Private Payrolls, Q4 GDP, Crude Inventories: 3 Things to Watch By

© Reuters.

By Sam Boughedda

-- Stocks continued to climb higher, as investors await key economic reports on jobs and economic output on Wednesday.

Despite Russia’s continued assault on Ukraine, and peace talks meant to at least achieve a ceasefire, investors appeared to focus on the upcoming data releases. 

The strong surge in stocks, particularly technology shares, in the afternoon on Tuesday came despite a recession warning in the bond market, when the 2-year Treasury yield briefly ran higher than the 10-year for the first time since 2019.

The Federal Reserve is trying to weigh how aggressively to target inflation, and the jobs data this week will factor into its decision making at the May meeting. 

Expectations are building that the Fed will raise rates by a half-point rather than the customary quarter-point increase. On Tuesday, data on job openings showed there were 11.3 million positions available in February, and some five million more than there were workers available.

Oil has been pressured in recent days, falling again on Tuesday ahead of the government’s much-followed report on inventories for the previous week. The oil industry’s own report is due out after the market closes tonight.

Later this week, the government will release data on personal income and spending, which may show how households have been affected by rising prices for food and other goods and gasoline price spikes in the last month.

Here are three things that could affect markets tomorrow:

1. ADP payrolls

March's ADP non-farm employment change data —  a measure of the monthly change in non-farm, private employment — is set to be released Wednesday morning at 8:15 AM ET. Consensus forecasts are for companies to have added 450,000 jobs, below the previous 475,000 reported. But the data comes a couple of days before the government's broader report on employment and is likely to be a barometer of market sentiment.

2. Economic output

GDP for the fourth quarter will also be reported at 8:30 AM ET, with expectations for a 7.1% reading from the month before, well above the previous 2.3% number.

3. Crude inventories

Elsewhere, crude oil inventory data will be released mid-morning at 10:30 AM ET, with analyst's forecasting crude oil inventories falling 1.022 million barrels. This data comes as oil prices have steadily fallen despite Russia's war on Ukraine and sanctions potentially hitting supply. EIA Weekly Distillates Stocks are forecasted as falling 1.550 million, while gasoline inventories are forecast to fall 1.744 million.

 

 

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