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Day Ahead: Top 3 Things to Watch

Investing.com - Here’s a preview of the top 3 things that could rock markets tomorrow.

1. Draw in Crude Supplies to Help U.S. Oil Prices Cruise Past $60?

Oil prices will be in focus Wednesday as the Energy Information Administration (EIA) is expected to show U.S. crude stockpiles fell for a third-straight week for the seven days ended March. 22.

Ahead of the data, however, the American Petroleum Institute reported Tuesday weekly crude stockpiles rose by 1.972 million barrels last week, compared with a draw of 2.13 million barrels in the prior week.

Analysts forecast crude inventories rose by about 1.2 million barrels last week.

Crude production will also garner attention after the EIA reported output rose to a record 12.1 million barrels a day in its previous report.

U.S. production is on track to top a milestone of 13 million barrels a day in March 2020, with most of the growth coming from the Permian region of Texas and New Mexico, the EIA said in its latest monthly outlook.

Crude oil futures jumped 1.9% to settle at $59.94 today, adding to gains of more than 20% so far this year, thanks to expectations for a decline global supplies amid limited exports from Venezuela.

"The market is in a risk-on mode and the trade must get ready for another big potential drop in supply," said Phil Flynn at Price Futures in Chicago.

"The OPEC cuts, along with zero exports from Venezuela, will take its toll as U.S. exports may hit a record high."

2. Lennar, Lululemon Report

Homebuilder KB Home managed to shake off the housing starts gloom from earlier in the day and rose after hours following mixed quarterly results.

Fellow homebuilder Lennar (NYSE:LEN) will weigh in ahead of trading tomorrow.

Analysts are calling for a profit of 76 cents a share on sales of about $4 billion.

Shares have been rallying the past three months, but are still well off the highs for the year. Since its year-ago report, Lennar acquired CalAtlantic Homes. The company builds homes in 21 states.

After the bell, Lululemon Athletica (NASDAQ:LULU) will report its quarterly numbers.

On average, analysts predict a profit of $1.74 per share, according to forecasts compiled by Investing.com. Revenue is expected to come in at $1.15 billion.

The stock was downgraded to neutral from outperform by Wedbush last week.

Payroll processor Paychex (NASDAQ:PAYX) reports before the open. In the fiscal-third quarter, the payroll processing company is forecast to earn 88 cents a share. That would be up nearly 40% from a year ago. Revenue is forecast at $1.04 billion, up 20% form a year ago.

And Brazilian mining giant Vale (NYSE:VALE) issues numbers after the market close. For the fourth quarter of 2018, the company is expected to report earnings of 54 cents per American Depositary Unit, up 80% from a year ago. Revenue of $10.07 billion would be a 9.8% gain year over year.

3. Trade Deficit Expected to Narrow

The economic calendar is fairly sparse tomorrow, but there will be trade figures, which have taken on a more prominent position for the market since the battles between Washington and Beijing.

The Bureau of Economic Analysis will issue the January trade balance numbers at 8:30 AM ET (12:30 GMT).

On average, economists expect that the trade deficit for January narrowed to $57 billion.

After the close of trading, Kansas City Fed President Esther George will be speaking on monetary policy and outlook at an event hosted by the Money Marketeers of New York University.

The event is scheduled to kick off at 5:30 PM ET.

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