US pre-open: Wall Street set for a mixed start ahead of ADP report, FOMC minutes
Wall Street looks primed for a mixed start to trading on Wednesday as traders bid their time ahead of the release of consultancy ADP's private sector payrolls report for December and hoping for some clues as to whether the advent of Omicron had dragged on hiring towards the end of the month.
The ADP report and the minutes of the Federal Open Market Committee's last policy meeting, which were due out later in the day, would help inform opinions regarding the outlook for interest rate hikes in the US, expectations for which hit technology issues during the previous session.
"Seemingly, the sharp rise in US yields this week has sparked a move from growth to value, or as I put it, from the Nasdaq to the Dow Jones," said Jeffrey Halley, senior market analyst at Oanda.
"Whether it lasts is another thing altogether, with such rotations running out of steam over the past 18 months, without really ever gathering momentum. Still, a couple of things are “different this time,” namely the omicron variant is rapidly being repriced as omi-gone. Secondly, the Federal Reserve has commenced tapering its QE and will likely start hiking soon after the mid-year."
Against that backdrop, futures tracking the Dow Jones Industrials were slipping by 6,0 points to 36,669.0, alongside a 4.5 point dip for those linked to the S&P 500 to 4,779.75.
Nasdaq-100 futures meanwhile were trading off by 61.75 points at 16,214.0.
Benchmark 10-year US Treasury note yields were flat at 1.653% while front-dated West Texas Intermediate crude oil futures were up by 0.338% to $77.25 a barrel on the NYMEX.
The ADP report, which would precede the release of the Department of Labor's own non-farm payrolls report on Friday, was due to be published at 1315 GMT.
The FOMC meeting minutes would follow at 1900 GMT.
According to economists at Barclays Research, the minutes would show that a majority of the Fed´s top officials agreed that the factors driving inflation higher were not transitory.
The minutes were also expected to show that discussions had already begun around the topic of when to start running down the central bank's balance sheet, although not much more given that they remained at a "very early" stage.