By Kim Khan
Investing.com - Stocks found direction hard to come by and ended the day in the red after a volatile session today.
Major earnings were mixed after the bell, much like ahead of trading.
Tomorrow morning trading could be subdued until the Federal Reserve decision and subsequent press conference.
But before the bell there will be first-quarter GDP numbers for investors to digest. And the earnings assembly line keeps going.
Here are three things that could move the markets tomorrow.
1. Fed Outlook in the Spotlight
The Federal Open Market Committee will release its April statement tomorrow at 2:00 PM ET (18:00 GMT).
No change in rates is expected, so attention will be focused on any guidance the Fed has about the trajectory of the economy.
Federal Reserve Chairman Jerome Powell’s press conference at 2:30 PM ET will also be closely watched.
“As Chair Powell has stated several times, the economic outlook and the policy path will be determined by the virus,” John Velis, FX and Macro Strategist for the Americas at BNY Mellon (NYSE:BK), wrote in a research note. “Nevertheless we will be expecting some estimates of the amount of economic damage and possible paths of recovery from the FOMC on Wednesday.”
“In addition to some idea regarding the economic outlook, we don't expect the Fed to announce new policy measures, and that includes the interest rate on excess reserves (IOER),” Velis said. “This key rate represents the opportunity cost to banks' borrowing in the Federal Funds Market, and raising it would tend to pull the Federal Funds Rate higher.”
2. GDP Arrives With Expansion Expected to End
Along with the Fed, investors will get their first look at the number on economic growth for the first three months of the year. The numbers capture the tail end of the lockdown of the U.S. economy.
The Commerce Department will reports the advance measure of first-quarter gross domestic product (GDP) at 8:30 AM ET (12:30 GMT).
Economists expect that GDP contracted at an annual rate of 4%, according to forecasts compiled by Investing.com.
That would be the biggest contraction since 2009 during the Financial Crisis, which saw contractions of more than 6%. The big damage is expected to be seen in the second quarter, where all but essential services are halted. The economy could contract as much as 65%, according to the most pessimistic estimate, Bloomberg reported.
3. Tesla, Facebook, Microsoft to Report
Among the raft of earnings reports coming tomorrow will be Tesla (NASDAQ:TSLA), which issues numbers after the close of trading.
Last week Bank of America Merrill Lynch (NYSE:BAC) downgraded the stock to underperform from neutral on valuation. Shares are up more than 80% year to date.
“As the macro backdrop has deteriorated so rapidly/severely with the COVID-19 pandemic, quarantines and business shutdowns implemented, along with what we expect to be a tepid U-shaped recovery as economies are reopened … we are once again cutting our global volume forecast,” analyst John Murphy wrote, according to Briefing.com.
Analysts predict a loss of 25 cents per share on revenue of about $6.2 billion, according to forecasts compiled by Investing.com
Facebook (NASDAQ:FB) will also report postmarket.
The social media giant is seen posting a profit of $1.75 per share and revenue of about $17.4 billion.
Microsoft (NASDAQ:MSFT) will also be issuing quarterly results.
On average, analysts are looking for earnings of $1.29 per share on revenue of about $34 billion.
General Electric (NYSE:GE) will report before the bell tomorrow.