Futures Pointing To Mixed Open On Wall Street

With traders reacting to the results of the Georgia runoff elections, the major U.S. index futures are pointing to a mixed open on Wednesday. While the Dow futures have inched up by 44 points, the Nasdaq futures have plunged by 178 points.

The mixed performance by the futures comes as the results of the Georgia runoffs currently point to Democrats taking over control of the U.S. Senate.

Democratic candidate Rev. Raphael Warnock is projected to win his race against Republican Senator Kelly Loeffler, while the race between Jon Ossoff and GOP Senator David Perdue is too close to call but the Democrat is in the lead.

If Ossoff holds onto his narrow lead, the Senate would be split 50-50, with a tie-breaking vote by Vice President-elect Kamala Harris giving Democrats control of the chamber.

The uptick by the Dow futures comes as Democratic control of the House, Senate and White House is seen as a positive for cyclical stocks due to the likelihood of additional fiscal stimulus.

Meanwhile, the Nasdaq futures are under pressure, as tech stocks could be hurt by the move into cyclical stocks as well as the higher taxes sought by many Democrats.

Early trading may also be impacted by reaction to a report from payroll processor ADP showing an unexpected drop in private sector employment in the U.S. in the month of December.

ADP said private sector employment fell by 123,000 jobs in December after jumping by a downwardly revised 304,000 jobs in November.

The decrease surprised economists, who had expected employment to climb by about 88,000 jobs compared to the addition of 307,000 jobs originally reported for the previous month.

“As the impact of the pandemic on the labor market intensifies, December posted the first decline since April 2020,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “The job losses were primarily concentrated in retail and leisure and hospitality.”

On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report, which includes both public and private sector jobs.

Economists currently expect employment to increase by 100,000 jobs in December after climbing by 245,000 jobs in November. The unemployment rate is expected to remain at 6.7 percent.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on new orders for manufactured goods in the month of November. Factory orders are expected to climb by 0.7 percent.

Following the sharp pullback seen on the first trading day of the New Year, stocks showed a strong move back to the upside during trading on Tuesday. The major averages fluctuated early in the session but climbed firmly into positive territory as the day progressed.

The major averages finished the session near their best levels of the day. The Dow rose 167.71 points or 0.6 percent to 30,391.60, the Nasdaq jumped 120.51 points or 1 percent to 12,818.96 and the S&P 500 climbed 26.21 points or 0.7 percent to 3,726.86.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Wednesday. Japan’s Nikkei 225 Index fell by 0.4 percent, while China’s Shanghai Composite Index advanced by 0.6 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index has spiked by 3 percent, the German DAX Index is up by 1 percent and the French CAC 40 Index is up by 0.8 percent.

In commodities trading, crude oil futures are inching up $0.03 to $49.96 a barrel after spiking $2.31 to $49.93 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,939, down $15.40 compared to the previous session’s close of $1,954.40. On Tuesday, gold climbed $7.80.

On the currency front, the U.S. dollar is trading at 103.06 yen compared to the 102.72 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.2328 compared to yesterday’s $1.2298.

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