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Futures Pointing To Roughly Flat Open On Wall Street

wallstreet oct19 17feb21 lt

After ending the previous session mixed, stocks may continue to experience choppy trading early on Wednesday. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures up by just 6 points.

Traders may be reluctant to may significant moves amid uncertainty about the near-term outlook for the markets amid a jump in bond yields.

The yield on the benchmark ten-year note has risen to its highest levels in almost a year, raising concerns about potential inflation risks.

The ten-year yield has seen further upside following the release of a report from the Commerce Department showing retail sales rebounded by much more than anticipated in the month of January.

The Commerce Department said retail sales spiked by 5.3 percent in January after sliding by a revised 1.0 percent in December.

Economists had expected retail sales to jump by 1.1 percent compared to the 0.7 percent decrease originally reported for the previous month.

Excluding sales by motor vehicle and parts retailers, retail sales soared by 5.9 percent in January after tumbling by a revised 1.8 percent in December.

Economists had expected ex-auto sales to increase by 1.0 percent compared to the 1.4 percent slump originally reported for the previous month.

Potentially adding to inflation concerns, a separate report from the Labor Department showed producer prices jumped by much more than expected in the month of January.

The Labor Department said its producer price index for final demand surged up by 1.3 percent in January after rising by 0.3 percent in December. Economists had expected producer prices to increase by 0.4 percent.

Excluding food and energy prices, core producer prices still shot up by 1.2 percent in January after inching up by 0.1 percent in December. Core prices were expected to edge up by 0.2 percent.

Nonetheless, the Dow may benefit from advances by shares of Chevron (CVX) and Verizon (VZ), which are moving notably higher in pre-market trading after Warren Buffett's Berkshire Hathaway revealed increased stakes in the blue chip stocks.

Just before the start of trading, the Federal Reserve is scheduled to release its report on industrial production in the month of January.

Economists expected industrial production to rise by 0.4 percent in January after jumping by 1.6 percent in December.

Shortly after the open, the National Association of Home Builders is due to release its report on homebuilder confidence in the month of February. The housing market index is expected to come in unchanged at 83.

The Commerce Department is also scheduled to releases its report on business inventories in the month of December. Business inventories are expected to increase by 0.5 percent.

Later in the day, the Federal Reserve is due to release the minutes of its latest monetary policy meeting held January 26-27.

After climbing to new record intraday highs early in the session, stocks turned mixed over the course of the trading day on Tuesday. The Dow managed to hold onto a modest gain, while the broader Nasdaq and the S&P 500 slid into negative territory.

While the Dow crept up 64.35 points or 0.2 percent to a new record closing high of 31,522.75, the Nasdaq fell 47.98 points or 0.3 percent to 14,047.50 and the S&P 500 edged down 2.24 points or 0.1 percent to 3,932.59.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index slid by 0.6 percent, while Hong Kong's Hang Seng Index jumped by 1.1 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the German DAX Index has fallen by 0.5 percent, the U.K.'s FTSE 100 Index is down by 0.2 percent and the French CAC 40 Index is down by 0.1 percent.

In commodities trading, crude oil futures are advancing $0.86 to $60.91 a barrel after climbing $0.58 to $60.05 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,778.50, down $20.50 compared to the previous session's close of $1,799. On Tuesday, gold tumbled $24.20.

On the currency front, the U.S. dollar is trading at 106.17 yen compared to the 106.04 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.2035 compared to yesterday's $1.2106.

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