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What will influence markets during the week?

The last week for November will provide a lot of corporate reports and economic events. The question is: "Will the market recover are three consecutive weeks of decreases?"

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The global market ended the last week on red, with Wall Street stocks wiping out about 4% and reporting its worst Thanksgiving week since 2011. The blue-chip index Dow Jones Industrial Average wiped out 4.4% to 24,285.95 points, while broader index S&P 500 decreased by 3.8% and the technology Nasdaq Composite dropped by 4.3%.

S&P 500

What happened during the last week?

The US government intends to tighten export controls in 14 high-tech areas, including artificial intelligence and microprocessor technology. Before completing the plans, however, there are 30 days for public consultation. The deadline expires on December 19. This move should be directed against China. The Chinese government has already announced its intention to oppose the measures.

The US Trade Representative Robert Lighthizer presented an interim report stating that the current US duties have not made China make concessions in its practices. It is about updating a 53-page report on the investigation of China’s intellectual property practices under Section 301 of the 1974 Commerce Act. This inspection together with the initial March report provided the US President Donald Trump a legal basis to impose duties on almost half of all imports from China.

The EU, China, Canada, Mexico, Norway and Russia have asked the WTO arbitration tribunal to decide on the legality of the US duties on steel and aluminum products. The main question is whether the US arguments that justify customs with questions about national security are correct.

During the week, the EU approved unilaterally the Brexit agreement. This confirms the British exit from the European Union in March 2019, but keeps the door open for transition period of “one or two years”.

As expected, the European Commission rejected the Italian government’s revised budget. The project is in breach of EU rules, so the start of a deficit procedure against the country is “guaranteed”, according to the European Commission Vice President Valdis Dombrovskis.

Meanwhile, the fall in oil prices continued. Whether the OPEC will cut production is likely to be decided at the next cartel meeting on December 6th. Saudi Arabia has again called on other OPEC countries to cut their yields.

The OECD cut its forecast for the growth of the global economy. The global economic output will increase by only 3.5% over the next two years. Previously, it expected growth of 3.7% in 2019. The OECD justified the revision downwards with the escalation of the trade dispute and increased tensions in the financial markets.

Upcoming Macro-economic Data

Among the more important data that will be in focus during the week are the business climate in Germany, consumer confidence and preliminary GDP data in Q3 2018 in the US as well as Eurozone inflation.

On Monday, November 26, will be published the retail sales data for New Zealand for Q3 2018. Also the markets will watch the interviews of the European Central Bank Governor Mario Draghi and the Governor of the Bank of England Mark Carney.

In Germany, clarity about the business climate in the country is expected through the Ifo Institute index. Consensus forecasts for analysts are for level of 102.3 points against 102.8 points reported a month earlier.

On Tuesday, November 27, will be posted the data on New Zealand’s trade balance for October. Later, glances will focus on US consumer confidence data.

On Wednesday, November 28, the day will begin with Germany’s GfK consumer confidence index for December. The focus of the markets will be on a series of macroeconomic data for the US, including preliminary GDP data for the third quarter, sales of new homes, crude oil reserves, and etc. Also there is a planned statement of the Federal Reserve Chairman Jerome Powell.

On Thursday, November 29, will be published a number of data on the labor market in Germany, as well as preliminary data on inflation in November. In the US, markets will track the number of unemployment claims and the report of the last Federal Reserve meeting.

On Friday, November 30, China will release PMI in Industry for November. The consensus forecast is for a slight improvement in business activity in the sector to 50.6 points compared to the reported 50.2 points in October.

Preliminary forecasts show that retail sales in Germany will grow 0.3% in October compared to a 0.1% rise in September.

Also market participants will watch for the Eurozone inflation data for November and unemployment for October.

Upcoming corporate reports

The reporting season is close to its end, but this week will have interesting events in offshore drilling and shipping sector.

On Monday, November 26, will be published the finance reports of Diana Shipping, Energold Drilling and world’s largest solar panel manufacturer JinkoSolar Holding. Also during the day are expected the finance statements of Corporacion America Airports, Enanta Pharmaceuticals and Exco Technologies.

On Tuesday, November 27, will be released the earnings report of American cloud-based software company Salesforce.com, as well as offshore drillers Seadrill Limited and KNOT Offshore Partners. During the day will be released the statements of Evoqua Water Technologies, Micronet Enertec Technologies, Banco Macro and Destiny Media Technologies.

On Wednesday, November 28, will be posted the reports of Royal Bank of Canada, Tiffany & Co and Veeva Systems. Also the markets will watch the statements of Guess? Inc, Sina Corporation and Russian multinational energy corporation PJSC Lukoil.

On Thursday, November 29, will be the day of technology. During the day will published report for another leader in cloud-based platforms VMware, as well as software developer Splunk Technology. Also are expected the finance statements of the technology giants HP Inc and Dell Technologies Inc.

On Friday, November 30, will be published the report of Citi Trends and Fang Holdings.