week’s auction of gilts due in 2021 had a bid-to-cover ratio of only 1.07, the lowest since a 2009 sale of 40-year securities. Gold rose to a two-month high.
-Oil fluctuates: Oil prices continue to be volatile. After falling as low as $29.28 a barrel in early trading, West Texas Intermediate was at $30.27, down 0.2 percent at 11:10 a.m. London time. Bets on oil falling below $25 a barrel have risen to a record.
-Fed decision day guide: Markets are losing faith in more rate increases from the Fed, with implied probabilities suggesting a 30 percent chance of no more hikes at all this year. It is certainly safe to say that the economic landscape has changed and the Fed needs to recognise this tomorrow, without taking a March rate rise completely off the table. Timothy Duy, professor of practice and senior director of the Oregon Economic Forum at the University of Oregon, says that choppy markets could put the central bank in “risk management” mode.
-Apple earnings: Apple Inc. is due to report earnings after the bell today. With shares down 11 percent since the company’s last report in October, analysts will be watching closely for the key iPhone sales number. The earnings will also be monitored by the hundreds of suppliers around the globe whose fortunes are closely tied with the company.
-Tricky Tuesday: U.S. stock futures are stabilizing after being deep in the red earlier this morning. Global markets had been in sell-off mode earlier, with negative sentiment taking hold as concerns rose about the falling price of oil. After crude oil futures had fallen dramatically earlier in the month, prices are stabilizing around $30.50 per barrel. That has calmed investors’ nerves. European markets are now mixed in afternoon trading. But Chinese stocks took a big hit. The main Shanghai Composite index dropped 6.4% and the Shenzhen index plunged 7.1%. Simon Smith, chief economist at FxPro in London, said the downward spiral may have further to run. «Volatility has been rising throughout the year so far, but we’re still some way off the big spike in the Vix — the volatility index or ‘fear gauge’ — last August and so there’s potential for moves in markets to get even more dramatic,» he said.
-Earnings: Many U.S. companies are releasing quarterly earnings this morning. Johnson & Johnson (JNJ), Procter & Gamble (PG), Lockheed Martin (LMT), Sprint (S), 3M (MMM) and Coach (COH) are among the firms due to report before the bell. After the close, Wall Street will hear from Apple (AAPL, Tech30), AT&T (T, Tech30) and Capital One (COF). Wall Street analysts expect Apple will report an astounding $18.2 billion in profit in the past quarter. That would be a record, not just for Apple, but for any U.S. company — ever. But the market will also be paying close attention to iPhone sales.
-Economics: There are some important economic reports coming out Tuesday. The Case-Shiller home price index will come out at 9 a.m. ET, giving investors insight into the current state of the U.S. housing market. Then the U.S. Conference Board will issue its January Consumer Confidence Index at 10 a.m.
-Stock market mover — Siemens: Shares in German industrial conglomerate Siemens (SIEGY) are rising by an impressive 7.5% in Europe as investors cheer the company’s latest quarterly results.
-Monday market recap: It seems like Wall Street woke up on the wrong side of the bed on Monday. The Dow Jones industrial average dropped 1.3% and the S&P 500 and Nasdaq shed 1.6%.