Chip Somodevilla
Stock index futures remained non-committal Wednesday with employment data coming early and Fed chief Jay Powell up later.
The Nasdaq 100 futures (NDX:IND) were +0.1%, and Dow futures (INDU) and S&P futures (SPX) remained flat.
“The period from Thanksgiving into yearend is strong and favors a yearend rally,” BofA technical strategist Stephen Suttmeier said. “From the closing price of the day before Thanksgiving through the last day of the year, the SPX is up 71% of the time with an average return of 1.49% (1.70% median). Within this period, Christmas Eve through New Year’s Eve is up a greater percentage of the time than Thanksgiving through Christmas Eve, which reflects the Santa Claus rally.”
The 10-year Treasury yield (US10Y) was down 1 basis point to 3.74%. The 2-year yield (US2Y) was up 3 basis points to 4.48%.
Powell will speak and answer moderated questions at the Hutchins Center on Fiscal and Monetary Policy at 1:30 PM ET.
“Powell has yet to explain the mechanism by which hiking rates is supposed to reduce inflation (which matters to analyzing when rates might peak),” UBS’ Paul Donovan wrote. “Today’s speech should signal a slowing of rate hikes, but Brainard and Williams of the Fed have already signaled that.”
The Fed’s Beige Book report on regional economic activity arrives shortly afterwards.
Investors also get some insight into the labor market before the jobs report Friday.
Most important to Powell will be the October JOLTS report, out after the open, with the Fed chairman pointing to job openings specifically as a gauge of labor market tightness. Openings are forecast to drop to 10.3M.
ADP jobs report shows that 127K jobs were added in November, lower than the expected 200K.
“ADP argues that they are not in the business of predicting the official data, but they protest too much,” Pantheon Macro’s Ian Shepherdson, who predicts a 250K in official payrolls, said. “Their numbers appear two days before the BLS report so it’s inevitable that markets will seek to use the information as a guide.”
“The problem here is that we just don’t know how reliable ADP’s data are, because they have not published the real-time historical data using their new method, introduced a few months ago.”
Also revised Q3 GDP figures came in at 2.9%, above the forecasted 2.7%.
The Chicago PMI arrives right after the opening bell. A rise to 47 is expected.
Among active stocks, Disney is up slightly despite the possibility of impairment charges due to Bob Iger’s restructuring. And CrowdStrike is tumbling after it missed estimates.
Image and article originally from seekingalpha.com. Read the original article here.