◊ 5 Things To Know Before The Stock Market Opens ◊
1. Trump to Speak at Economic Club of New York
On Tuesday, Trump will deliver remarks at the Economic Club of New York with markets hoping for more clarity on a planned “phase one” deal. Trump on Friday said he has not agreed to rollbacks of U.S. tariffs sought by China, sparking fresh doubts about when the world’s two largest economies may end a 16-month trade war that has slowed global growth.
His comments came a day after officials from both countries said China and the U.S. had agreed to roll back tariffs on each others’ goods in a “phase one” trade deal. U.S. stocks dipped after Trump’s comments, and the dollar fell against the yen, stalling a rally fueled by trade deal optimism that took major indexes to record levels.
2. Powell Testimony
Investors will hear directly from Fed Chair Jay Powell on the U.S. central bank’s outlook on the economy, inflation and monetary policy when he testifies before the congressional Joint Economic Committee in Washington on Wednesday and the House Budget Committee on Thursday.
He is expected to reiterate that plans for further easing are now on hold after the Fed cut rates last month for the third time in as many meetings.
Market watchers will also have the chance to hear from no less than eight other Fed officials who are speaking this week, including New York Fed head John Williams, who said on Friday the U.S. economy is in a good place, reiterating his view that the interest rate cuts made this year should appropriately address potential risks to the economy.
3. U.S. Economic Data
A fresh round of U.S. economic data will be closely watched at a time when markets are trying to gauge the impact of the trade conflict on the outlook for growth.
Wednesday brings October’s Consumer Price Index. Core year-on-year CPI is expected at 2.4% and headline at 1.7%. But the Fed’s favorite measure of core personal consumption expenditures is running around 1.6% – hovering mostly below the 2% target since pre-financial crisis.
On Friday, October retail sales and industrial production data will shed light on whether the consumer can continue to drive growth in the face of a struggling manufacturing sector and months of trade tensions.
4. Global Growth Update
Several countries from Germany to Japan will release third-quarter growth data in coming days. Figures from Germany on Thursday will show whether the Eurozone’s largest economy slid into a recession in the third quarter.
In the U.K., data on Monday is expected to show that the economy narrowly avoided a recession after a 0.2% contraction in the previous quarter. But a high degree of economic uncertainty looks set to persist, prompting Bank of England to indicate last week that it’s ready to cut rates in the event of a no-deal Brexit.
Japan is to release third quarter GDP figures on Thursday, amid forecasts for a slight slowdown from the previous quarter.
5. Alibaba eyes another record Singles Day
Alibaba Group (NYSE:BABA) will kick off its annual 24-hour shopping extravaganza on Monday with deals and deep discounts galore, and a performance by Taylor Swift, as it pushes to rake in another record Singles’ Day sales.
This year’s event comes as the Chinese retail juggernaut navigates through a major turning point, the resignation in September of its flamboyant co-founder Jack Ma as chairman, and looks to raise up to $15 billion via a share sale in Hong Kong as early as this month.
Alibaba saw sales worth $30 billion on its platforms on Singles’ Day last year, dwarfing $7.9 billion U.S. online sales for Cyber Monday. But the 27% sales growth was the lowest in the event’s 10-year history, after ranging from 40% to even 100% in previous years.
“This is likely due to the slowdown of the overall economy [in China]. There might not be a big jump in growth this year, even if people tend to buy things,” said Jennifer Ye, China consumer markets leader for PwC China.
“PwC expects Singles’ Day sales to rise moderately this year, albeit at a slower pace compared with the last few years as macroeconomic uncertainty continues to weigh on consumer confidence.”
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