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ECB’s decision with strong data from corporates | Calamatta Cuschieri

European markets finished the trading session on Thursday with strong gains, as investors digest a day full of earnings reports. Twitter and Ford announced better-than-expected quarterly results.

Meanwhile, the European Central Bank decided to extend the QE program by nine more months while keeping interest rates unchanged

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Calamatta Cuschieri
27 October 2017, 9:38am
The European Central Bank (ECB) decided to extend the quantitative easing (QE) program by nine more months, and decided to halve asset purchases from January, while keeping interest rates unchanged.
The European Central Bank (ECB) decided to extend the quantitative easing (QE) program by nine more months, and decided to halve asset purchases from January, while keeping interest rates unchanged.
European Central Banks decision

Eurozone policymakers held interest rates unchanged after a meeting in Frankfurt and decided to halve asset purchases from January, from the current €60 billion per month. The move reflects broad market expectations. The quantitative easing program was extended, as the current round of buying bonds will expire at the end of December. The net investments at a pace of €30 billion will continue through September or beyond, if necessary.

The interest rate on the main refinancing operations was held at zero. The rate on the marginal lending facility was maintained at 0.25%, and the deposit facility benchmark is staying at 0.4% in the negative. The guidance was also unchanged, as the governing council, again, expressed expectations that rates will be at present levels "for an extended period of time, and well past the horizon" of monetary stimulus.

The bond buying will continue until inflation reaches the targeted sustainable level, the statement adds. The principal payments from the scheme will be reinvested for even longer, rate-setters stressed.

Twitter

American tech giant Twitter's diluted earnings per share (EPS) stood at $0.03 in the third quarter of the year, while the quarterly net loss amounted to $21 million, according to a report issued by the company on Thursday. 

 The company reported a 14% rise in daily active usage compared to the same quarter last year, marking the fourth consecutive quarter of double-digit growth. Meanwhile, monthly active usage was at 330 million in the third quarter, up 4% year on year.

"This quarter we made progress in three key areas of our business: we grew our audience and engagement, made progress on a return to revenue growth, and achieved record profitability," said Jack Dorsey, Twitter's CEO. "We're proud that the improvements we're making to the product continue to bring people back to Twitter on a daily basis. Twitter's shares reacted positively.

 

Ford

Ford Motor Company reported a 65% increase in adjusted pre-tax profit for the third quarter of this year at $2 billion compared to the same period last year. Earnings per share in the first full quarter of new CEO Jim Hackett rose to $0.39, exceeding analyst forecasts, on net income of $1.6 billion. The results may as well increase the confidence to tighten the full-year adjusted EPS guidance in the range $1.75 to $1.85.

The rise in its North American pre-tax profit was driven by strong cost performance, the auto giant said in its financial update, while a record pre-tax profit in Asia was prompted by material cost reductions and lower structural costs. Shares of Ford rose following the earnings report. 

 

 

Disclaimer

This article was issued by Rodrick Duca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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