Investing.com - Here are the top five things you need to know in financial markets on Wednesday, November 22:
1. S&P eyes 2,600 ahead of holiday break
U.S. futures pointed to day of muted trade on Wednesday as investors geared up for the Thanksgiving holiday. Trade was expected to be traditionally thin with Wall Street closed on Thursday and closing early at 1:00PM ET (18:00GMT) on Friday. At 6:01AM ET (11:01GMT), the blue-chip Dow futures gained 28 points, or 0.12%, S&P 500 futures inched up 1 point, or 0.03%, while the Nasdaq 100 futures slipped 1 point, or 0.02%.
The slight gains suggested that the S&P 500 could once again set its sights on 2,600 points, having briefly broke the psychological level on Tuesday only to pare gains and close less than a point below. All three major U.S. benchmarks recorded closing highs on Tuesday.
That bullish finish translated to yet another record high for global equities on Wednesday, propelled higher by a bullish growth and company earnings outlook, as well as investors' unflagging enthusiasm for technology stocks.
European bourses were mostly higher on Wednesday though Germany’s DAX remained under pressure from doubts over Chancellor Angela Merkel’s next move to form a government in the motor of the euro zone economy.
Earlier, Asian shares closed with solid gains with Hong Kong’s Hang Seng breaking above 30,000 points for the first time in 10 years.
2. Oil surges to 2 ½ year high ahead of data dump
Oil prices rose further on Wednesday, with the U.S. benchmark surging to its best level since July 2015 amid speculation weekly supply data due later in the day will show a large drop in U.S. crude inventories.
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories fell by 6.4 million barrels last week. That compared with analysts' expectations for a decline of around 2.1 million barrels.
The U.S. Energy Information Administration will release its official weekly oil supplies report at 10:30AM ET (15:30GMT) amid expectations for a draw of around 1.5 million barrels.
Also on the docket due to the shortened holiday week, market participants will also keep an eye on U.S. shale production when Baker Hughes releases its most recent weekly rig count data at 1:00PM ET (18:00GMT).
Outside of the data, news of faults on a major pipeline that dented Canadian deliveries to the United States along with continued hopes for a production cut at the upcoming November 30 OPEC meeting also buoyed bullish sentiment in black gold.
3. Eyes on Fed minutes as Yellen admits uncertainty over inflation
The Federal Reserve will release minutes of its most recent policy meeting on Wednesday at 2:00PM ET (1900GMT). The U.S. central bank left interest rates unchanged following its meeting on November 1 and signaled it still intended to raise rates in December, as officials noted “solid” economic growth and a tightening labor market.
The Fed is scheduled to hold its final policy meeting of the year on Dec. 12-13, with interest rate futures pricing in a 100% chance of a rate hike to the 1.25% to 1.50% range, according to Investing.com's Fed Rate Monitor Tool.
After the market close Tuesday, Fed chair Janet Yellen reiterated that the U.S. central bank should continue to gradually raise interest rates to keep both inflation and unemployment from drifting too low.
However, as Yellen predicted inflation to rebound over the next year or two she admitted that she was “very uncertain about this. My colleagues and I are not certain that it is transitory, and we are monitoring inflation very closely."
4. Durable goods to take the stage
Among the data released on Wednesday, the focus will likely be on October durable goods orders out at 8:30AM ET (13:30GMT) with expectations for a deceleration that nevertheless maintains underlying strength. The consensus forecast is that the report will show orders for durable goods inched up 0.3% last month, following a jump of 2.0% in September.
Core orders are forecast to rise 0.5%, after gaining 0.7% a month earlier.
5. UK presents budget amid Brexit negotiations
British finance minister Philip Hammond is scheduled to present the UK budget to parliament at 7:30AM ET (13:30GMT) Wednesday as the country continues its negotiations for the departure from the EU.
The budget is being presented during uncertain times as the UK seeks to push Brexit negotiations forward and begin talks on future deals with its largest trading partner.
Hammond is thought to have little room for the kind of bold budget moves that many in his Conservative Party are demanding to help households after years of cuts in public spending.
Instead, he is widely expected to stick to his budget rules and tread carefully with measures to speed up house-building and improve Britain's weak productivity.
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