All Eyes on Fed’s Minutes of FOMC Outlining Inflation Views

The U.S. stock index futures pointed to a higher opening this European afternoon as focus turns to the economic releases. Nasdaq Composite futures, S&P futures and Dow futures are all up 0.38 – 0.75%.

Yesterday, after closing out a year in which the S&P 500 dropped more than 19%, Wall Street extended its gloomy demeanor into the start of 2023, with stocks edging lower amid retreats in high-profile names like Apple (AAPL) and Tesla (TSLA).

The Nasdaq Composite closed -0.8%, the S&P 500 ended -0.4% and the Dow finished fractionally lower. The Nasdaq led the retreat among the major averages, falling 79.50 points to close at 10,386.98. The S&P 500 dropped 15.36 points to finish at 3,824.14, while the Dow ticked down 10.88 points to conclude trading at 33,136.37.

Energy sector underperformed the most in the session, plunging 3.6% after crude oil dropped to around $77 a barrel. Elsewhere, sector moves were more modest. With six of 11 S&P segments finishing the day lower, Info Tech was another major decliner, falling by over 1%.

The Federal Reserve is set to shed more light on its view that stubborn inflation may linger as the U.S. economy enters 2023. At the conclusion of the Dec. 13-14 meeting of the Federal Open Market Committee, FOMC, policymakers published new projections showing they expected inflation would end 2023 higher than they previously thought. That led to surprisingly widespread support in the projections for the notion that interest rates would need to rise above 5% in 2023. The Fed will publish minutes of the meeting at 2 p.m. EST.

Corporatewise, a subsidiary of General Electric — GE HealthCare Technologies – begins trading as a separate company on the S&P 500. GE, in 2021, revealed plans to spin off its two subordinated companies so it can focus on its aviation business. It also plans to alienate its energy segment in 2024. Shares of GE grew about 2% in the late premarket.

Meanwhile, stock market indexes in Europe extended their gains in the aftermath of the newest report that showed only a moderate slowdown of the Eurozone's economic activity. Meanwhile, British Chancellor of the Exchequer Jeremy Hunt is in a tough meeting with various business groups to discuss how the government could cope with the ongoing energy crisis.

The German DAX rose by 1.80% at 2:50 p.m. CET. At the same time, the French CAC 40 grew by 1.90%. The British FTSE 100 increased by just 0.38%. The Euro Stoxx 600 gained 1.21% concurrently. On the Fx front, the euro advanced by 0.59% against the dollar to $1.06136, while the British pound rose 0.71% against the greenback to $1.20578.

Foreign investors withdrew more money from emerging Asian equities in 2022 than they had done in any year since the global financial crisis in 2008, as rising U.S. interest rates pulled funds towards dollar assets. The China Academy of Information and Communications Technology (CAICT) revealed that domestic shipments of mobile phones posted an annual decline of 34.1% in November.