US pre-open: Stocks seen flat as investors eye OPEC, ADP report

US futures pointed to a muted open on Wall Street as the OPEC meeting got underway in Vienna and as investors looked to the release of the ADP employment report ahead of Friday’s non-farm payrolls.

At 1140 BST, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were down 0.1%.

In Europe, the main indices were trading a little higher as investors awaited the European Central Bank’s latest policy announcement.

At the same time, oil prices were little changed as market participants eyed the meeting of the Organisation of the Petroleum Exporting Countries in Vienna. West Texas Intermediate was flat at $49.01 a barrel while Brent crude was 0.1% firmer at $49.76.

Mohammed Bin Saleh Al-Sada, Qatar's Minister of Energy and Industry and president of the OPEC conference told delegates at the start of the meeting that world demand remained “healthy” and the market now appeared to be rebalancing as the lower oil price led to a scaling back of production and exploration.

“From the supply perspective, in the first half of this year, we have seen a further downward revision to the 2016 outlook for non-OPEC supply. We now anticipate a contraction of 740,000 barrels per day this year. This is more than 2m barrels per day lower than the growth of 2015,” he said.

“This trend stems mainly from reduced cashflows, investment cutbacks and the deferral or cancellation of projects.”

“It is evident that these developments point to a more balanced market in the second half of this year, with demand for OPEC crude averaging around 32.5m barrels per day during this period. The overall demand increase year-on-year for OPEC crude is around 1.8m per day.”

On the data front, US initial jobless claims are at 1330 BST. The ADP employment report at 1315 BST is likely to be watched more closely, however, as it’s widely considered a pre-cursor to the all-important non-farm payrolls on Friday.

If the payrolls report surprises to the upside, it could well underpin the argument for a US rate hike in a couple of weeks.

Nour Al-Hammoury, chief market strategist at ADS Securities, said the ADP report is expected to show around 174,000 jobs were added in May, “which should lead to a reasonable US jobs report on Friday”.

“Analysts will watch the employment components, which have been showing weakness in some sectors, and may limit any large market moves as well as supporting the USD sell-off in the short term. “

In corporate news, shares in cloud storage company Box Inc tumbled in pre-market trade after its billings for the quarter fell short of expectations late on Wednesday.

Home-builder Hovnanian Enterprises was among the companies slated to report ahead of the opening bell.