Equity futures are looking down ahead of key labor data for the month and the Federal Reserve’s latest assessment of the economy. Two hours before the opening bell, investors are hesitant to push stocks higher after the 1.21% gain in the S&P 500 yesterday.
Futures on the Dow are currently down 2 points to 10,449 while the benchmark S&P 500 looks to open 1.25 points lower at 1,107.
The US dollar is slightly higher but that hasn’t stopped gold prices from hitting fresh all-time highs. Gold is currently up $13 to 1,209.60 per ounce, in contrast to falling oil prices which are down 60 cents this morning to $77.77 per barrel.
BMO’s Robert Kavcic writes this morning: “Gold continues to push into record territory, up another $13 to $1,210 amid continued worries about a depreciating U.S. dollar—note that the dollar index is actually flat this morning—and expectations of more central bank buying.”
Yesterday markets heard from Philly Fed President Charles Plosser, who called the greenback’s decline normal given the “flight to safety” seen earlier in the credit crisis.
“What's happened to the dollar over the last nine months is in part a reversal of what it did the previous nine months,” he said in Rochester, NY.
Looking ahead to tomorrow’s reappointment hearing for Fed chairman Ben Bernanke, Bloomberg reports that “a majority of Senate Democrats and Republicans . . .plan to green light his reappointment.”
The FT adds: “While there is little doubt he will be confirmed, congressional officials say the hearings will highlight concerns about the Fed, manifested in legislative proposals that would reduce its powers or its independence. Experts fear the US central bank could end up paying a heavy institutional price for its unorthodox actions to avert a depression.”
Key Events Today:
8:15 ― The ADP Employment Report is a key tool in forecasting the official employment data that comes out the first Friday of each month. Last month the ADP report showed 203,000 job losses in the private sector of the economy in October, compared with 227,000 in September. Another 150,000 private jobs are expected to have vanished in November.
“Last month, the ADP forecast was 13,000 lower than the official BLS count of private employment, and over the past six months this bias has averaged 79,000. We continue to put a low weight on the ADP figures in developing our forecast for nonfarm payrolls,” wrote analysts from Nomura Global Economics.
2:00 ― The Federal Reserve’s Beige Book, an anecdotal summary of each of the 12 regional economic districts, will give markets a broad idea of where things have been heading in the previous six weeks. Economists will glean the synopsis to look at trends in real estate and manufacturing, and many more will look at it to gauge the retail market as the holiday season gets underway.
In the last Beige Book, in mid-October, the Fed said: “Reports from the 12 Federal Reserve Districts indicated either stabilization or modest improvements in many sectors since the last report, albeit often from depressed levels.”
“The report will likely be more positive about non-auto consumer spending, in particular,” analysts from Nomura wrote. “The latest FOMC minutes (for the meeting at which this Beige Book was presented) said that these data signal "more underlying momentum in the recovery". We again expect negative comments about commercial real estate and the labor market. Price pressures likely remained non-existent.”
