U.S. Futures Largely Unchanged; Fed Minutes in Focus By

© Reuters

By Peter Nurse   

- U.S. stocks are Futures company rankingseen opening largely unchanged Wednesday, stabilizing just below record levels ahead of the release of the keenly-awaited minutes of the December Federal Reserve meeting.

At 7:10 AM ET (1210 GMT), the Dow Futures contract was up 5 points, or less than 0.1%, S&P 500 Futures traded 2 points, or less than 0.1%, lower and Nasdaq 100 Futures dropped 50 points, or 0.3%.

The blue chip Dow Jones Industrial Average closed over 200 points, or 0.6%, higher on Tuesday, while Nasdaq Composite dropped 1.3% as higher U.S. Treasury yields prompted a rotation out of growth-sensitive stocks, such as tech firms, into ones that offer income, such as financials.

The move by the Federal Reserve, at its December meeting, to accelerate the winding up of its bond-buying program, coupled with strong economic data since, has led investors to look for the central bank to begin hiking interest rates earlier this year.

Fed Funds futures suggest interest rates will start rising by May, but investors will look to the release of the minutes of the December Fed meeting for further clues to the central bank’s timetable for rate hikes. A Wall Street Journal report earlier this week also suggested that the Fed will start to look at unwinding some of the trillions of dollars of bond purchases it has made in the last 12 years.

Also due for release Wednesday will be the ADP employment data, a closely watched precursor to Friday’s nonfarm payrolls.

Turning to the corporate sector, the likes of Alibaba (NYSE:BABA), Tencent Holdings (OTC:TCEHY) and Bilibili (NASDAQ:BILI) are likely to be in focus Wednesday after China’s markets regulator fined units of the Chinese tech giants for failing to properly report about a dozen deals. 

Beyond Meat (NASDAQ:BYND) will also be in the spotlight on the news that Yum! Brands-owned KFC will be selling its plant-based fried chicken at U.S. restaurants, while private equity giant Carlyle Group (NASDAQ:CG) bought a 10% stake in logistics company Hyundai Glovis for just over $500 million. 

Oil prices stabilized Wednesday as traders digested a mixed report for U.S. petroleum stockpiles at the same time as a group of top producers persevered with their plans to raise global output.

Data from the American Petroleum Institute, released on Tuesday, showed a draw of 6.4 million barrels of crude for the week ended Dec. 31, significantly more than expected, while gasoline inventories rose by a hefty 7.1 million barrels.

U.S. crude oil supply data from the U.S. Energy Information Administration are due later Wednesday.

Earlier Tuesday, the Organization of the Petroleum Exporting Countries and allies, a group called OPEC+, decided to stick to its plan of increasing output by 400,000 barrels per day in February, suggesting confidence that overall demand wouldn’t be hit too badly by the fresh Covid outbreak.

By 7:10 AM ET, U.S. crude futures traded 0.4% higher at $77.29 a barrel, while the Brent contract rose 0.4% to $80.35. 

Additionally, gold futures rose 0.2% to $1,818.65/oz, while EUR/USD traded 0.3% higher at 1.1317.

 

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