The focus this week will be on two main events: the release of the latest inflation data and the Federal Reserve’s policy committee meeting. The Federal Reserve will make a decision on interest rates on Wednesday afternoon.
Interest Rate Expectations
Market expectations strongly indicate that there will be no change to interest rates. The Fed officials’ projections on the economy and interest rates will provide important insights into the future direction of monetary policy.
Earnings Reports
This week, we can expect earnings reports from several major companies. Oracle will report on Monday, Johnson Controls International on Tuesday, Adobe on Wednesday, and Costco Wholesale, Lennar, and Darden Restaurants on Thursday.
Inflation Data
On Tuesday, the Bureau of Labor Statistics will release the consumer price index (CPI) for November. Economists predict a 4% year-over-year increase in the core CPI, which excludes food and energy prices. This is consistent with the previous month’s figures. Additionally, the Producer Price Index for November, to be released on Wednesday, is expected to show a slowdown compared to the previous month.
Federal Reserve Announcement
The Federal Open Market Committee (FOMC) is expected to keep the federal-funds rate unchanged within a target range of 5.25%-5.50% on Wednesday. Investors will pay close attention to Chairman Jerome Powell’s press conference in the afternoon, as well as the FOMC’s latest Summary of Economic Projections, known as the “dot plot.” The European Central Bank and Bank of England will also announce their respective monetary-policy decisions on Thursday.
Other Economic Data
In addition to the main events, there is other economic data being released this week. On Tuesday, the National Federation of Independent Business will unveil its Small Business Optimism Index for November. The Census Bureau will release retail sales data for November on Thursday, and S&P Global will announce the Manufacturing and Services Purchasing Managers’ Indexes for December on Friday.
Schedule of Earnings Reports and Data Releases
- Monday 12/11: Oracle reports second-quarter fiscal 2024 results.
- Tuesday 12/12: Johnson Controls International announces fourth-quarter fiscal 2023 earnings. The Bureau of Labor Statistics releases the consumer price index for November.
- Thursday 12/14: Census Bureau releases the retail sales data for November.
- Friday 12/15: S&P Global announces the Manufacturing and Services Purchasing Managers’ Indexes for December.
The National Federation of Independent Business: Small Business Optimism Index for November
The Small Business Optimism Index for November, released by The National Federation of Independent Business, is set to equal the October figure of 90.7, according to economists’ forecasts. It is worth noting that the index has remained below its 50-year average for an uninterrupted period of 22 months.
Adobe: Fourth-Quarter Fiscal 2023 Results
Adobe has announced its fourth-quarter fiscal 2023 results.
The Federal Open Market Committee: Monetary Policy Decision
The Federal Open Market Committee has shared its monetary policy decision. It is widely expected that the FOMC will maintain the federal-funds rate at its current range of 5.25%-5.50%. With the consensus being that there will be no further rate hikes in this cycle, the focus on Wall Street now revolves around how many times the Fed will lower interest rates in the coming year. Traders are currently pricing in at least one percentage point worth of rate cuts by the end of 2024.
The BLS: Producer Price Index for November
The Producer Price Index for November, released by The BLS, is anticipated to show a 1% year-over-year increase, while the core PPI is expected to rise by 2.2%. These figures compare to October’s gains of 1.3% and 2.4%, respectively.
Thursday 12/14
Costco Wholesale and Lennar Quarterly Results
Both Costco Wholesale and Lennar are scheduled to release their quarterly results.
The European Central Bank and Bank of England: Monetary Policy Decisions
Both the European Central Bank and the Bank of England are expected to maintain their target interest rates steady at 4% and 5.25%, respectively, as they announce their monetary-policy decisions.
The Census Bureau: Retail Sales Data for November
The Census Bureau is set to report retail sales data for November. Market consensus predicts a 0.1% decline in retail spending compared to the previous month, matching October’s drop. Excluding automobile sales, it is expected that sales will remain flat after increasing by 0.1% in October.
Friday 12/15
Darden Restaurants: Conference Call for Second-Quarter Fiscal 2024 Earnings
Darden Restaurants will hold a conference call to discuss its second-quarter fiscal 2024 earnings.
S&P Global: Manufacturing and Services Purchasing Managers’ Indexes for December
Both the Manufacturing and Services Purchasing Managers’ Indexes for December, released by S&P Global, are forecasted to be 49.3 and 50.5, respectively. In November, these indexes recorded figures of 49.4 and 50.8.
