Written by Noreen Burke
Investing.com – Markets await the November jobs report next Friday hoping the data will support the Fed’s decision to moderate the pace of rate hikes. The markets will also closely follow the speech of the Federal Reserve Chairman, Jerome Powell, in the middle of next week. The market is also awaiting inflation data for the Eurozone, and PMI data from China in light of concerns about the rise in coronavirus infections. Here’s the most important thing to know to start the week.
Last week’s Fed minutes data supported expectations of a moderation in the Fed’s interest rate hike. Next week’s jobs data may reinforce these expectations.
Economists expect it to add to the weakest increase since December 2020.
The report is also expected to moderate in , while it is expected to stabilize strongly at the highest rate of 3.7%, which is the lowest in 50 years.
This will be the last report before the last Fed meeting of the year in December.
However, investors are afraid of the most important report, because 5 out of 6 previous reports were stronger than expected, and with a strong reading, there may be concerns about the gains in US stocks.
The head of the Federal Reserve will discuss the economic outlook during the Brookings Conference on Wednesday.
While Jerome Powell has indicated in the past that the Fed may shift towards a lower-than-expected interest rate hike next month, he said that the final interest rate next year will be higher than previously estimated by monetary policy makers.
While the market is waiting for a talk from , and , they will talk on Monday.
The market is also awaiting data, and the Fed’s preferred measure of inflation, and releases both reports on Thursday.
It also announces data, the unemployment claims report, and, from the Federal Reserve.
Wall Street returns to trading after the Thanksgiving holiday, and investors will focus on retailers’ data and how well they performed during the holiday shopping, which is one of the factors that the Fed bases its decision on.
The season of sales came against a backdrop of a heavy blow from high inflation and subdued economic growth. Retailers offered strong discounts in both online and physical stores, which could affect margins in the fourth quarter.
Online shopping rose 2.3% to 9.12 billion on Black Friday, according to Adobe Analytics (NASDAQ:) released Saturday, but the percentage was still below 7.7%.
Retail sales have become a measure of consumer confidence as inflation rises. That is why the retail sales index is down 30% this year, while the S&P 500 is down 15%.
While the US is showing signs of abating, the inflation outlook for the Eurozone is still expected to be stronger than expected.
The Eurozone index reached 10.6% last October, which is 5 times greater than the ECB’s target of 2%.
The European Central Bank raised the interest rate by 75 basis points to 1.5% in the October meeting, bringing the rate to the 200 points raised since last July, which is the fastest pace of tightening ever.
Minutes of the European Central Bank’s October meeting showed that members agreed to raise interest rates further to reduce soaring inflation, but no clear agreement on the pace or final rate.
Markets fluctuate between expectations of 50 and 75 points during the current period, and the market awaits the European Central Bank interest decision on December 15th.
PMI data for China
The market will watch data for China on Wednesday, as virus lockdowns continue to weigh on economic activity.
China said on Friday that it had taken the decision to reduce the amount of money banks must hold for the second time this year, while increasing liquidity to push the economy higher.
Forecast and oil this week:
— This report with input from Reuters