The Day Ahead: Stocks Dip Before Barrage of Data and Fed Speak
After hitting fresh 52-week highs across the board yesterday, US equities are looking to open slightly lower this morning ahead of a packed schedule.
Just over one hour before the bell, Dow futures are down 19 points to 11,045 and S&P 500 futures are off 2.00 points to 1,204.50. The 2 year Treasury note is unchanged at 99-29 yielding 1.049% and the 10 year Treasury note is +0-03 at 98-04 yielding 3.855%.
Commodities are also lower with NYMEX crude oil down 11 cents to $85.73 and Spot Gold down $2.60 to $1,152.75.
Key Events Today:
8:30 ― The Empire State Manufacturing Index has been expanding for eight consecutive months and March should be no exception. Economists expect the index to come in at 25.0, up from 22.9 last month, largely as a result of the new orders index sprinting to 25.4 last month.
“With persistent signs of improving activity across a broadening swath of the economy, manufacturers in New York are likely to become more optimistic in April,” said economists from Nomura.”
8:30 ― Initial Jobless Claims are expected to drop 20k to 440k in the week ending April 10, according to economists. Weekly claims averaged 448k in March, 468k in February, and 476k in January, indicating a clear trend of fewer job losses during the first quarter. Note that economists believe a sustained trend below 450k losses in consisten with overall labor growth."
“Initial jobless claims jumped to 460,000 in the week ending 3 April, but this was likely to the result of distortions from the Easter holiday,” said economists from Nomura. “We will likely need a few more weeks of data before the underlying trend in claims becomes clear. The total number of jobless benefits receipts is stable at about 10.5 million.”
9:00 ― Last month’s Treasury International Capital report report indicated that net long-term TIC flows were softer than anticipated in January. The figure was $19.1 billion, a sharp drop from the $63.3 billion registered a month before. Moreover, China continued to divest. Predictions were not available for February but the headline could be a market-mover as concerns that borrowing rates could jump later this year have been heightened recently.
9:15 ― Industrial Production has been rising for nine months, but gains have been sporadic and there’s still a long way to go to reach pre-crisis levels. Economists look for a 0.8% in March, following up on a 0.1% gain in February and a 0.9% jump to start the year.
“Industrial production should post a solid gain of 0.6% despite having to buck a severe headwind from a large drop in utility output of almost 5% on much warmer weather,” said economists from IHS Global Insight, who are less optimistic than the consensus. “In contrast, manufacturing output was held back by bad weather in February and we expect it to climb more than 1% in March. The manufacturing recovery rolls on, as the solid ISM-manufacturing survey indicated."
10:00 ― Like its cousin index from New York, the Philadelphia Fed Manufacturing Survey continues to post healthy gains. The index is expected to rise 1.1 points to 20.0 this month, well into expansion territory. More sets of eyes could be focused on this report given that the Empire State and Industrial Production reports come out on the same day.
10:30 ― Jeffrey Lacker, president of the Richmond Fed, speaks to the Bank's Credit Markets in Transition: Positioning for Recovery conference.
12:15 ― James Bullard, president of the St. Louis Fed, speaks on "Containing Risks in the New Global Financial Landscape” at the Hyman Minsky Conference.
1:00 ― The Housing Market Index, a measure of homebuilder sentiment published by the National Association of Home Builders, has been one of the most stubborn reports in recent months. In February the report moved up two points to 17, which seemed like good news until it dropped back to 15 in March. Although up from up its all-time low of 8, the index is far from indicating any sense of optimism among homebuilders. And, it’s worth noting that before the financial crisis began, a score of 15 had never been seen before.
1:40 ― Dennis Lockhart, president of the Atlanta Fed, speaks to the Pensacola Suburban West Rotary Club.
3:15 ― Jeffrey Lacker, president of the Richmond Fed, speaks in Charlotte, N.C.
8:30pm ― Janet Yellen, president of the San Francisco Fed, speaks on the economic outlook to Financial Executives International in San Francisco.