The earnings wave is set to continue today as Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Alibaba (NYSE:BABA) and Alphabet (GOOG, GOOGL) open their books for scrutiny following yesterday's results from Microsoft (NASDAQ:MSFT) and Facebook (NASDAQ:FB). A lot is riding on the success of tech companies as the recent deluge of reports has helped Wall Street climb back from two days of losses. The sector accounts for more than a fifth of the S&P 500, meaning strong earnings could determine the direction of the stock market overall this week.

Economy

The Federal Reserve held its Fed Funds target range at 1.25-1.5% on Wednesday as Janet Yellen gets ready to depart the central bank. The economy continues to strengthen, and inflation is expected to move up, according to the policy statement, while the FOMC continues to anticipate further gradual increases in short-term rates. Rate markets have about fully priced in March as the next move.

India is going to miss its budget deficit targets as Prime Minister Narendra Modi "takes up programs to uplift underdeveloped regions" and creates jobs before next year's national elections. The budget shortfall will be 3.5% in the year ending March 31, Finance Minister Arun Jaitley told lawmakers in New Delhi, wider than the previous 3.2% target. Bond yields rose and the rupee fell following the announcement.

Italy's euroskeptic, populist party won't "consider" having a referendum on EU membership, according to Luigi Di Maio, the leader of the 5-Star Movement. "This is the time to make investments and re-launch the Italian economy. I don't want to even consider that last resort." M5S is seen as the most popular party in the country, with 27.8% of the vote, but a hung parliament is still expected after the March 4 election.

It's PMI Day across the globe. Japanese factory activity in January showed its strongest growth in almost four years, while China's Caixin-Markit manufacturing PMI was unmoved from the previous month's reading of 51.5. Meanwhile, booming manufacturing in the eurozone saw the region roll into the new year with near-record momentum. PMI manufacturing data in the U.S. will be released at 9:45 a.m. ET.

Stocks

The number of people in North America who check Facebook (FB) every day dropped in Q4, but dominance in digital advertising powered another surge in quarterly profit. Excluding a $3.19B tax charge, net income jumped 20% to $4.27B. "I want to be clear: The most important driver of our business has never been time spent by itself. It's the quality of the conversations and connections," CEO Mark Zuckerberg said on a conference call, boosting shares 1.4% AH.

Overnight earnings roundup: Nokia (NYSE:NOK) +4% premarket as a one-off patent payment from China's Huawei offset weak global network equipment sales. Despite a U.S. tax reform hit of $2B, Shell (RDS.A, RDS.B) more than tripled its earnings in 2017 amid higher oil and natural gas prices. Unilever (UL, UN) ended its tumultuous year on a higher note, reporting an acceleration in Q4 sales growth due to strong emerging market performance.

Waymo and General Motors are still leading the pack in California's self-driving report cards. As required by state law, automakers must disclose the number of miles driven and the frequency that human drivers were forced to take control. Waymo (GOOG, GOOGL) logged about 353,000 autonomous miles last year, with 63 disengagements, while GM's Cruise reported about 132,000 miles of test driving and 105 disengagements (a 1400% rate of improvement).

Amid heightened concerns about North Korea, the U.S. military carried out an unsuccessful test to shoot down an incoming dummy missile from Hawaii on Wednesday, according to several administration officials. If confirmed, the flop would be the second straight failure of a Raytheon (NYSE:RTN)-developed SM-3 Block IIA missile, after an interceptor in June failed to hit its target.

The news comes as Boeing was awarded a $6.56B contract to continue managing the Midcourse missile defense system intended to stop North Korean or Iranian ICBMs. The contract includes overseeing the addition of 20 ground-based interceptors to 44 already stationed in California and Alaska, and extends Boeing's (NYSE:BA) management role through 2023.

As part of its ongoing restructuring plan, Sears (NASDAQ:SHLD) is laying off 220 employees primarily at the company's corporate headquarters in Hoffman Estates, Illinois. "The company continues to achieve significant progress, with actions taken in fiscal year 2017 to realize $1.25B in annualized cost savings," according to a spokesman. Sears also expects to cut about 150 more employees at Hoffman Estates at the beginning of April.

Issuing weak guidance and announcing plans to eliminate 20% of its workforce last month, GoPro (NASDAQ:GPRO) is looking to generate additional revenue. People who sign up for the $4.99 monthly GoPro Plus service plan will now get a replacement camera if they ever break their current one, "no questions asked." The cost is about 20% of the camera's original price.

Pandora Media rose another 3.4% in after-hours trading following word that it's taking on an organizational restructuring. The company is shifting resources to focus on ad tech and audience development, and flattening its structure overall. Pandora (NYSE:P) will also expand its presence (and hiring) in Atlanta, a region with lower costs than its headquarters in Oakland, California.

More than a million followers have disappeared from the accounts of dozens of prominent Twitter (NYSE:TWTR) users in recent days as the company faces growing criticism over the proliferation of fake accounts. It follows a weekend NYT story about Devumi, a company selling artificial engagement to prominent users. Twitter said on Saturday it would take action against Devumi's practices.

Twenty-First Century Fox has agreed to pay more than $3B to air NFL Thursday Night Football games for the next five seasons. That comes out to about $60M per game, up from the $45M CBS and NBC (NASDAQ:CMCSA) paid for broadcast rights this season. Fox (NASDAQ:FOXA), which already airs Sunday NFL matchups, aims to be a leader in sports after it closes the sale of some film and television assets to Disney (NYSE:DIS).

The board at CBS is expected to discuss a potential merger with Viacom (VIA, VIAB) today, sources told Reuters. Shari Redstone, whose family's National Amusements controls both companies, has pushed for the two to reunite after a split more than a decade ago, but CBS chief Les Moonves has been reticent in the past about recombining the two media giants.

Model for other U.S. districts? San Francisco will expunge and dismiss thousands of misdemeanor and felony marijuana convictions for those sentenced prior to the legalization of marijuana in California. The unprecedented action comes at a turbulent time for the U.S. cannabis industry after Attorney General Jeff Sessions moved to undermine previous federal guidance for state-by-state marijuana regulation.

The Trump administration is poised to ask Congress for deep cuts to clean energy research spending, with a proposal to slash the budget of the Office of Energy Efficiency and Renewable Energy by 72% to $575.5M. According to the Washington Post, the spending reductions would hit programs aimed at driving down the cost of solar energy, as well as fuel efficient vehicles, bioenergy and electric car technologies. Related tickers: ASYS, AXTI, CSIQ, CSUN, CVV, DQ, EMKR, ENPH, FSLR, GEX, GLBL, HQCL, JASO, JKS, RGSE, RUN, NRG, SEDG, SOL, SKYS, SPWR, SUNW, TAN, TERP, TSL, TSLA, VSLR, YGE

Wednesday's Key Earnings

Anthem (NYSE:ANTM) +1.8% beating expectations.
AT&T (NYSE:T) +3.2% AH following strong guidance.
Boeing (BA) +4.9% lifted by its delivery outlook.
eBay (NASDAQ:EBAY) +8.4% AH giving a positive sales forecast.
Eli Lilly (NYSE:LLY) -5.4% on sluggish animal health.
Enterprise Products (NYSE:EPD) -2.4% narrowly beating estimates.
Facebook (FB) +1.4% AH with soaring mobile ad sales.
Microsoft (MSFT) +0.2% AH on major Azure growth.
Mondelez (NASDAQ:MDLZ) unmoved despite solid organic sales.
Paypal (NASDAQ:PYPL) -11.1% AH after eBay favors Adyen.
Qualcomm (NASDAQ:QCOM) -0.2% AH amid disputes with Apple.
Sirius XM (NASDAQ:SIRI) +2.7% despite in-line results.

Today's Markets

In Asia, Japan +1.6%. Hong Kong -0.8%. China -1%. India -0.2%.
In Europe, at midday, London -0.1%. Paris +0.4%. Frankfurt +0.1%.
Futures at 6:20, Dow -0.1%. S&P +0.1%. Nasdaq +0.1%. Crude +0.7% to $65.17. Gold -0.2% to $1341.10. Bitcoin -5.6% to $9601.
Ten-year Treasury Yield +2 bps to 2.74%

Today's Economic Calendar

Auto Sales
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Productivity and Costs
9:45 PMI Manufacturing Index
9:45 Bloomberg Consumer Comfort Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet