Traders look to data as Fed confuses

What will break the market’s calm?
What will break the market’s calm?   

Traders will be watching durable goods orders and jobless claims Thursday, while they continue to seek clarity on the Fed's rate hiking plans.

St. Louis Federal Reserve President James Bullard speaks ahead of the market open, at 8:15 a.m., ET, to the New York Association for Business Economics on the economy and policy. Bullard's remarks in an interview Wednesday were the latest from a Fed official to suggest that the Fed could raise rates as early as April.

Read MoreMarkets getting ready for a Fed rate hike soon

NYSE Traders
Brendan McDermid | Reuters
NYSE Traders

To traders, the comments from Bullard and several other Fed officials, such as Philadelphia Fed President Patrick Harker, contrast with the dovish message sent after the Fed's last meeting. Last week, the Fed took no action on rates and slightly downgraded its view on the economy. The forecasts of Fed officials also showed that most members now favored two rate hikes this year, versus an earlier forecast of four hikes.

"It's really been difficult to match up what's going on this week with what they said last week," said Tom Simons, chief money market economist at Jefferies. "They are trying to keep the market on its collective toes by suggesting the April meeting is live." There had been little weight given to the possibility of an April rate hike, and many economists expected the next chance the Fed would have to move would be June since there is a press briefing after the meeting. Fed Chair Janet Yellen, however, has made it clear the Fed could call an impromptu press briefing and hike at any time.

Markets taking Fed commentary in stride: BlackRock
Markets taking Fed commentary in stride: BlackRock   

"This is the most fouled up communication I've ever seen, and the fallout from the miscommunication is hard to find…Nobody's pointing fingers...the bond market is not going into a tizzy," said Chris Rupkey, chief financial economist at MUFG Union Bank.

The Fed officials' comments added support to the dollar which was moving higher as commodities sold off. "I think it's still lingering out there that the Fed can't go very far in the opposite direction of the Bank of Japan, and the ECB, and the Bank of England," he said.

Read MoreFed rate hike expectations jolting currencies

As for the data, durable goods are expected to decline 3 percent, while weekly jobless claims are expected to rise slightly to 268,000 when they are released at 8:30 a.m., ET. There is also Market Services PMI at 9:45 a.m., ET.

Rupkey said within the durable goods data, he expects to see nondefense orders, ex aircraft, show some stability even if it moves slightly lower. That number is seen as a proxy for business spending.

The stock market is open regular hours ahead of the Good Friday holiday, but the bond market closes early at 2 p.m., ET. Earnings are expected from Accenture, Signet Jewelers, Winnebago and GameStop.

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