Stocks are likely to move to the upside in early trading on Wednesday, extending the rollercoaster ride seen over the past few sessions. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 289 points.
The upward momentum on Wall Street comes after stocks moved sharply lower over the course of the previous session, with the Dow and the S&P 500 slumping to their lowest closing levels in at least a month.
The sharp pullback on Tuesday came following a strong upward move on Monday, which in turn followed the sell-off seen last Friday.
The recent volatility on Wall Street comes as traders have been reacting to the latest news about the Omicron variant of the coronavirus.
While news of the detection of the variant contributed to the steep drop last Friday, indications the symptoms of the variant were “extremely mild” contributed to the rebound on Monday.
However, comments from Covid-related drugmakers suggesting vaccines and treatments are less effective against Omicron contributed to yesterday’s pullback.
Traders are also likely to keep an eye on Federal Reserve Chair Fed Jerome Powell’s second day of Congressional testimony after he suggested yesterday that the central bank may accelerate the tapering of its bond purchases.
Powell is due to testify before a House Financial Services Committee hybrid hearing, although his prepared remarks will mirror those he delivered to the Senate Banking Committee on Tuesday.
On the U.S. economic front, a report released by payroll processor ADP showed private sector employment increased by slightly more than expected in the month of November.
ADP said private sector employment shot up by 534,000 jobs in November after surging by a revised 570,000 jobs in October.
Economists had expected private sector employment to jump by about 525,000 jobs compared to the addition of 571,000 jobs originally reported for the previous month.
ADP chief economist Nela Richardson noted, “It’s too early to tell if the Omicron variant could potentially slow the jobs recovery in coming months.”
Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of November.
The ISM’s manufacturing PMI is expected to inch up to 61.0 in November from 60.8 in October, with a reading above 50 indicating growth in the sector.
The Commerce Department is also due to release its report no construction spending in the month of October. Construction spending is expected to increase by 0.4 percent.
Later in the day, the Federal Reserve is scheduled to release its Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts.
Stocks moved sharply lower during trading on Tuesday, largely offsetting the notable rebound seen on Monday. With the steep drop on the day, the Dow and the S&P 500 fell to their lowest closing levels in at least a month.
The major averages saw continued weakness going into the close of trading. The Dow plunged 652.22 points or 1.9 percent to 34,483.72, the Nasdaq slumped 245.14 points or 1.6 percent to 15,537.69 and the S&P 500 tumbled 88.27 points or 1.9 percent to 4,567.00.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 255 Index and China’s Shanghai Composite Index both rose by 0.4 percent, while South Korea’s Kospi spiked by 2.1 percent.
The major European markets have also moved to the upside on the day. While the U.K.’s FTSE 100 Index has jumped by 1.3 percent, the German DAX Index and the French CAC 40 Index are up by 1.8 percent and 1.9 percent, respectively.
In commodities trading, crude oil futures are surging $1.93 to $68.11 a barrel after plunging $3.77 to $66.18 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,792.30, up $15.80 compared to the previous session’s close of $1,776.50. On Tuesday, gold fell $8.70.
On the currency front, the U.S. dollar is trading at 113.19 yen compared to the 113.17 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1330 compared to yesterday’s $1.1338.
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