Stocks pulled back on Wednesday despite a much better than expected ADP report. The ADP report says more than 800,000 new jobs were created in December which is more than double the consensus estimate. The news is great for the economy as it means much-needed positions are getting filled and log-jams in the supply chain will begin to ease but it also means hiring. Wages are on the rise as well and expected to accelerate in this month?s NFP report. The buzz on Wall Street is that wage inflation will run in the mid-teens this year.

The reason for the pullback was the FOMC minutes which revealed a much-more hawkish Fed than the market was looking for. The FOMC minutes indicate the committee could hike rates for the first time by March and begin trimming the balance sheet soon after. The yield on the ten-year treasury advanced to an 8-month high on the news while the NASDAQ Composite shed more than 2.75% at the low of the day.