European stocks are seen opening lower on Wednesday as investors remain wary of stretched valuations and delays in the delivery of coronavirus vaccines.
The downside may remain capped after tech heavyweight Microsoft reported earnings that topped the Street’s expectations.
Microsoft’s Azure cloud computing services grew more 50 percent, boosting optimism for other U.S. tech giants, including Apple and Facebook, which will unveil their quarterly earnings later in the day.
Asian markets are trading mixed, gold held steady and oil edged higher while Treasury yields and the U.S. dollar were little changed ahead of the Federal Reserve’s monetary policy announcement due out later in the day.
The U.S. central bank is widely expected to leave interest rates unchanged, but many expect the central bank to provide additional guidance about its bond purchasing program to help speed the economic recovery.
U.S. stimulus talks may also remain in focus after U.S. Senate Majority Leader Chuck Schumer said Democrats will move forward on President Joe Biden’s $1.9 trillion coronavirus relief plan without Republican support if necessary.
On the Covid-19 front, global infections surpassed 100 million, with the U.K. becoming the first nation in Europe with 100,000 deaths.
The Biden administration plans to increase overall weekly vaccination after reviewing the current vaccine supply and manufacturing plans.
On the economic front, official data released earlier in the day showed that China’s industrial profits grew 20.1 percent year-on-year in December, bigger than the 15.5 percent increase registered in November underpinned by the manufacturing sector. This was the eighth consecutive month of growth.
U.S. stocks ended slightly lower overnight as lawmakers remained locked over the details of the fiscal package, the vaccine distribution hiccups continued and investors braced for a slew of big earnings.
The Dow Jones Industrial Average and the tech-heavy Nasdaq Composite slipped around 0.1 percent while the S&P 500 eased 0.2 percent.
European markets advanced on Tuesday as share buybacks and deal-making activity outweighed concerns over the virus spread and political uncertainty in Italy.
The pan European Stoxx 600 rose 0.6 percent. The German DAX surged rallied 1.7 percent, France’s CAC 40 index gained 0.9 percent and the U.K.’s FTSE 100 edged up 0.2 percent.
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