Wednesday November 4th


Futures higher amid Fed, data dump

U.S. stock index futures pointed to a higher open Wednesday, ahead of the bulk of the day's comments from Federal Reserve policymakers and economic data. With two days to Friday's nonfarm payrolls report, the ADP employment report showed private companies added 182,000 jobs in October. September's trade deficit came in at $40.8 billion, its lowest level in seven months, Reuters reported. Stock index futures held earlier gains after the data releases, with the Dow futures up about 50 points. Treasury yields traded little changed from Tuesday's levels, with the 10-year at 2.21 percent and the 2-year at 0.77 percent as of 8:31 a.m. The U.S. dollar traded higher against major world currencies, with the euro near $1.091 and the yen at 121.32 yen agains the greenback. The PMI services index is scheduled for release at 9:45 a.m. and non-manufacturing ISM at 10 a.m. Investors will also scrutinize remarks from Fed speakers throughout the day for any clues on the timing of a rate hike. Fed Chair Janet Yellen testifies before the House Financial Services Committee on bank regulation and supervision at 10 a.m. EST. In the afternoon, New York Fed President William Dudley is scheduled to give a news briefing on looking beyond the macro economy. Fed Vice Chair Stanley Fischer speaks at 7:30 p.m. on central bank independence at the National Economists Club. Before the open, Fed Gov. Lael Brainard spoke in Frankfurt, saying the Fed is "very dependent" on incoming data, but that there have been some tightening of economic conditions. Philadelphia Fed President Patrick Harker is scheduled to speak at 8:45 a.m. In other economic news, weekly mortgage applications fell 0.8 percent last week as interest rates rose. Earnings season has also not yet run out of steam, with reports from 21st Century Fox, Time Warner, Michael Kors, Motorola Solutions, Regeneron, 3-D Systems, Lumber Liquidators, OM Asset Management, Shopify, SodaStream, Virtu Financial and Wendy's before the open. Facebook, Qualcomm, Whole Foods, FireEye, GoDaddy, HubSpot, Sturm Ruger are amongst the host of firms reporting after the bell. U.S. stocks have added to the strong gains seen in November so far, with a higher close on Tuesday. The indexes did fall off session highs but more than recovered from an opening dip. The Nasdaq 100 ended up 0.32 percent at an all-time closing high of 4,719.05 points, topping the previous record set during the dot-com bubble in 2000. In Europe, stocks were trading higher Wednesday with sentiment lifted by the rally in U.S. and Asian markets. German carmaker Volkswagen pared losses after earlier falling 7 percent after the group said on Tuesday it had uncovered "inconsistencies" when determining CO2 emission levels which could affect around 800,000 cars. Elsewhere, miner and commodity trader Glencore topped benchmarks, trading up over 5 percent after the firm said it was on track to reduce its debt and boost liquidity thanks to asset sales. Asian stocks rose sharply on Wednesday, as a confluence of factors including a stellar market debut from Japan Post's units in Tokyo and positive Chinese data fueled risk appetite in the region. Nikkei up 1.3%. Japan's Nikkei 225 index was one of the biggest gainers in Asia on Wednesday, thanks to a strong market debut by Japan Post Holdings and its two financial units. Oil prices held above $50 a barrel on Wednesday following a 3 percent jump a day earlier on the back of Brazilian and Libyan supply worries, a U.S. pipeline outage and a general rally in riskier assets on hopes of more economic stimulus measures. Brent for December delivery traded fell 30 cents at $50.24 by 9 a.m. EDT (1300 GMT), after ending the last session $1.75, or 3.6 percent, higher. U.S. crude fell 19 cents to $47.71 after settling up $1.76, or 3.8 percent, on Tuesday. Gold steadied near one-month lows on Wednesday as the previous day's slide tempted some price-sensitive buyers back to the market, but it remained under pressure from a rising dollar and talk of a near-term rise in U.S. interest rates. Prices dropped more than 1.4 percent on Tuesday, their biggest one-day fall in 3-1/2 months, to touch their lowest since early October at $1,114.10 an ounce. Spot gold was up 0.1 percent at $1,118.53 an ounce, little changed from $1,117.21 late on Tuesday, while U.S. gold futures for December delivery were up $4.10 an ounce at $1,118.20.