The Wednesday Market Minute
- Global stocks extend cautious gains, with US stocks holding in tight ranges, as lawmakers in Washington move closer toward the historic impeachment of President Donald Trump.
- House lawmakers will vote on impeachment later today, with reports suggesting Republican lawmakers in the Senate could be willing to support Democrats in removing Trump from office.
- Benchmark 10-year bonds yield tumble following a stronger-than-expected auction Tuesday, lifting the dollar to solid gains against its global peers.
- Oil prices hold steady after API data shows a 5.8 million decline in domestic U.S. crude stocks, with today's EIA report in focus.
- U.S. equity futures suggest modest opening declines ahead of December inflation data at 8:30 am Eastern time.
U.S. equity futures edged lower Wednesday, while bond markets rallied following a solid auction of ten-year notes, as investors maintained a cautious stance on risk markets ahead of today's historic Presidential impeachment proceedings in Washington.
House lawmakers will vote to impeach President Donald Trump for his role in last week's violent storming of the Capitol building later today, using both their Democratic majority and the support of several Republicans. The vote would make Trump the first President in U.S. history to be impeached on two separate occasions, while setting up what could be an equally historic vote in the Senate that could remove him from office.
Vice President Mike Pence, however, rejected a call to invoke the 25th Amendment, saying it a letter to House Speaker Nancy Pelosi that it would 'set a terrible precedent.'
The machinations in Washington has kept U.S. stocks range-bound for much of the past week, with gains held down by both the ongoing rise in coronavirus infections and consistent reports of delays in the government's vaccine rollout strategy.
Stocks look set to repeat that pattern Wednesday, with futures suggesting only modest opening bell declines ahead of a key reading of December inflation, but could get some relief in the form of lower Treasury bond yields, which fell from a 10-month high Tuesday, and extended losses overnight, following stronger-than-expected demand for a $38 billion auction of 10-year notes.
Contracts tied to the Dow Jones Industrial Average are indicating a small 40 point slip to start the trading session, while those linked to the S&P 500 are priced for a 9 point fall. Nasdaq Composite futures suggest a 16 points decline.
Auto stocks were on the move in early pre-market trading, with Ford Motor Co. (F) - Get Report rising 0.7% following data from China showing a 6% gain in overall sales in the world's biggest car market, its first growth in three years.
Oil prices, however, continued their months-long rally, taking U.S. crude past $53 per barrel, following data late Tuesday from the American Petroleum Institute that showed domestic stockpiles falling by 5.8 million barrels over the week ending January 5.
WTI contracts for February delivery gained 18 cents to trade at $53.39 per barrel while Brent futures for March delivery, the global benchmark, rose 10 cents to $56.68 per barrel.
In Europe, stocks edged higher despite increasingly bleak COVID assessments from health officials in Germany, who are likely to extend the country's business and travel restrictions at the end of the month.
Germany's DAX performance index was marked 0.1% higher in the early hours of trading, helping the Stoxx 600 benchmark to a 0.21% gain. Britain's FTSE 100 was marked 0.15% higher even as the pound jumped to a multi-year high of 1.3700 against the U.S. dollar.
Overnight in Asia, stocks also shrugged-off bad COVID news, with Japan extending its state of emergency beyond Tokyo to include the cities of Osaka and Kyoto and China reporting its biggest daily increase in infections in more than five months, most in the Beijing-adjacent province of Hebei.
The Nikkei 225 ended the session 1.04% higher at a 30-year peak of 28,456.59 points while the region-wide MSCI ex-Japan benchmark was seen 0.44% higher heading into the final hours of trading.