After starting the New Year off on a negative note, stocks may move to the upside in early trading on Wednesday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.6 percent.
Wall Street may benefit from strength in overseas markets, which moved higher following encouraging European inflation data and indications the latest Covid wave in China may have peaked.
Traders may also once again look to pick up stocks at reduced levels following the significant weakness seen last year.
Early trading activity may be somewhat subdued, however, as traders look ahead to the minutes of the latest Federal Reserve meeting.
The minutes of the Fed’s December meeting, which are due to be released this afternoon, could shed additional light on the outlook for interest rates.
Not long after the start of trading, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of December.
The ISM’s manufacturing PMI is expected to edge down to 48.5 in December from 49.0 in November, with a reading below 50 indicating a contraction.
Stocks finished Tuesday’s trading mostly lower, starting the New Year off on a negative note. The major averages saw initial strength but came under pressure over the course of morning trading.
The major averages climbed well off their worst levels late in the session but remained in negative territory. The Dow edged down 10.88 points or less than a tenth of a percent to 33,136.37, the Nasdaq slid 79.50 points or 0.8 percent to 10,386.98 and the S&P 500 fell 15.36 points or 0.4 percent to 3,824.14.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher, although Japanese stocks bucked the uptrend. While Japan’s Nikkei 225 Index slumped by 1.5 percent, Hong Kong’s Hang Seng Index spiked by 3.2 percent and South Korea’s Kospi jumped by 1.7 percent.
The major European markets have also moved to the upside on the day. While the U.K.’s FTSE 100 Index has risen by 0.4 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 tumbling $1.91 to $75.02 a barrel after plunging $3.33 to $76.93 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,865.20, up $19.10 compared to the previous session’s close of $1,846.10. On Tuesday, gold jumped $19.90.
On the currency front, the U.S. dollar is trading at 130.62 yen compared to the 131.02 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0613 compared to yesterday’s $1.0548.
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