Day Ahead: Top 3 Things to Watch for April 8

This post was originally published on this site – Wall Street’s enthusiasm ran out of steam late today. It looked like another day of strong gains early on, but a sharp late reversal, prompted in part by plunging oil prices, left the major indices in the red.

Investors are also weighing enthusiasm about signs measures to contain the Covid-19 pandemic are working with the fact that the economic damage that will be done is still unknown.

JPMorgan (NYSE:JPM) predicted today that the U.S. had passed its peak in new cases three or four days ago and that it expects a limited reopening of the economy in one to two weeks, CNBC reported.

But JPMorgan analysts also said in a note yesterday that we’re experiencing “the first consumer and labor market downcycle in 11 years” and that investors “should keep fading the relief bounces, looking for new lows, and keep a defensive sector allocation.”

More data on coronavirus infections will come tomorrow, as will a different kind of Fed Minutes.

And oil inventories arrive as usual as traders await more hints on production cuts from OPEC+.

Here are three things that could move the markets tomorrow.

1. Fed Minutes on Emergency Meetings Arrive

The Federal Reserve minutes arrive tomorrow at 2:00 PM ET (18:00 GMT) and they’re not your usual minutes.

The minutes will cover two emergency meetings held by the Federal Open Market Committee last month (on March 3 and March 15) when it slashed rates to 0% to 0.25% as the impact the pandemic became clearer.

The Fed also announced a huge amount of quantitative easing, expanded repo operations and credit for commercial banks.

Usually the minutes give hints to the market on whether the FOMC is leaning hawkish of dovish, but it’ safe to say tomorrow’s release will illustrate an all-hands-on-deck approach and likely a willingness to do more if possible.

“Central banks have rolled out their global financial crisis playbooks in a matter of days – with the U.S. Federal Reserve buying assets of ($1.5 trillion) since announcing a return to quantitative easing,” UBS said in a note Tuesday.

“(P)olicymakers continue to act with unprecedented speed and scale, and we think that ultimately their efforts will help prevent a Global Financial Crisis-style credit crunch,” UBS said.

2. Oil Inventories on Tap as Cuts Still Uncertain

Oil prices took a tumble for the second-straight session as traders were kept in limbo on the possibility of production cuts

Even if OPEC+ can agree to cut production when it meets on Thursday, the drop in demand for oil across the globe means those cuts may not be enough to stabilize the market.

Ahead of the meeting, the weekly U.S. oil inventory numbers arrive tomorrow, with another big build expected.

The EIA will issue its report at 10:30 AM ET (14:30 GMT). Analysts are looking for a rise of about 9.3 million barrels for the week ended April 3.

In its measure of weekly crude stockpiles today, the American Petroleum Institute reported a rise of 11.9 million barrels.

3. Is the New York Curve Flattening?

Even though stocks ended lower, there was some more encouraging news about the spready of infections in the U.S.

New York state, the epicenter of the pandemic, said that the number of new cases admitted to intensive care units dropped significantly, a welcome sign for a state that is quickly running out of hospital beds.

New York Governor Andrew Cuomo will be giving another update tomorrow. His updates usually start around 11:00 AM ET (15:00 GMT).

His schedule will be updated here.