Day Ahead: Top 3 Things to Watch for May 6

By Kim Khan

Investing.com - Stocks ended higher today, but late selling took the shine off the rally.

Federal Reserve Vice Chairman Richard Clarida said that the unemployment rate could hit levels the country hasn’t seen since the 1940s, which trimmed gains in the major indexes in late trading.

The market will get private-sector employment numbers ahead of trading Wednesday.

There will be the weekly inventory numbers for oil investors and earnings from the payment and auto sectors.

Here are three things that could move the markets tomorrow.

1. Private Payrolls Expected to Drop by 20M

The countdown to Friday’s historic employment report begins Wednesday with a measure of April’s private sector job situation.

“One of the greatest surprises to many during this health crisis has been the surge in layoffs in the health care industry,” Grant Thornton Chief Economist Diane Swonk said in a note Sunday. “The fear of going to dental and doctor offices and contracting COVID-19 prior to national lockdowns in March had already triggered the largest ever drop in health care jobs in a single month.”

ADP (NASDAQ:ADP) issues its payrolls report at 8:15 AM ET (12:15 GMT), the first full measure of a month the country spent on lockdown restrictions.

Economists expect that private sector payrolls plunged by 20.05 million, according to forecasts compiled by Investing.com.

Some market watchers tend to overlook ADP numbers as they can diverge greatly from the official figures, but as we’ve seen in the case of oil inventories, when numbers get this large the divergence become less significant.

2. Oil Inventories on Tap

Official weekly oil inventories numbers will be reported tomorrow with prices on roll, cruising higher in almost every recent session. Prices rocketed more than 20% higher in today’s trading.

The Energy Information Administration will post its figures for crude stockpiles for the week ended May 1 at 10:30 AM ET (14:30 GMT).

Analysts predict that inventories rose by about 7.8 million barrels last week, which would be down from the build of 9 million barrels in the previous week and continue the downward trend.

After the bell today, the American Petroleum Institute said its measure of inventories for the week ended May 1 rose by 8.4 million barrels, compared with a rise of 10 million barrels the week before.

3. PayPal, GM to Report

Among earnings reports tomorrow, online payments company PayPal Holdings (NASDAQ:PYPL) will issue numbers after the close of trading.

The company could see some benefit from the rise of e-commerce during lockdown restrictions, but investors will be looking for strength in guidance as well with shares near an all-time high.

Analysts are looking for a profit of 76 cents per share and revenue of $4.75 billion, according to forecasts compiled by Investing.com.

General Motors(NYSE:GM) will report before the bell, with investors likely keen on how zero-percent financing offers have helped the automaker.

GM is predicted to have earned 50 cents per share in the quarter on sales of about $32.5 billion.

Online food delivery company Grubhub (NYSE:GRUB) and drugstore chain CVS, both important indicators of the lockdown economy, will also report earnings tomorrow.

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