Day Ahead: Top 3 Things to Watch for April 1

By Kim Khan

Investing.com - Wall Street ended lower today, but in more subdued trading indicative of a market that just wanted to get the first quarter in the rearview mirror.

As April begins tomorrow the market is facing at least an entire month with an economy on lockdown.

President Donald Trump said at the daily briefing after the bell today it was going to be a “very, very painful two weeks”

Stocks have responded well to bad economic news lately on hopes that it could prompt more money from Washington. More March data arrives Wednesday morning.

And the battered oil market will look at inventories after an unusually strong API measure today.

Here are three things that could move the market tomorrow.

1. Infrastructure Plan Solid

With the fiscal stimulus package put to bed, the market didn’t have to wait long for another possibility of more money in the system arising.

Trump raised the possibility of a $2 trillion infrastructure package. Right now this is purely a Trump idea and it would need Congressional approval. It may just be a trial balloon but Wall Street will be watching Trump’s twitter account to see if there are any more signs it will be pursued.

Also, with New York the epicenter of the pandemic in the U.S., the market is reacting to the latest info from there.

Governor Andrew Cuomo has been giving updates at 11:30 AM ET (15:30 GMT) and his schedule can be found here.

2. ISM Manufacturing, ADP) Employment on Tap

On the economic calendar, the Institute of Supply Management will report its March manufacturing purchasing managers’ index (PMI) at 10:00 AM ET (14:00 GMT).

Economists are looking for a drop in the manufacturing PMI to 45 from 50.1 the month before, according to forecasts compiled by Investing.com.

Manufacturing showed a little resilience in the Markit PMI earlier this month, but the services sector is the lion’s share of the U.S. economy and has virtually shut down.

At 8:15 AM ET, ADP (NASDAQ:ADP) will release its measure of private-sector jobs for March.

Private payrolls are expected to have dropped by 150,000, according to economists’ forecasts compiled by Investing.com. But that reading won’t encapsulate the full effect of the pandemic on jobs this month.

The government jobs report on Friday will also be somewhat incomplete, with the survey taken during the week of March 12.

“Anyone who worked one hour that week will be included in the payroll survey and not yet have hit the ranks of the unemployed,” Diane Swonk, chief economist at Grant Thornton, wrote in a note today.

Given the surge in jobless claims, “(c)ould the number crunchers at the Bureau of Labor Statistics (BLS) decide to update their estimates on the birth and death rates of firms to more accurately capture the March turning point?” Swonk asked.

“Should any changes to our methodology be necessary they will be made clear to the public and available upon release of the data,” the BLS replied.

3. Oil Inventories Expected to Have Risen

The oil market is reeling from its worst quarter ever. Demand is cratering and Saudi Arabia is still pumping out as much as possible in order to gain market share.

But there are still fundamentals for traders to go on and today’s oil stockpile numbers should add some interest to the official government numbers tomorrow.

The American Petroleum Institute said its measure of crude inventories rose by about 10.5 million barrels last week, indicating that the demand destruction from the economic disruption is now showing up in these numbers.

The Energy Information Administration releases its oil inventory numbers tomorrow at 10:30 AM ET (14:30 GMT).

Analysts are looking for a build of about 4 million barrels, according to forecasts compiled by Investing.com.

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