Earnings from dozens of companies could set the tone Thursday, but analysts are looking at the action in markets themselves.
On Wednesday oil again defied expectations and moved higher, serving as a positive force for stocks and a negative one for bonds. Stocks were slightly higher, with the S&P 500 up almost 2 points at 2,102, and the Dow up 42 at 18,096.
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"What's not to like here?" said Ari Wald, technical analyst at Oppenheimer, of the stock market. "We're expecting the market to break higher." The S&P is closing in on its all-time high of 2,134, set in May 2015.
Wald said he believed the market had shaken off a "bear market" that occurred between the time that high was set last May and February, when risk assets bottomed and began to turn higher.
As for Treasurys, the 10-year yield had a big move Wednesday of between 1.75 percent to 1.86 percent.
"Why on a day when there's no Fed speak, and the only data is existing home sales, why on earth would the bond market have a breakout technical day?" said David Ader, chief Treasury strategist at CRT Capital. "It was clearly a risk-on day. Argentina brought this big debt and it rallied hugely. Clearly, risk is upon us."
Ader said the 10-year yield set a lower low and a higher high than Tuesday.
"An outside event is an important technical event, and this is a particularly important one. The range is even bigger than the day before," he said. Ader said his target on the 10-year had been 1.87 percent but could now move to 1.90 to 1.92 percent.
"This is not a Fed story. I guess to some degree, it's an oil story," he said.
Oil was up nearly 4 percent, while many analysts had expected it to trade lower after OPEC and non-OPEC nations failed to strike a deal to freeze output over the weekend. Since then, Russia, Venezuela and Saudi Arbia all said they could pump more — normally a negative. West Texas Intermediate futures for May rose to $42.63, the highest close of the year.
Analysts said oil was somewhat boosted by a drop in distillate inventories, but also by weekly data that showed another 24,000 barrel decline in U.S. oil production to 8.9 million barrels a day.
"I think the market continues to push higher on expectations that we'll see reduced production levels from U.S. drilling," said Gene McGiliian, analyst with Tradition Energy. But the trend in production had been heading in the same direction for weeks, and the government data brought no real surprise, he added.
"We saw another wave of technical buying. We saw a record amount of open interest in Brent," he said.
"I think we'll continue to see speculative length. There's a lot of money pushed into commodity funds in the past week. It seems as if a lot of the fears we saw earlier this year and the slowing economic conditions, particularly in China, seem to have evaporated," said McGililan.
"Even though we didn't' get a production freeze – a lot of people are banking on this expectation that the production cut is going to come from North America."
Energy stocks gained 0.8 percent Wednesday, and is one of the top three major sectors year-to-date, up more than 10 percent.
"If that was a bear market…what we would expect to see is that resumption of strength," said Wald, noting the move in the energy names supported his thesis. "We'd expect to see internal breadth broaden. We'd expect to see leadership by the major broader names, credit conditions improve and commodities stabilize. We're seeing all of that."
Wald said the advance/decline line was at its highest level since February.
Paul LaRosa, technical strategist at Maxim Group, said there could be a sell-off in the offing after the recent run up, but it would be shallow if so.
"It's much better quality than the rally we had last fall. I'm much more encouraged that any dip that comes will be much more controlled will be met with buyers. But I don't think we break to new highs and go substantially higher. We've had such a good run it makes sense we had a broader correction," said LaRosa.
Some analysts expect to see the first quarter mark the trough of the earnings recession.
"If there was concern about the earnings season, it was already priced into the choppy behavior we had in the first quarter. We're still in a place where a lot of people missed this move. A lot of institutional accounts are underinvested. I think we'll continue to climb this wall of worry. There's still some skepticism in this advance. We're still far from extremes," said Wald.
Earnings are expected Thursday morning from General Motors, Novartis, Biogen, Travelers, Blackstone, Bank of NY Mellon, Under Armour, Union Pacific, Alaska Air, Southwest Air, KeyCorp and Quest Diagnostics. Google parent, Alphabet and Microsoft report after the close.
There are also jobless claims and the Philadelphia Fed survey, both at 8:30 am. EDT. FHFA home prices are released at 9 a.m. EDT, and leading indicators are reported at 10 a.m. EDT