Too Much Stimulus?

What’s in Today’s Report:

• Is There Such a Thing As Too Much Stimulus?
• Is the Market Starting to Price in a Future Less-Dovish Fed?

Stock futures are flat and bond markets are trading in an orderly manner this morning as investors await details on President Biden’s infrastructure plan amid end of month and quarter positioning money flows.

Economic data was mostly positive overnight as China’s CFLP Manufacturing PMI came in at 51.9 vs. (E) 51.0 while German Unemployment met estimates at 6.0% and the Eurozone HICP Flash for March was 1.3% vs. (E) 1.3%.

Today, we will get our first look at March jobs data via the ADP Employment Report (E: 500K) and the market will be looking for a number that is not “too hot” to cause another leg higher in bond yields which would weigh on tech stocks but not too underwhelming to suggest the recovery in the labor market is beginning to lose momentum.

There is one other second tiered economic report: Pending Home Sales Index (E: -3.0%) and one Fed official scheduled to speak: Bostic (10:45 a.m. ET) but neither should move markets.

The main focus of the market today will be Biden’s two-part infrastructure plan which is expected to top $4T total and how the Administration and Congress plan to pay for it (higher taxes). If the plans push yields higher, expect some pressure on equities with tech underperforming however stocks are also susceptible to volatility linked to end of month/quarter positioning today.