February 5, 2023

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Equity futures held steady as investors digest Fed meeting minutes, look at employment data

Equity futures held steady as investors digest Fed meeting minutes, look at employment data

Traders work on the floor of the New York Stock Exchange (NYSE) on November 11, 2022 in New York City.

Spencer Platt | Getty Images

Stock futures were flat early Thursday morning as investors looked beyond the Fed’s hawkishness in the afternoon minutes to the employment data to be released later this week.

Futures linked to the Dow Jones Industrial Average lost 34 points, down about 0.1%. S&P 500 and Nasdaq 100 futures were down 0.1% and 0.18%.

Moves follow a Intermittent trading session. Markets were lower early in the day on a mixed bag of economic data, but stocks rallied until the closing bell. The Dow Jones ended the day up 133 points, or 0.4%, while the S&P 500 and Nasdaq added 0.8% and 0.7%, respectively.

The November Job Openings and Employment Turnover, or JOLTS, report showed that the labor market remained strong, reinforcing concerns that the Federal Reserve may continue to raise interest rates as long as there remains a hot market for workers. But the ISM manufacturing index showed the sector contracting after 30 months of expansion, which investors took as a positive sign that previous rate hikes had the intended effect of cooling the economy.

Stocks were trading mainly in the afternoon. But they gave up some of their gains after the minutes of the Fed’s December meeting were released, which showed the central bank staying put committed to raising interest rates “for a while”.

Keith Buchanan, a portfolio manager at Global Investments, said investors are suffering from “fresh wounds” after 2022, which brought in the worst year for the stock market since 2008. He said investors are trying to weigh what each new piece of economic data could indicate. Or a Fed suspension with broader concerns about the future.

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“Every day that goes by and we get a data point moving in the right direction, it’s a positive,” Buchanan said. But it was soon followed by apprehension about the sensitivity and sensitivity of this moment ».

Investors will be watching Thursday for more data on jobs, the trade deficit and business activity. Federal Reserve Speakers Raphael Bostick And the James Pollard Both of them are scheduled to speak.

On Friday, investors will review nonfarm payrolls, the unemployment rate and hourly wages. Since the report could have a significant impact on the Fed’s next moves, it has the potential to influence the market. Investors don’t want to see big gains in wage growth.