Wednesday December 2nd


Futures hold mixed amid data; Yellen eyed

U.S. stock index futures pointed to a mixed open on Wednesday, ahead of a speech held by Federal Reserve Chair Janet Yellen and amid some key data releases, following a strong close in the previous session. ADP data showed November private payrolls topped expectations at 217,000, above the roughly 190,000 estimate. That compares with expectations of 200,000 for Friday's November government jobs report. Treasury yields rose, with the 2-year yield briefly trading near 0.95 percent, while the 10-year yield edged higher to 2.17 percent. The U.S. dollar index attempted to recover from Tuesday's dip to trade just below multi-month highs. The euro fell back below $1.06, while the yen traded near 123.38 yen against the dollar as of 9 a.m. Appearances by Yellen both Wednesday and Thursday could be critical in setting market expectations about the course of Fed rate hikes.Also looming large is Friday's jobs report, the last big piece of data ahead of the Fed's December 16 meeting. Yellen is scheduled to speak at the Economics Club of Washington on Wednesday at 12:25 p.m. ET and then testifies the next morning before the Congressional Joint Economic Committee. Revised third-quarter productivity rose 2.2 percent, while unit labor costs rose 1.8 percent. The Fed's beige book on the economy is due at 2 p.m. The shockingly weak November ISM manufacturing survey Tuesday showed a contraction in the manufacturing sector for the first time in three years. The reading was the latest piece of softish data that raises doubts about the Fed's plan to raise rates in December, if the economy is strong enough. European equities traded mixed Wednesday with investors digesting the latest downbeat data from the U.S. and looking ahead to euro zone inflation data and the next meeting of the European Central Bank (ECB). U.S. stocks closed near session highs Tuesday, the first trading day of December, shaking off intraday pressure from the weak manufacturing data. Over the last 10 years, the S&P 500 was up 70 percent of the time in December with an average return of 1.27 percent, according to analysis using Kensho. Chinese markets rallied Wednesday on speculation that Beijing was about to announce a new incentive to boost the country's sagging property market. Elsewhere, Asian equities ended lower on Wednesday as sentiment remained shaky in the region, with investors awaiting more regional data, as well as the key November non-farm payroll number from the U.S. on Friday. The Shanghai Composite closed 80 points, or 2.3 percent, higher at 3,537, boosted by a surge in blue-chip shares; the smaller Shenzhen Composite and tech-heavy Chinext saw losses of 0.4 and 2 percent, respectively, while the blue-chip heavy CSI 300 Index was up 3.61 percent. Japan's equity market could not maintain the previous day's momentum. The Nikkei 225 index slipped 74 points, or 0.37 percent, falling under the 20,000 benchmark. Oil prices fell on Wednesday as a rise in U.S. inventories added to a deep global glut, while investors discounted any possibility of the Organization of the Petroleum Exporting Countries (OPEC) would do anything to cut production at this week's meeting. Brent crude was down 66 cents at $43.78 a barrel by 8:48 a.m. EDT (1348 GMT), falling for a fifth consecutive session. It dropped as low as $43.90, its weakest level since Nov. 23, and was on track for its lowest close in two weeks. U.S. crude was trading 78 cents lower at $41.07 a barrel. Gold retreated on Wednesday, snapping two days of gains, as the dollar rose against the euro ahead of expected further stimulus from the European Central Bank on Thursday, and U.S. payrolls data later in the week. Prices hit near six-year lows last week, weighed down by expectations that the Federal Reserve will hike interest rates for the first time in nearly a decade this month, even as the ECB eases policy further. Spot gold was down 0.25 percent at $1,066.37 an ounce.