US STOCK-FUTURES muted as Fed minutes signal tightening in the coming months.
U.S. stock index futures were a bit sluggish on Thursday following the minutes of the December meeting of the Federal Reserve revealed the central bank’s dedication to control inflation. Now, the focus is shifting to employment figures to get more information on the direction of rate hikes.
The main indexes of Wall Street have erased some gains on Wednesday following a meeting minutes revealed the Fed was focused on tackling inflation, even as officials voted to slow down the rate hike rate to minimize risk in economic development.
“The meeting minutes suggested ‘more evidence’ is needed to confirm inflation is under control,” said Victoria Scholar, head of investment at Interactive Investor.
“Consequently, the Fed is expected to continue raising interest rates, with hawkish policy a continued headwind for equities into 2023.”
Market participants are now anticipating an 60.5 percent possibility of a 25 basis point rate increase to 4.50%-4.75 percent in February, however they still expect rates reaching at or below 5% in June.
US STOCKS-Futures muted as Fed minutes confirm more tightening ahead https://t.co/5fUNbPEZEg
— Devdiscourse (@Dev_Discourse) January 5, 2023
Investors will keep an eye on the latest jobs data that is due prior to the bell ringing and include reports from the ADP National Employment report, expected to reveal that the private sector added job openings in the month of December than it did a month earlier.
The news comes just a day after reports of a mild decline on U.S. job openings, suggesting a tight labor market.
The more complete nonfarm payrolls data is due on Friday, and investors expecting to see evidence of a cooling labour market, which could provide the Fed an incentive to ease the pace of its tightening of monetary policy.
In the morning, at 06:03 a.m. ET Dow Eminis were trading up by 13 points or 0.04 percent. S&P 500 e-minis had risen 3.25 points and 0.08%. 0.08 percent as well as Nasdaq 100 eminis were up 13.5 points which is 0.12 percent.
The shares of Amazon.com Inc jumped 2.8% in premarket trading following the company’s chief executive Andy Jassy said layoffs will be increased to over 18,000 jobs in a work force reduction that it had previously announced.