Geoffrey Smith 

Investing.com — Two-day Federal Reserve meeting begins. It is anticipated that the Federal Reserve will end with a half-point increase in U.S. rates. Australia’s central banks jumped on the bandwagon overnight with a 25-basis point increase. Pfizer, DuPont, AMD and other earnings are published by the Labor Department. Beijing tightens their lockdown, and oil prices drop some of Monday’s gains. Oil companies then take the opportunity to make the highest earnings for years in underlying terms. This is what you need know for financial markets Tuesday, May 3rd. 

1. Fed launches two-day meeting after RBA leaps to the front

The and U.S. bond yields eased slightly as the market settled down to wait for the outcome of the Federal Reserve’s two-day meeting, which starts later Tuesday.

The expectation of a half point increase in the Fed funds target range from 0.75 to1.00% is almost universal. This means the main variable that will emerge of the meeting’s meeting will be unwinding two years worth of bond purchase. Various Fed officials have called for an early start to active sales from the Fed’s bond portfolio to keep the yield curve slope positive.

It’s a busy week for central banks in the Anglosphere, with the Bank of England expected to give its own signal on quantitative tightening on Thursday. In Australia, the Reserve Bank of Australia unexpectedly increased its overnight rate of 0.7%, The currency is down 6% over the past month.

2. JOLTS survey, factory orders due

This week, the Labor Department will release the first three major labor market indicators. The monthly reports are due at 10. Recently, surveys show that vacancies have reached record levels despite companies complaining about a shortage of skilled workers. A high job turnover can also be associated with better earnings as many take advantage of these shifts in order to increase their income.

Also, March is due by 10:01 AM.

Overnight data releases from Eurozone showed that the Eurozone ran at an annual rate of growth in March and that the German labor market improved in April.

3. Stocks remain steady in the face of an earnings flood. AMD, Starbucks and Airbnb will report late

A new slew earnings will be available to a market still feeling jittery, which has only recovered half its Friday losses. Stocks are set to open flat to lower later, despite some impressive performances by Monday’s late reporters.

NXP, Avis, and Clorox all beat earnings expectations. Williams was the pipeline company. Both companies ruled out production increases of large magnitude in the near term and instead used their increased cash flows to improve their balance sheets.

At 6:20 AM ET they had dropped 26 points (or less than 0.1%) while the 0.1% were up and the 0.2% were down.

On Tuesday, early reporters include pharmaceutical giants Pfizer (NYSE:) and Biogen (NASDAQ:), industry facing bellwethers Rockwell and DuPont (NYSE:), and financial giant S&P Global (NYSE:) (for the first time after consolidating IHSMarkit).  AIG (NYSE) and Caesars are also on the list of late reporters.

4. Beijing locks down; Ma panic strikes Alibaba

The lockdown in China’s capital is getting gradually tighter. Beijing asked citizens not to leave Beijing and delayed the opening of schools due for Thursday following the three-day holiday.

South China Morning Post published reports of authorities in Hebei, a neighboring province, preventing people from leaving their houses. It is another sign of the strains that the Zero Covid official policy has caused (reaffirmed by President Xi Jinping last week).

China’s other news: Alibaba shares fell 9% overnight after reports surfaced that Hangzhou police had arrested the Alibaba founder Jack Ma. The stock rebounded when it transpired that it wasn’t Alibaba founder Jack Ma, but the incident illustrates the fragility of market sentiment.

5. API gains outperforms oil; BP suffers a big loss due to Russia’s exit, but increases its buyback

After rising Monday, crude oil consolidated in anticipation of a meeting with OPEC and its allies about increasing output.

BP (NYSE) CEO Bernard Looney stated that he expects the Russian crude oil shortage to increase by at least 2 million barrels per day due to the cumulative effect of Western sanctions. These are expected to tighten later in the week. Diamondback (NASDAQ) disappointed anyone who was expecting a significant increase in U.S. oil production. Devon Energy (NYSE:) They have reiterated their commitment to balance-sheet repair.

BP suffered a loss of $25 billion on the Russian business. However, it increased its buyback when underlying cash flows improved dramatically.

At 6:30 AM ET futures had fallen 1.1% to $104.06/barrel, and 1.1% to $106.41/barrel. The American Petroleum Institute’s are due at 4:30 PM ET.