With the Federal Reserve’s monetary policy announcement looming, traders may be reluctant to make significant moves in early trading on Wednesday. The major averages index futures are currently pointing to a narrowly mixed open for the markets.
Traders may stick to the sidelines as they await the Fed’s latest monetary policy decision, which is due to be announced at 2 pm ET.
The Fed is expected to announce plans to begin gradually scaling back its $120 billion in monthly bond purchases by mid-November or December.
Since tapering is widely expected, traders may pay closer attention to the language of the accompanying statement as they look for clues about the outlook for interest rates.
Traders are also likely to keep an eye on the post-meeting press conference by Fed Chair Jerome Powell, which is set for 2:30 pm ET.
Meanwhile, the futures have not shown much reaction to a report from payroll processor ADP released showing private sector employment in the U.S. increased by more than expected in the month of October.
ADP said private sector employment jumped by 571,000 jobs in October after surging by a revised 523,000 jobs in September.
Economists had expected private sector employment to climb by 400,000 jobs compared to the addition of 568,000 jobs originally reported for the previous month.
“The job market is revving back up as the Delta-wave of the pandemic winds down,” said Mark Zandi, chief economist of Moody’s Analytics.
“Job gains are accelerating across all industries, and especially among large companies,” he added. “As long as the pandemic remains contained, more big job gains are likely in coming months.”
On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report, which includes both public and private sector jobs.
Economists currently expect employment to jump by 425,000 jobs in October after rising by 194,000 jobs in September, while the unemployment rate is expected to edge down to 4.7 percent from 4.8 percent.
Not long after the start of trading, the Institute for Supply Management is scheduled to release its report on activity in the service sector in the month of October.
The ISM’s services PMI is expected to inch up to 62.0 in October from 61.9 in September, with a reading above 50 indicating growth in the sector.
The Commerce Department is also due to release its report on new orders for manufactured goods in the month of September. Factory orders are expected to edge down by 0.1 percent.
Stocks moved mostly higher over the course of the trading day on Tuesday, with the major averages once again reaching new record closing highs. The continued strength on the day came even as traders looked ahead to the Fed’s monetary policy announcement.
The major averages all finished the day moderately higher. The Dow advanced 138.79 points or 0.4 percent to 36,052.63, the Nasdaq rose 53.69 points or 0.3 percent to 15,649.60 and the S&P 500 climbed 16.98 points or 0.4 percent to 4,630.65.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance, with the Japanese markets closed for a holiday. China’s Shanghai Composite Index dipped by 0.2 percent, while Australia’s S&P/ASX 200 Index advanced by 0.9 percent.
The major European markets have also turned mixed on the day. While the French CAC 40 Index is up by 0.1 percent, the German DAX Index is just below the unchanged line and the U.K.’s FTSE 100 Index is down by 0.4 percent.
In commodities trading, crude oil futures are plunging $1.95 to $81.96 a barrel after edging down $0.14 to $83.91 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,786.60, down $2.80 compared to the previous session’s close of $1,789.40. On Tuesday, gold fell $6.40.
On the currency front, the U.S. dollar is trading at 113.83 yen compared to the 113.96 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1586 compared to yesterday’s $1.1579.
Business News
Futures Little Changed As Traders Look Ahead To Fed Decision
2021-11-03 12:56:31
