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Upbeat Earnings News, Jobs Data May Generate Early Buying Interest

The major U.S. index futures are pointing to a higher opening on Wednesday, with stocks likely to see initial strength following the lackluster performance seen in the previous session.

Early buying interest may be generated in reaction to earnings news from big-name companies like Boeing (BA) and Apple (AAPL).

Shares of Boeing are moving significantly higher in pre-market trading after the aerospace giant reported better than expected fourth quarter results and provided upbeat guidance for full-year 2019.

Tech giant Apple also reported fiscal first quarter results that exceeded analyst estimates, including substantial growth in its services business.

Traders have also reacted positively to comments from Apple CEO Tim Cook, who expressed optimism about U.S.-China trade talks.

Stocks may also benefit from the release of a report from payroll processor ADP showing the pace of private sector job growth slowed in January but still far exceeded analyst estimates.

After ending Monday's trading significantly lower, stocks turned in lackluster performance during the trading day on Tuesday. The major averages eventually ended the session mixed.

While the Dow rose 51.74 points or 0.2 percent to 24,579.96, the Nasdaq slumped 57.39 points or 0.8 percent to 7,028.29 and the S&P 500 dipped 3.85 points or 0.2 percent to 2,640.00.

The choppy trading on Wall Street reflected a mixed reaction to earnings news from big-name companies such as 3M (MMM), Pfizer (PFE), and Verizon (VZ).

Traders also seemed reluctant to make more significant moves ahead of the release of quarterly results from tech giant Apple (AAPL) after the close of trading.

The Federal Reserve's impending monetary policy announcement on Wednesday also kept some traders on the sidelines along with the upcoming release of the Labor Department's monthly jobs report on Friday.

Traders also continued to express uncertainty about trade talks between the U.S. and China after the Justice Department unsealed sweeping criminal charges against Chinese tech giant Huawei and its chief financial officer Meng Wanzhou.

On the U.S. economic front, the Conference Board released a report showing a substantial deterioration in consumer confidence in the month of January.

The Conference Board said its consumer confidence index slumped to 120.2 in January after tumbling to a revised 126.6 in December.

Economists had expected the consumer confidence index to fall to 124.3 from the 128.1 originally reported for the previous month.

Lynn Franco, Senior Director of Economic Indicators at the Conference Board, noted expectations saw a significant drop due to financial market volatility and the government shutdown.

"Shock events such as government shutdowns (i.e. 2013) tend to have sharp, but temporary, impacts on consumer confidence," Franco said.

She added, "Thus, it appears that this month's decline is more the result of a temporary shock than a precursor to a significant slowdown in the coming months."

Most of the major sectors ended the day showing only modest moves, contributing to the lackluster performance by the broader markets.

Gold stocks saw substantial strength, however, with the NYSE Arca Gold Bugs Index surging up by 2.7 percent to a six-month closing high. The rally by gold stocks came amid a continued increase by the price of the precious metal.

Chemical, tobacco, and steel stocks also saw some strength on the day, while notable weakness among software and semiconductor stocks contributed to the drop by the tech-heavy Nasdaq.

Commodity, Currency Markets

Crude oil futures are advancing $0.68 to $53.99 a barrel after jumping $1.32 to $53.31 a barrel on Tuesday. Meanwhile, after climbing $5.80 to $1,308.90 an ounce in the previous session, gold futures are rising $1.80 to $1,310.70 an ounce.

On the currency front, the U.S. dollar is trading at 109.52 yen compared to the 109.40 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1428 compared to yesterday's $1.1433.

Asia

Asian stocks ended mixed on Wednesday as strong earnings from U.S. industrial giant 3M Co. as well as Apple CEO Tim Cook's comments about U.S.-China trade tensions helped investors put growth and trade worries on the back burner.

The dollar index dipped slightly ahead of the Federal Reserve's policy statement, while the British pound nursed losses after British lawmakers rejected most amendments that sought to avoid Britain leaving the European Union without a deal.

Oil prices edged higher on concerns about supply disruptions after the U.S. imposed sanctions on state-owned Venezuelan oil company PDVSA.

China's Shanghai Composite Index fell 18.68 points or 0.7 percent to 2,575.58 as investors awaited the conclusion of the Fed policy meeting and U.S.-China talks. Meanwhile, Hong Kong's Hang Seng Index rose 0.4 percent to 27,642.85.

Chinese Vice Premier Liu He is in Washington this week to meet with U.S. officials, including President Donald Trump.

Japanese shares fell on earnings concerns and after drugmaker Dainippon Sumitomo Pharma said a clinical trial for a new drug failed to complete. The Nikkei 225 Index dropped 108.10 points or 0.5 percent to 20,556.54, while the broader Topix closed 0.5 percent lower at 1,550.76.

Dainippon Sumitomo Pharma shares slumped 18.6 percent. Apple supplier Alps Alpine fell 3 percent despite Apple reporting sharp growth in its services business.

Akebono Brake Industry Co. plunged 18.2 percent despite the company announcing a turnaround plan.

On the data front, retail sales in Japan were up a seasonally adjusted 0.9 percent in December, a government report showed. That exceeded expectations for an increase of 0.4 percent following the downwardly revised 1.1 percent decline in November.

Australian stocks eked out modest gains as miners extended gains from the previous session on the back of strong iron ore and copper prices following a mining disaster in Brazil.

The benchmark S&P/ASX 200 Index rose 12.50 points or 0.2 percent to 5,886.70, while the broader All Ordinaries Index ended up 11.70 points or 0.2 percent at 5,951.20.

BHP Group rallied 2.6 percent and Rio Tinto soared 4.5 percent to hit multi-month highs, while smaller rival Fortescue Metals Group jumped 7.8 percent.

Energy stocks Woodside Petroleum, Oil Search and Santos climbed over 1 percent after oil prices gained more than 2 percent on Tuesday, supported by U.S. imposed sanctions on a Venezuelan state owned oil company.

Online furniture retailer Temple and Webster Group soared 11.2 percent after it reported a 40 percent surge in revenue for the first half of the year.

On the economic front, a government report showed that consumer prices in Australia rose 0.4 percent sequentially in the fourth quarter of 2018, unchanged from the third quarter and in line with expectations.

On a yearly basis, inflation advanced 1.8 percent, exceeding expectations for 1.7 percent but down from 1.9 percent in the three months prior.

Europe

European shares are mostly higher on Wednesday after Apple reported sharp growth in its services business and CEO Tim Took said U.S.-China trade tensions are easing.

Traders await the start of U.S.-China trade talks later in the day as well as the outcome of a Federal Reserve meeting for further direction.

The French CAC 40 Index is up by 0.7 percent and the U.K.'s FTSE 100 Index is up by 1.9 percent, although the German DAX Index has bucked the uptrend and fallen by 0.4 percent.

French luxury conglomerate LVMH has jumped after reporting record sales and profits for 2018. Gucci owner Kering has also rallied.

IT consulting firm Atos has also moved sharply higher. The company plans to distribute 23.4 percent of shares in its subsidiary Worldline to shareholders.

British American Tobacco have also jumped to extend gains from the previous session as fears over a menthol cigarette crackdown in the U.S. have receded.

Meanwhile, German industrial conglomerate Siemens has fallen after its first quarter net income dropped to 1.01 billion euros from 2.19 billion euros last year.

Drug maker Novartis has also moved to the downside in Switzerland after its core earnings came in below expectations.

In economic news, an index of Eurozone economic sentiment fell by more than expected to a two-year low at the start of 2019, the European Commission said.

German consumer confidence is set to improve in February, defying expectations for a modest easing, survey data from the GfK showed.

French GDP grew 0.3 percent sequentially in the fourth quarter of 2018, the same as in the third quarter, preliminary data revealed. Economists had forecast a 0.2 percent expansion.

U.S. Economic Reports

After reporting a substantial increase in U.S. private sector employment in the previous month, payroll processor ADP released a report showing the pace of job growth slowed in January but still far exceeded analyst estimates.

ADP said private sector employment jumped by 213,000 jobs in January after soaring by a downwardly revised 263,000 jobs in December.

Economists had expected employment to increase by about 178,000 jobs compared to the spike of 271,000 jobs originally reported for the previous month.

At 10 am ET, the National Association of Realtors is due to release its report on pending home sales in the month of December. Pending home sales are expected to rise by 0.5 percent in December after falling by 0.7 percent in November.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

The Energy Information Administration is scheduled to release its report on oil inventories in the week ended January 25th at 10:30 am ET.

Crude oil inventories are expected to increase by 3.0 million barrels after surging up by 8.0 million barrels in the previous week.

At 2 pm ET, the Federal Reserve is due to announce its latest monetary policy decision, followed by a press conference by Fed Chairman Jerome Powell at 2:30 pm ET.

Stocks In Focus

Shares of Juniper Networks (JNPR) are moving sharply lower in pre-market trading after the networking equipment maker reported weaker than expected fourth quarter revenue and forecast lower first quarter sales due to continued weakness with cloud customers.

Align Technology (ALGN) is also likely to come under pressure after the maker of the Invisalign tooth-straightening system reported fourth quarter results that exceeded estimates but provided disappointing guidance.

Shares of Amgen (AMGN) may also see initial weakness after the biotechnology company reported better than expected fourth quarter results but forecast full-year 2019 earnings well below analyst estimates.

On the other hand, shares of Advanced Micro Devices (AMD) are seeing significant pre-market strength after the chip maker reported mixed fourth quarter results but President and CEO Lisa Su said she expects strong sales growth in 2019.

Health insurer Anthem (ANTM) is also likely to move to the upside after reporting better than expected fourth quarter earnings and providing upbeat full-year 2019 guidance.

Shares of Stryker (SYK) are also moving sharply higher in pre-market trading after the medical device maker reported fourth quarter results that beat analyst estimates on both the top and bottom lines.

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