European markets slip with Fed, earnings in focus; Deutsche Bank up 6% – CNBC

LONDON — European stocks were slightly lower on Wednesday morning as global markets await comments from the U.S. Federal Reserve.

The pan-European Stoxx 600 dropped 0.25% in early trade, with travel and leisure stocks shedding 1.1% while insurance stocks gained 0.7%. Despite modest gains for British, French and German shares, many of the continent’s indexes slid into negative territory by mid-morning.

European investors are digesting a slew of earnings reports from Deutsche Bank, Sanofi, Dassault Systemes, Banco Santander, Spotify, French Connection, GlaxoSmithKline and Lloyds Banking Group, among others.

Deutsche Bank reported a 908 million euro ($1.1 billion) profit for the first quarter, its strongest quarterly profit for seven years, buoyed by continued strong performance in its investment banking division.

The German lender’s shares surged 6.6% to lead the Stoxx 600 in early trade, while Lloyds added 3.3% after also beating earnings expectations.

At the bottom of the index, Travis Perkins shares plunged 8.6% after the British builders’ retailer completed its demerger from subsidiary Wickes.

Also in focus will be the latest decision from the U.S. Federal Reserve, which is due to be announced later in the day. U.S. stock futures were flat in overnight trading on Tuesday as investors digested major technology earnings and geared up for the latest Federal Reserve policy announcement.

The Fed wraps up its two-day policy meeting on Wednesday. The central bank is not expected to take any action, but economists expect it to defend its policy to let inflation run hot. Fed Chairman Jerome Powell will hold a press conference at 2:30 p.m. ET, 30 minutes after the decision is announced.

Investors will also be watching technology darlings Apple and Facebook which will report earnings on Wednesday after the bell.

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-CNBC’s Maggie Fitzgerald contributed reporting to this story.