Top 5 Things to Know In the Market on Wednesday

© Reuters. 5 key factors for the markets on Wednesday

Investing.com - Here are the top five things you need to know in financial markets on Wednesday, February 1:

1. Fed expected to stand pat, markets to gauge March for rate hike

The Federal Reserve (Fed) is widely expected to stand pat on interest rates when it announces its decision at 2:00PM ET (19:00GMT) on Wednesday but investors will go over the latest statement from the Federal Open Market Committee (FOMC) with a magnifying glass, looking for any change in language which could point more clearly to a near-term rate hike.

While some experts suggest that the Fed’s hands are tied until the full package of President Donald Trump’s fiscal policies are announced, others believe that the boxes for further monetary policy tightening are already being checked.

While waiting for the Fed’s announcement, the dollar recovered somewhat on Wednesday, after having closed out January with monthly losses of 2.75%.

At 6:02AM ET (11:02GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, inched up 0.04% to 99.57.

Gold prices also held near one-week highs as markets waited for details from the U.S. central bank.

The precious metal gained $1.35, or 0.11%, to $1,212.75 a troy ounce by 6:03AM ET (11:03GMT).

2. Apple reclaims smartphone throne as eyes turn to Facebook

Shares of Apple (NASDAQ:AAPL) were trading nearly 3% higher in premarket trade after the tech firm reported earnings after the market close a day earlier reclaimed the lead as the world’s top smartphone seller for the first time in five years.

Advanced Micro Devices (NASDAQ:AMD) also saw shares jump close to 5% in pre-market trade as fourth quarter earnings topped estimates and the midpoint of the chip maker’s first quarter revenue guidance topped consensus.

Earnings continued to be a major market focus as 196 S&P companies had already released earnings as of Tuesday with 65% so far beating on the bottom line and 51% topping sales forecasts.

Among several reports out on Wednesday, the focus would most likely be after the close on Facebook (NASDAQ:FB) and whether the social media giant can deliver further user growth.

3. Oil recovers as supply balancing act continues

Oil recovered some lost territory on Wednesday after chalking up monthly losses of about 1.7% in January.

Crude prices have been stuck in a range of the low to mid $50-level as market participants weighed the progress of major oil producers on their agreement to cut production against that fact that U.S. drilling activity has risen by more than 6% since mid-2016.

Meanwhile, investors looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products.

The U.S. Energy Information Administration will release its weekly report on oil supplies at 10:30AM ET (15:30GMT) Wednesday, amid analyst expectations for a rise of 3.3 million barrels.

U.S. crude oil futures gained 0.44% to $53.04 at 6:04AM ET (11:04GMT), while Brent oil traded up 0.47% to $55.84.

4. ADP to give employment preview, ISM manufacturing on tap

Ahead of the Fed announcement, two key market reports will give additional info on the state of the U.S. economy.

ADP payrolls data is released at 8:15AM ET (13:15GMT). Economists expect to see the creation of 165,000 private sector payrolls, just below the 175,000 consensus for total January nonfarm payrolls, expected on Friday.

That will be followed by the ISM manufacturing data for the same month at 10:00AM ET (15:00GMT).

5. Global shower of manufacturing data activity.

As investors looked ahead to the U.S. data for the first month of 2017, reports on manufacturing activity worldwide were released earlier on Wednesday.

China’s purchasing managers’ index (PMI) showed that the world’s second largest economy continued to show growth in its manufacturing sector, with the expansion near a two-year high that calmed worries over a hard landing.

Japan’s own data revealed that its factory sector was growing at the fastest pace in almost three years.

Russian factories, meanwhile, grew at their fastest pace in 70 months.

Not to be left behind, euro zone factories have posted their best month in almost six years, thanks to the strong growth in Austria, Germany and the Netherlands.