U.S. Stocks Set To Open Higher Following The Durable Goods Orders Report

Durable Goods Orders Got Hit Hard In March

Durable Goods Orders report has just been released and showed a contraction of -14.4% in March compared to analyst estimates of -11.9%. The transportation sector got hit hard, as Durable Goods Orders excluding Transportation declined by -0.2% compared to analyst estimates of -5.8%.

Thus, analysts underestimated the hit to transportation sector which was responsible for almost all of the decline in Durable Goods Orders.

Currently, the market is showing calm reaction to the news, and S&P 500 futures are pointing to a roughly 1% gain in premarket trading.

Yesterday, the market was not able to hold to its earlier gains as poor economic data weighed on stocks. Today, market participants will also get a chance to evaluate Michigan Consumer Sentiment which may test the current market optimism.

Oil Shows Signs Of Stabilization

Volatility in the oil market decreased after wild moves of the recent days. WTI oil futures are gaining some ground but the most important thing is that oil’s swings have become less violent.

Oil has been responsible for a significant part of equity market volatility this week as traders and investors managed their positions in oil-related equities. In addition, oil price swings were important for the general market mood.

It looks like oil will be a less important catalyst for the equity market today, so market participants will concentrate on economic data, additional stimulus measures and outlook for the coronavirus pandemic.

U.S. House Of Representatives Passed A New $484 Billion Coronavirus Aid Package

The market obviously anticipated that more stimulus will emerge, and it did not have to wait long – the $484 billion coronavirus bill, which provides aid to small businesses and hospitals, has been passed by the U.S. House of Representatives.

As the crisis continues, the economy will likely require more supportive measures. Currently, the U.S. enjoys very favorable funding environment as demand for the U.S. dollar and U.S. Treasuries, which serve as safe haven assets of last resort, remains strong.

It remains to be seen whether additional stimulus measures can take the market back to recent highs or whether the economic data and the worsening companies’ guidance reported during this earnings season will push it lower.