World equities subdued on eve of Fed rate call
LONDON — Global stock markets were subdued on Tuesday on the eve of a monetary policy update from the US Federal Reserve (Fed) and ahead of earnings results from tech giants.
While trading floors are geared up for a rocket-fuelled surge in economic activity in the second half of the year and into the next, thanks to vaccinations and the easing of lockdowns, traders are in wait-and-see mode.
The Fed's monetary policy meeting outcome on Wednesday is broadly expected to see it reassert its pledge to maintain ultra-loose policy until its goals on unemployment and inflation are met.
The Fed's accompanying statement will be closely examined for clues on the state of the coronavirus-ravaged US economy and the future path for borrowing costs.
The central bank's meetings are a crucial focus of investor interest as they continue to fret that the expected strong recovery will send prices soaring and force policymakers to raise the record low interest rates cementing a global rally.
US President Joe Biden, meanwhile, will make his first State of the Union address on Wednesday, in which he could unveil a $1.8 trillion American Families Plan that would provide national child care, paid family leave and free community college, paid for with higher taxes on the rich.
After Monday saw record high closes, Wall Street opened slightly off.
Apple case
Apple ceded 0.25 per cent as EU competition authorities were expected to imminently file formal accusations against the US company for unfairly squeezing out music streaming rivals, according to sources close to the case.
Separately, Russian regulators slapped a $12.1 million fine on Apple for "abusing" its dominant position in the market by giving preference to its own applications.
Tesla was down 2.8 per cent despite reporting record profits on a huge jump in revenues.
Shortly after the US opening, there was a glimmer of cheer after a survey showed US consumer confidence hitting a post-pandemic high.
Earlier, most Asian markets had swung in and out of positive territory with Tokyo, Hong Kong, Sydney, Seoul, Jakarta and Manila all in the red.
Major European markets all marked time, London off 0.2 per cent even as energy major BP rebounded into first-quarter profit on recovering oil prices while Frankfurt and Paris and also slipped into the red.
Google owner Alphabet and Microsoft will publish first quarter results on Tuesday while Apple, Amazon and Facebook will release their figures later this week.
"What looks like a holding pattern across most major stock markets seems set to continue," noted IG analyst Chris Beauchamp.
"It is another day of tech earnings, but until these arrive late this evening there is relatively little to go on, aside from further speculation about any tinkering with tomorrow's [Federal Reserve] statement."
Elsewhere, oil prices rose before Wednesday's key output meeting of OPEC and other major crude producers.
