Meanwhile, oil managed to show strength as crude inventories declined by 9.9 million barrels.
Stocks Set To Open Lower In Continuation Of Yesterday’s Sell-Off
S&P 500 futures are losing ground in premarket trading as markets remain in a risk-off mode.
Yesterday, U.S. Fed left the interest rate unchanged and stated that its asset purchase program would be continued at the current pace. The commentary of the Fed Chair Jerome Powell was very dovish, and he signaled that the Fed could provide additional support if necessary.
Interestingly, Fed’s dovish comments failed to provide any support to markets. Some analysts have speculated that yesterday’s sell-off was triggered by funds that got caught in unfortunate GameStop shorts and had to raise money by selling other assets, but it looks like investors are worried about the continued problems on the coronavirus front and the disappointing pace of vaccination.Advertisement
Declining Inventories Provide Support To Oil Prices
EIA has recently reported that crude inventories declined by 9.9 million barrels, providing material support to oil. U.S. crude inventories totaled 476.7 million barrels and were just 5% above the five-year average for this time of the year.
Meanwhile, U.S. domestic oil production declined from 11 million barrels per day (bpd) to 10.9 million bpd despite the steady increase in the number of U.S. rigs drilling for oil.
The report was very bullish and helped WTI oil stay above the $52 level despite the global market sell-off. However, stock investors have still punished oil-related stocks on Wednesday, and this segment is also set to remain under pressure at the beginning of today’s trading session.
Initial Jobless Claims Decline To 847,000
Initial Jobless Claims report indicated that 847,000 Americans filed for unemployment benefits in a week. Analysts expected Initial Jobless Claims of 875,000. Meanwhile, Continuing Jobless Claims declined from 5.05 million to 4.77 million compared to analyst consensus of 5.05 million.
Fourth-quarter GDP grew by 4% quarter-over-quarter, fully in line with the analyst consensus.
Job market reports were a bit better than expected, but it remains to be seen whether they will be able to provide sufficient support to the market.