» DE | Weekly | Global Markets | Holiday Shortened Week But Plenty of Market Relevant Indicators – 11/26/19 Decision Economics

DE | Weekly | Global Markets | Holiday Shortened Week But Plenty of Market Relevant Indicators – 11/26/19

Posted November 26, 2019 by rvillareal

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Holiday Shortened Week But

Plenty of Market Relevant Indicators

Allen Sinai

Coming into a Thanksgiving Holiday-shortened week, some themes to note—

  1. a still weak Global Economy and soft U.S. second and third quarter growth with a mixed start to Q4—question is the U.S. economy stuck in a rut or going to pick up heading into the New Year?
  2. still weak non-U.S. economies—Germany, the Eurozone generally, China—concentrated especially in Manufacturing—question is whether the Global Economy is headed for Recession or will there be improvement in coming high-frequency indicators from continuing very stimulative monetary policies and some countries moving toward fiscal policy stimulus?
  3. inflation and inflation expectations still way too low for key central banks who have essentially 2% price inflation targets—will inflation stay low or pick up?
  4. Federal Reserve monetary policy on an asymmetric Hold, i.e., no further interest rate changes unless there is a meaningful change in data affecting the economy and/or inflation. The key here for the economy and stock market, however, is that there will be no increases in the federal funds rate for the foreseeable future.
  5. uncertain Washington politics and Geopolitics—for sure Articles of Impeachment by the House—questions being when and how long the Impeachment Trial and its uncertainty. What is taken for granted is no conviction, then on to the November Election. A sure thing? Not necessarily—a “Black Swan” could occur. The bottom-line here is tremendous uncertainty and potential negative effects on confidence, consumption, and business spending.
  6. trade, trade talks and the “Trade War” with China, a huge lever for high-frequency trading on the ups-and-downs of discussions and chitchat but no Phase One Agreement with China yet—the question is when will this be settled and how? Clear this away and a lot of volatility will be cleared away.
  7. the financial markets, particularly the ongoing Bull Equity Market at or near record-highs and relatively stable interest rates—has the yearend stock market rally run its course and what next for 2020?

These are all questions awaiting answers to come in coming data, Events, negotiations, politics and Election 2020, more than enough issues and uncertainties to hang up, or down, financial markets in the coming thinly-traded week and beyond.

Table 1

Key U.S. and Global Indicators and Events

Nov. 25-Nov 29, 2019

  Release Time (EST) DE / Consensus Comment/Event/Venue
U.S. Powell Speech   Oct Goods Trade Bal   Q3 GDP (2nd)   Oct Pers. Income Oct Pers. Consum. Oct PCE Oct PCE Core Mo 7:00 pm   Tu 8:30 am   We 8:30 am   We 10:00 am We 10:00 am We 10:00 am We 10:00 am Providence, RI   -$71.2 B/ -71B   2.0% / 1.9% y/y   0.2% / 0.3% m/m 0.2% / 0.3% m/m 1.4% / 1.4% y/y 1.7% / 1.6% y/y Greater Providence Chamber of Commerce Annual Dinner     DE at higher end. But not much change. Supportive. Bit of a lift. Well below target. Ditto.
EUR   GER Nov Unem. Rate Nov Flash CPI Nov Ifo Expect. Fr 5:00 am Fr 5:00 am Mo 4:00 am 7.5% / 7.5% 0.8% / 0.8% y/y +0.9 to 92.4 / +1 Tight labor market conditions and low inflation persist amid signs of stabilization.
CHN Nov Man. PMI Nov NM PMI Fr 8:00 pm Fr 8:00 pm +0.2 to 49.5 / +0.3 +1 to 53.8 / +0.9 Activity and sentiment likely rebounded from the slump due to holiday in prior month.
JPN Oct Ret. Sales Oct Unem. Rate Nov Tokyo CPI Oct IP We 6:50 pm Th 6:30 pm Th 6:30 pm Thu 6:50 pm -9.9% / -10.5% m/m 2.4% / 2.4% 0.5% / 0.6% y/y -2.5% / -2% m/m Sales-tax hike weighed on consumption amid continued industrial weakness.
IND Q3 GDP Fr 7:00 am 4.5% / 4.7% y/y Persistent weakness in demand dragged on growth.
KOR BoK Rate Decision Th 8:00 pm Hold at 1.25% / Hold The Bank of Korea (BoK) is expected to follow the Fed’s wait-and-see strategy.