Jobless Claims, Earnings, Atlanta Fed GDPNow

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Thursday, March 6.

State of Play

Stocks rallied yesterday for the first time in days. The cause was — you guessed it — tariffs off. As we eye our board of indicators for signs of direction at 0650, it’s back to tariffs on and escalating rhetoric on a Sino-US trade war — and therefore risk off:

• Stock index futures are dropping, led by tech. The Nasdaq is down 1.3% with S&P 500 down 1%;

• Bonds are dropping as well. The 10-year yield is up 3 basis points to 4.30% (yields move inversely to prices);

• Commodities are weirdly quiet. Maybe commodities traders just can’t keep up with the tariffs on/tariffs off news. WTI crude oil is up 0.5% to trade around $66.70/barrel. Copper is down 0.3%;

• Cryptos aren’t doing much either. Bitcoin up 1% to trade north of $91,000 again.

Today’s Known Events

We start with earnings, as is customary during earnings season:

• JD.com (JD 0.00%↑) overnight appears to have impressed investors as the stock is up 6% in the pre-market. More good news for China bulls there;

• BJ’s Wholesale Club (BJ 0.00%↑) is due to report intermittently;

• Cracker Barrel Old Country Store (CBRL 0.00%↑), Kroger (KR 0.00%↑), and Macy’s (M 0.00%↑) also report before the open at 0930;

• After the close we’ll hear from Broadcom (AVGO 0.00%↑), Costco (COST 0.00%↑), BigBear.ai (BBAI 0.00%↑), and Gap (GAP 0.00%↑) among others.

It’s Thursday so we’ll get initial jobless claims at 0830. This is worth watching this week just because it printed so hot last week. Economists who were surveyed expect 234k new claims, down a bit from the 242k recorded last week and north of the four-week average of 224k.

The Atlanta Fed’s GDPNow tracker is released at 1300 this afternoon. This caused a bit of an uproar at its last unveiling, as it suddenly predicted a drop in GDP for this quarter. New estimates are released pretty constantly and the Atlanta Fed is kind enough to tell us what the inputs are in their model, though they are quick to say it isn’t actually an official forecast. Well, thanks.

Also worth pointing out that employment data does not seem to factor in to the equation at all. It’s instead based on things like construction spending, auto sales, trade, housing starts, and home sales. Certainly viable inputs, though excluding employment data seems to be a pretty big oversight.