5 things to watch in the market in the coming week Investing.com

© Reuters

Noreen Burke

Investing.com-Investors will pay close attention to the minutes of the Fed meeting on Wednesday to understand the impact of rising inflation on the path of future interest rates. The market is also waiting for President Joe Biden’s announcement that he will lead the U.S. Central Bank and is expected to make a decision before the Thanksgiving holiday on Thursday. A series of US economic data will be released before the holiday on Wednesday, and PMI data for the Eurozone, the UK and the US this week will outline the impact of supply chain issues and inflation on business activities. At the same time, Black Friday kicked off a crucial holiday shopping period. This is the knowledge you need to start the new week.

  1. Fed meeting minutes

On Wednesday, the Federal Reserve will release the results of its November meeting, during which policy makers decided that the US economy is strong enough to start scaling back its pandemic asset purchase program to support recovery.

Since then, economic recovery has continued to accelerate, employment growth has accelerated, and inflation has continued to soar, leading to a call last week to discuss speeding up downsizing so that the Fed can raise interest rates faster.

Last Thursday, Chicago Fed President Charles Evans, known as a policy pigeon, stated that he was “more open” to raising interest rates next year than six months ago. In addition, Atlanta Fed President Raphael Bostic (Raphael Bostic) has expressed support for interest rate hikes in mid-2022.

The Fed will release new quarterly forecasts after the next meeting in mid-December. These forecasts may provide a better understanding of how much policymakers’ views have changed.

  1. Biden’s Fed Choice

The White House said last week whether President Joe Biden would re-elect current Fed Chairman Jerome Powell or promote current Fed Chairman Lyle Brainard to the post before Thanksgiving.

Analysts expect some volatility in the stock market before and after the announcement, especially if Brainard is chosen.

Powell’s term will end in February next year, and he was appointed by then President Donald Trump in 2018. Brainard, who has served on the Fed’s board of directors since 2014, is favored by the Progressive Democrats and is considered more moderate than Powell.

If Brainard is appointed, the market may re-price the timing of future interest rate hikes, and the prospect of longer periods of lower interest rates may lead to a sell-off of US Treasuries due to rising inflation expectations.

  1. US data dump

The United States will release a series of economic data on Wednesday before the market is closed on Thursday. The focus will be on and data, including rumors that it is an inflation indicator favored by the Fed.

The economic calendar also includes revised data for the third quarter, ,, and.

It is expected that reports on PMI data for November and November will be released on Monday and Tuesday, respectively, and only moderate improvements are expected.

  1. Purchasing Managers Index

Although US PMI data for November is expected to show a moderate increase in business activity, similar surveys from the United States and the United States are expected to show that manufacturing and service industry activities are slowing down.

The rising number of infections has led to the re-implementation of restrictions in some parts of Europe, while soaring natural gas prices are fueling inflation, and the tightening of global supply chains has made the situation worse.

The European Central Bank is facing increasing pressure to tighten its ultra-loose monetary policy to offset the blow to household spending power, but ECB President Christine Lagarde has fought back, saying it is now tightening Policies may stifle economic recovery.

At the same time, the Bank of England appears to be the first major central bank in the world to raise interest rates since the outbreak of the pandemic, and investors and economists are expected to raise interest rates at the upcoming December 16 meeting.

  1. Black friday

Against the background of soaring inflation and shortage of supply, the holiday shopping season officially kicked off on Friday.

Some people worry that high inflation may erode consumer spending, but the surge in data in October suggests that Americans started shopping early to cope with supply shortages. Strong third-quarter retail earnings also added positive signs of holiday shopping.

“One of the trends we saw in third-quarter earnings was the strong momentum of American consumers,” Easterly Investment Partners portfolio manager Jessica Bemer told Reuters on Friday.

“This week, we heard from retailers about consumers returning to the store, enjoying the shopping experience and preparing for the holidays. This makes sense, but it was verified during the earnings season.”

——Reuters contributed to this report

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