The US Federal Reserve will begin its 2-day monetary policy meeting today amid weakening economic data, although the International Monetary Fund has slightly raised its forecasts for this year. The Eurozone appears to have avoided recession in the second half of last year, but it too is suffering from a loss of momentum at the end of the year. ExxonMobil will report record profits, and companies like McDonald’s, Caterpillar, and AMD posted big gains. Adani seems to have attracted enough bids to make an important equity offering for the Indian capital market. Here’s what you need to know about the financial market on Tuesday, January 31.

1. FED MEETING TO START AMID IMF RAISING ECONOMIC GROWTH OUTLOOK

The US Federal Reserve will begin its 2-day meeting, which is expected to end with a 25 basis points increase in the target range rate for the federal funds rate to 4.50-4.75%. This will be the second consecutive time that the central bank has slowed the pace of its policy tightening in response to economic data that has deteriorated in recent months.

That picture is likely to be fleshed out later with new data on U.S. home prices and consumer confidence, but Fed officials will also turn their attention to fourth-quarter data on the employment cost index, which could illustrate why they believe it is still necessary to raise rates further to ride out inflationary pressures.

The International Monetary Fund said the day before that it expects U.S. economic growth to slow to 1.4% this year and 1.0% influenced by the Fed’s rate hike. But it raised its forecast for global growth this year by 0.2% to 2.9%, reflecting stronger momentum in China and India.

2. THE EUROZONE HAS AVOIDED RECESSION, BUT GROWTH HAS SLOWED DOWN

The eurozone economy seems to have avoided recession after all in the second half of last year. Growth in the fourth quarter was 0.1%, reversing the decline in the previous 3 months when wholesale energy prices peaked.

However, there was evidence that economic momentum has stalled. Retail sales in Germany and consumer spending in France came in well below expectations in December, while data from the European Central Bank in its bank lending survey for the last quarter showed a sharp decline in demand for credit, especially from households. In the UK, lending also slowed sharply in December.

As in the US, the main supporting factor in Europe remains the labor market, which remains resilient. Seasonally adjusted German unemployment data showed a 15,000 decline in January, a larger than expected drop.

The data was released 2 days before the European Central Bank and the Bank of England make their latest monetary policy decisions. The market still expects a half-point rate hike from both institutions, but analysts say the latest figures have at least left the possibility of a more cautious outlook on the future path of the rate.

3. AMERICAN STOCK MARKET PREPARES FOR EARNINGS REPORTS; EXXON AND HUAWEI BAN REPORT IN FOCUS

U.S. stock indexes are set to open under pressure again on Tuesday as the earnings reporting season, accompanied by announcements of job cuts and disappointing guidance, undermines confidence this year.

By 06:10 Eastern Time (11:10 GMT), Dow Jones futures were down 128 points, or 0.4 percent, while S&P 500 futures were down 0.5 percent and Nasdaq 100 futures were down 0.7 percent.

Reporting season kicks off again on Tuesday, with Pfizer (NYSE:PFE), United Parcel Service (NYSE:UPS), McDonald’s (NYSE:MCD), Caterpillar (NYSE:CAT), General Motors (NYSE:GM) and ExxonMobil ((NYSE:XOM) preparing to report before the market opens, while Advanced Micro Devices (NASDAQ:AMD) will be in focus after the close in the context of Intel (NASDAQ:INTC)’s alarmingly weak performance last week. Amgen (NASDAQ:AMGN), Stryker (NYSE:SYK),Chubb (NYSE:CB), Mondelez (NASDAQ:MDLZ) and Electronic Arts (NASDAQ:EA) will also report after the close.

Other stocks that are likely to be in the spotlight are Johnson & Johnson (NYSE:JNJ) after recent news of the company’s ongoing battle with talcum powder class action lawsuits. Reports of a possible outright ban for U.S. companies from working with Huawei could have a negative impact on the tech sector.

4. ADANI HAS (ALMOST) ATTRACTED ENOUGH BIDS FOR A STOCK OFFERING

Gautam Adani continues to struggle. The Indian tycoon’s $2.4 billion share sale attracted enough bids to be fully subscribed by the end of trading on the Mumbai bourse on Tuesday.

Shares of Adani Enterprises (NS:ADEL) rose for the second straight day on Tuesday, climbing 2.8%. However, they are still about 20% down from where they were before short-seller Hindenburg Research accused the company of massive market manipulation to inflate the share prices of the company and its affiliates.

UAE-based International Holding Company (ADX:IHC) said on Monday it would get about 16% of the shares, while Jupiter Asset Management, BNP Paribas (EPA:BNPP), Société Générale (EPA:SOGN) and Goldman Sachs (NYSE:GS) are also key investors, according to the Financial Times.

The deal is seen as a test of international confidence not only in Adani but also in India’s growth model, where the close relationship between oligarchic groups and Prime Minister Narendra Modi’s government is often controversial. Among other things, Hindenburg drew attention to the disproportionate amount of loans taken by Adani from state-owned banks.

5. EXXON POSTS RECORD PROFITS; NO CHANGE IN OPEX+ POLICY EXPECTED

ExxonMobil broke its own records with a $59 billion profit for 2022 amid a surge in oil and gas prices. The company said its fourth-quarter earnings per share topped forecasts at $3.40 and production rose to 3.822 million barrels of oil equivalent per day.

Overall, oil prices stabilized the day before after month-end profit taking knocked out some of the weak speculative long positions that had built up this month. OPEC and its allies are still not expected to increase output when their ministers meet to set production policy on Wednesday.

As usual, at 4:30 p.m. ET, the American Petroleum Institute will present data on U.S. oil inventories.