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Morning Brief: Fed minutes to reveal idea behind rate hikes

Wednesday, January 3, 2018

What to watch today

After a strong first day of the trading year, investors will on Wednesday digest economic data on auto sales and manufacturing activity for December, while the minutes from the latest Federal Reserve meeting will also feature on the schedule. The minutes should give markets an idea of what Fed officials were thinking when they voted to raise interest rates by 0.25% at their Dec. 13-14 meeting.

The earnings calendar on Wednesday will feature no major announcements.

On Tuesday, the Dow gained triple-digits, while the S&P 500 and Nasdaq both hit record highs. The rally to kick off the trading year should signal good things to come for markets, according to LPL Financial’s Ryan Detrick. Detrick notes that in the last 20 years, markets have gained an average of 14% when the first day of the year is in the green, with down days to kick off the year leading to down markets for the year.

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Top news

US blocks MoneyGram sale to China’s Ant Financial: Ant Financial’s plan to acquire U.S. money transfer company MoneyGram International Inc (MGI) collapsed on Tuesday after a U.S. government panel rejected it over national security concerns, the most high-profile Chinese deal to be torpedoed under the Trump administration. The $1.2 billion deal’s failure represents a blow for Jack Ma, the executive chairman of Chinese internet conglomerate Alibaba Group Holding Ltd (BABA), who owns Ant Financial together with Alibaba executives. [Reuters]

Spotify hit with $1.6 billion copyright lawsuit: Music streaming company Spotify was sued by Wixen Music Publishing Inc. for allegedly using thousands of songs, including those of Tom Petty, Neil Young and the Doors, without a license and compensation to the music publisher. [Reuters]

Southwest and American to pay bonuses after tax bill: Airlines are sharing some of their tax-law windfall with employees and Boeing, the big aircraft maker. American and Southwest said that they will pay employees bonuses of $1,000 each, a gesture that American said would cost $130 million. Southwest also said that it exercised options to buy more new jets from Boeing while delaying orders for some others. [AP]

Petrobras to pay $2.95B to settle US class action: Brazil’s state-controlled oil company, Petroleo Brasileiro SA, known as Petrobras, said that it has agreed to pay $2.95 billion to settle a U.S. class action brought by investors seeking to recoup money they claim to have lost as a result of a corruption scandal. Investors sued Petrobras after prosecutors in Brazil accused former executives at the company of accepting more than $2 billion in bribes over a decade, mainly from construction and engineering companies. [Reuters]

For more of the latest news, go to Yahoo Finance

A visitor walks past prayer ribbons hanging on a barbed-wire fence at the Imjingak pavilion near the demilitarized zone (DMZ) in Paju, South Korea. North Korean media has reported that an inter-Korean communication line was reopened at the border village of Panmunjom in response to South Korea’s unification minister Cho Myoung-gyon proposing holding high-level talks with North Korea ahead of winter Olympics on Feb. 9. (Photo by Chung Sung-Jun/Getty Images)

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The Morning Brief provides a quick rundown on what to watch in the markets, top news stories, and the best of Yahoo Finance Originals.