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U.S. Stocks May Continue To Experience Choppy Trading

wallstreet aug22 30nov22 lt

Stocks may show a lack of direction in early trading on Wednesday, extending the lackluster performance seen in the previous session. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures up by less than a tenth of a percent.

Traders may be reluctant to make significant remarks ahead of a speech by Federal Reserve Chair Jerome Powell later this afternoon.

Powell's remarks at a hybrid Brookings Institution event are likely to closely watched for additional clues about the outlook for interest rates.

While the central bank is widely expected to slow the pace of rate hikes next month, recent comments from Fed officials have led to uncertainty about how high rates will go.

Traders are also digesting mixed economic data, which has added some uncertainty about the outlook for rates.

Payroll processor ADP released a report showing private sector job growth in the U.S. fell well short of economist estimates in the month of November.

ADP said private sector employment increased by 127,000 jobs in November after surging by an unrevised 239,000 jobs in October. Economists had expected employment to jump by another 200,000 jobs.

"Turning points can be hard to capture in the labor market, but our data suggest that Federal Reserve tightening is having an impact on job creation and pay gains," said ADP chief economist Nela Richardson.

Meanwhile, revised data released by the Commerce Department showed the U.S. economy grew by more than previously estimated in the third quarter.

The report said real gross domestic product spiked by 2.9 percent in the third quarter compared to the previously reported 2.6 percent surge. Economists had expected the pace of GDP growth to be unrevised.

Just after the start of trading, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of November.

The Chicago business barometer is expected to inch up to 47.0 in November from 45.2 in October, although a reading below 50 would still indicate a contraction.

The National Association of Realtors is also due to release its report on pending home sales in the month of October. Pending home sales are expected to tumble by 5.2 percent in October after plunging by 10.2 percent in September.

Later in the day, the Fed is scheduled to release its Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts.

Following the sell-off seen to start the week, stocks fluctuated over the course of the trading day on Tuesday. The Dow eventually ended the session nearly unchanged, while the Nasdaq and S&P 500 closed lower for the third straight session.

The Dow spent the day bouncing back and forth across the unchanged line before closing up 3.07 points or less than a tenth of a percent to 33,852.53. Meanwhile, the S&P 500 edged down 6.31 points or 0.2 percent to 10,983.78 and the Nasdaq slid 65.72 points or 0.6 percent to 10,983.78.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday. China's Shanghai Composite Index inched up by 0.1 percent and Hong Kong's Hang Seng Index surged by 2.2 percent, although Japan's Nikkei 225 Index once again bucked the uptrend and dipped by 0.2 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has risen by 0.3 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are up by 0.8 percent and 0.9 percent, respectively.

In commodities trading, crude oil futures are surging $2.50 to $80.70 a barrel after climbing $0.96 to $78.20 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,774.80, up $11.10 compared to the previous session's close of $1,763.70. On Tuesday, gold rose $8.40.

On the currency front, the U.S. dollar is trading at 139.08 yen compared to the 138.63 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0375 compared to yesterday's $1.0330.

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