Day Ahead: Top 3 Things to Watch on April 30
By Kim Khan
Investing.com - The stock market demonstrated its ability to turn any hopeful news into solid gains today, rallying sharply following a positive report on Gilead’s virus treatment.
And that enthusiasm could follow through tomorrow as big-name postmarket earnings satisfied the bulls.
Tesla (NASDAQ:TSLA), Facebook (NASDAQ:FB) and Microsoft (NASDAQ:MSFT) rose in after-hours trading following their results.
Investors shrugged off a sharp contraction in first-quarter GDP reported today, but tomorrow brings the more timely jobless claims numbers.
More big-name earnings arrive as well and it’s ECB decision day.
Here are three things that could move the markets tomorrow.
1. Rise in Jobless Claims Seen Tempering Again
Jobless claims will be in the spotlight ahead of trading tomorrow, with forecasts expecting them to show another decline in those filing for benefits but to be still at historically high levels.
The Labor Department reports weekly initial jobless claims at 8:30 AM ET (12:30 GMT).
Claims for first-time unemployment benefits are expected to have risen by 3.5 million, down from a rise of 4.43 million the week before, according to forecasts compiled by Investing.com.
Continuing claims are seen rising to about 19.3 million.
At the same time, March personal income and spending data arrive.
Spending is expected to have fallen 5% last month, with income down 1.5%.
2. Another Big Bout of Tech Earnings on Tap
Major tech earnings have so far justified the bullish bets of investors and two more big names will dominate the postmarket results Thursday.
Amazon (NASDAQ:AMZN), expected to be one of the few companies not struggling during the lockdown, reports its results.
Analysts are predicting a profit of $6.34 per share and revenue of about $72 billion, according to forecasts compiled by Investing.com.
Last week Goldman Sachs (NYSE:GS) boosted its price target on the stock to $2,900 from $2,600, the high-water market on Wall Street, and said it should report numbers well above the consensus.
“The increase in demand the company's retail, (cloud) and ads businesses is seeing and Amazon's ability to meet the challenges of this demand, will, we believe, serve to steepen the curve of its long term growth rate, drive incremental profitability, and further deepen the competitive moat around all of its businesses,” Goldman analyst Heath Terry said in a note.
Shareholders will also be looking for any response to President Donald Trump's assertions that package delivery companies should be paying much more to use the U.S. Postal Service.
Apple (NASDAQ:AAPL) will also issue its quarterly numbers.
The company is expected to post a profit of $2.31 per share and revenue of about $55 billion.
Apple is reportedly delaying the ramp-up in production of its flagship 2020 iPhones due to demand concerns and manufacturing disruption due to Covid-19.
Twitter (NYSE:TWTR) will report ahead of trading, with the consensus calling for a profit of 10 cents per share and revenue of about $791 million.
And McDonald’s (NYSE:MCD) will weigh in ahead of trading as well. Analysts predict earnings of $1.60 per share on sales of about $4.7 billion.
Investors will also be looking for ideas as to when the company will start opening up its restaurants.
3. ECB Decision, Press Conference Ahead
Central banks continue to be at the forefront tomorrow as the European Central Bank has its decision day.
The ECB will issue its policy statement at 7:45 AM ET (11:45 GMT).
ECB President Christine Lagarde will hold her press conference soon afterwards at 8:30 AM ET.
The central bank is not expected to make any moves on interest rates or adjustments to its 750 billion euro Pandemic Emergency Purchase Programme (PEPP) until it gets better clarity on how the easing of lockdown measures is progressing.
Policymakers are also awaiting details from the EU on a potential proposed recovery fund for the coronavirus.
"PEPP may be sufficiently large to fend off (temporarily) pressure on individual countries or product classes until we have more clarity on funding needs a bit later in the year," Bank of America (NYSE:BAC) said.
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