Day Ahead: Top 3 Things to Watch for March 18

By Kim Khan

Investing.com - The U.S. stock market managed to bounce back today, with the S&P 500 rising 6% and the CBOE Volatility Index falling 8% and retreating from record territory.

Wall Street was all about “what have you done for me, lately?” and the Trump administration and the Federal Reserve gave them enough to go on, with commitment to a stimulus package that could be more than $1 trillion, including checks in the mail, and the Fed stepping in to unfreeze the commercial paper market.

Wednesday looks to be more than same as far as overall sentiment hinging on more details of government action.

Here are three things that could move the markets.

1. Market Still Thirsty for Details

Equity investors will be looking for more concrete details and action regarding federal government help for the economy.

The initial Covid-19 response bill of the House still has to be approved by the Senate, although Majority Leader Mitch McConnell says the upper chamber will pass it without changes.

And there are more details on the second package floated by Treasury Secretary Steve Mnuchin, such as how much would come in the form of checks sent directly to taxpayers and when (Mnuchin said in two weeks but reports said late April more likely).

Among sectors to watch will be airlines, which have asked for $50 billion, and travel and hospitality stocks, which could also get help in the package.

In addition, Boeing (NYSE:BA), which has been a serious drag on the Dow, wants tens of billions of dollars in guaranteed loans to meet liquidity needs, Reuters reported. President Donald Trump said he “absolutely” wants to help Boeing.

And retailers will also be in focus to see what actions they are taking. Macy’s (NYSE:M) said it is temporarily closing stores, as will Nordstrom (NYSE:JWN).

2. Housing Starts Arrive as Housing Stocks Hammered

Housing numbers arrive tomorrow, important for a sector that’s been battered not just on the prospects of a U.S. recession, but of a new landscape where potential buyers could be unable to view properties for months.

KB Home (NYSE:KBH) is down 65% in the last month, while DR Horton (NYSE:DHI) and Lennar (NYSE:LEN) are have fallen about 50%.

The Commerce Department will report on groundbreaking of new homes at 8:30 AM ET (12:30 GMT).

February housing starts are expected to fall to an annual rate of 1.5 million, according to economists’ forecasts compiled by Investing.com.

Building permits are also seen falling to a rate of 1.5 million for the month.

The housing sector is also on the radar of the government, with the Trump administration considering allowing homeowners to delay mortgage payments.

3. Oil Inventories on Tap

U.S. oil inventories arrive tomorrow at a time when oil traders are also grappling with an unprecedented situation.

Saudi Arabia is dumping millions of barrels of crude on the market at a time when demand is cratering.

The Energy Information Administration will report the latest weekly crude stockpiles numbers at 10:30 AM ET (14:30 GMT).Crude inventories are expected to have risen by about 3.26 million barrels for the week ended March 13, according to forecasts compiled by Investing.com.

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