US equity futures, European stocks advance; dollar drifts

Bloomberg

US equity futures and European stocks advanced on Wednesday, as the latest batch of corporate earnings helped steady investor nerves while they await the Federal Reserve rate decision and any developments on trade. Treasury yields ticked up as the dollar drifted.
Contracts across the S&P 500, Nasdaq and Dow Jones indexes all rose amid a slew of results from big names.
Alibaba gained in pre-market trading after third-quarter profit beat estimates. AT&T posted earnings in line with estimates and reaffirmed its 2019 guidance; the shares edged down. Apple extended gains after convincing investors that it has life beyond the iPhone. Boeing jumped after fourth-quarter profit and revenue beat estimates. McDonald’s fluctuated after fourth-quarter global sales accelerated.
Meanwhile, the Stoxx Europe 600 Index advanced amid mixed national gauges in the region after data showing euro-area economic confidence extended its worst losing streak in a decade. The UK’s FTSE 100 Index was the stand-out gainer, rallying after lawmakers voted to renegotiate Brexit.
In Asia, the yuan headed for the highest since July on hopes for the US-China trade talks getting underway in Washington. Stocks in Japan and China slid, while they increased in South Korea, Australia and Hong Kong.
The latest earnings offer some reassurance for investors after a series of lackluster results in January added to concerns about the health of the global economy. All eyes will now be on tech giants including Facebook and Microsoft when they report later today. That will be the backdrop for the Fed’s policy decision and its assessment of the US economy, while the arrival of Chinese negotiators in Washington for talks to resolve the ongoing trade dispute adds another layer of complexity.
“Such is the extent of uncertainty across global markets at the moment that investor sentiment is struggling to gain any meaningful traction,” Simon Ballard, a macro strategist at First Abu Dhabi Bank, said in a note. “The overarching veil of caution suggests that near-term positive momentum potential will likely remain limited. It is still very much global trade and the global rates outlook that sit at the heart of investor focus.”
The pound trimmed losses from Tuesday after lawmakers voted against a key proposal that sought to rule out the prospect of the UK crashing out of the European Union without a deal. Members of Parliament including Prime Minister Theresa May instead backed a proposal to strip out the most difficult part of her proposed divorce package and re-open talks with the European Union.
Elsewhere, iron ore surged after Brazil’s Vale SA, the world’s largest producer, outlined plans to cut output after a deadly dam breach. WTI crude gained as traders assessed the impact of U.S. sanctions against Venezuela, a major exporter.