Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Wednesday, April 2.
State of Play
Stocks advanced yesterday but closed off the highs. As we eye our board of indicators for signs of direction at 0650, things are quiet ahead of Tesla (TSLA 0.00%↑) deliveries and all this Liberation Day stuff :
Stock index futures are dropping a bit, led by tech. The Nasdaq is down 0.8% with S&P 500 futures off 0.6%;
Cryptos are showing a few signs of life. Bitcoin up 1% to move north of $85,000;
Commodities are quiet. WTI crude oil is down just 0.5% to trade around $70.80/barrel. Copper is up 0.4%. Even gold and silver aren’t moving;
Bonds are also quiet after rallying for the last couple of days. The 10-year yield is 4.15%.
Today’s Known Events
Tesla (TSLA 0.00%↑) reports first-quarter deliveries today, presumably at 0900 ET. This will surely impact Tesla’s stock, which will also take major US indexes with it seeing how TSLA is part of nearly all of them. Tesla is down in the pre-market at the time of this writing.
ADP nonfarm payrolls are out at 0815 ET. Economists who were surveyed expect 118,000 new jobs, up from 77,000 recorded the previous month. This is potentially an important datapoint that will probably be ignored by the market. This just because the ADP number has no bearing on Friday’s government figure that is so closely watched. But you figure ADP has as good a beat on employment trends as the government, right? No matter, the market will in all likelihood ignore this.
Factory orders are out at 1000 ET. The expectation is for an increase of 0.7% month-over-month, less than the 1.5% recorded last month. This too is another potentially important datapoint and it too will be ignored by the market.
That’s because today is ‘Liberation’ Day, apparently with the moniker ‘Make America Wealthy Again.’ President Trump will announce exactly what this means in a Rose Garden address at 1600 ET.
The Bottom Line
Trump is not speaking until after the close — surely by design — but you can expect to see details of his speech leak throughout the day.
We know a few things already, besides the goofy MAWA moniker (how do you even pronounce that?):
Tariffs will obviously be front-and-center here. There will definitely be new tariffs on certain countries and industries, maybe even on all of them;
One item that has investors relieved is news that the US Trade Representative’s office is preparing an across-the-board tariff that would be lower than the 20% previously reported;
The situation is otherwise fluid.
One question is whether there will be a ‘carrot’ to go with the ‘stick’ that is these tariffs. Could today’s announcement include tax breaks for certain industries? Who would benefit from that?
We’ll soon know more. It does look like investors are a little less scared of all this than they were last week.
Housekeeping
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