Investing.com – The markets stayed true to their unpredictability today. Oil is still as volatile as ever, gold is rising and falling along with (rather than opposite to) equities, and stocks showed their fragility again.
Just the brief, accidentally-published report that a drug may not be a gamechanger for the Covid-19 pandemic sapped the life out the bulls.
Early on, investors managed to take a glass-half-full approach to the economic data. Tomorrow there will be more numbers on spending plans and sentiment.
In addition, investors get earnings from the telecom sector and data on oil production.
Here are three things that could move the markets.
1. Biggest Plunge for Durables in 5 Years?
Before the bell tomorrow, investors will get more data on the Covid-19 impact on the U.S. economy, starting with how durable goods orders held up in March.
The Commerce Department will issue its report on orders for goods lasting three or more years at 8:30 AM ET (12:30 GMT).
Economists expect that durable goods orders plunged 11.9% last month, according to forecasts compiled by Investing.com. That would be the biggest plunge since August 2014 (which came about as a rebound from a huge spike the month before in civilian aircraft orders).
Core durable goods orders, which exclude autos, are seen dropping 5.8% for the month.
At 10:00 AM ET, the University of Michigan will release its final measure of April consumer confidence.
The consumer sentiment index is expected to have dropped to 68 from the preliminary reading of 71. That would be down from 89.1 in March.
The index fell into the 50s during the Financial Crisis.
2. Verizon to Report After Boosting Cap Spending Expectations
Verizon Communications (NYSE:VZ) leads the earnings parade tomorrow in a typically thinner Friday calendar.
Analysts expect that the telecom giant will report earnings of $1.23 per share and revenue of about $32.5 billion, according to forecasts compiled by Investing.com.
As lockdowns across the country began, the company boosted its capital spending guidance to account for increased demand on its network.
On March 17 the company said it would not be able to gauge the impact of Covid-19 on its results. But it did get a vote of confidence from Goldman Sachs (NYSE:GS) on April 1, when Goldman put the stock on its Conviction Buy list.
Verizon has a stable wireless business and strong balance sheet, making risk-reward very attractive, while its wireless service is fairly non-discretionary, Goldman said.
3. Oil Rig Count on Tap
Oil prices settled up sharply again today, making its two-day gain a stunning 65%.
Tomorrow there will be more numbers to help investors gauge the direction of U.S. production when Baker Hughes issues its weekly oil rig count at 1:00 PM ET (17:00 GMT).
Last week Baker Hughes said the number of rigs in operation sank to 438 from 504.
It’s understandable if investors are trepidatious about buying into an oil comeback just yet, given the huge difference in demand and supply, even with cuts, that will persist. Analysts say the difference is around 20 million barrels per day.
“In my opinion, the June WTI contract will repeat what May did,” John Kilduff, founding partner at New York energy hedge fund Again Capital, said. “It will grind lower and lower and lower into expiration and probably turn negative at some point in time.”