In this holiday-shortened week, investors’ attention will be split between the Federal Reserve’s Minutes from its last policy meeting, published on Tuesday, and Nvidia’s (NVDA) earnings report, due after Tuesday’s close. Nvidia’s quarterly results will provide clues for the short-term outlook for the whole semiconductor industry, and the changes in volumes of AI-related infrastructure investments.
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The release of the Minutes of the Federal Open Market Committee (FOMC) is usually a very important market-moving event, where investors gain insight into the Fed members’ decision-making and get some clues about the outline of its future policy. This time, however, it may be less impactful, as the economic data published after the central bank’s November 1 meeting supported the widely held expectations that the rate-hiking cycle has ended. Particularly, slowing inflation rates and softening job-market data have reinforced the view that the Fed will begin cutting rates as early as May 2024. However, this outlook can’t be taken for granted, as there’s enough time until then for the economic or some other unexpected developments to force the Fed’s hand in either direction. In any case, investors are strongly advised to closely follow economic reports, as these can provide important hints with regards to the future monetary policy, which will strongly affect market moves.
Here are three economic events that could affect your portfolio this week. For a full listing of all upcoming economic events, check out the TipRanks Economic Calendar.
» October’s Durable Goods Orders – Wednesday, 11/22 – This report, released by the U.S. Census Bureau, measures the cost of orders received by manufacturers for durable goods, such as vehicles and electrical appliances. As those durable products often involve large investments, they are sensitive to the economic situation. The report helps assess the state of U.S. production activity and draw an outlook for the demand for big-ticket goods, which is dependent on the forecasted state of the consumer and the economy in general.
» November’s Michigan Consumer Sentiment Index and UoM 5-year Consumer Inflation Expectations – Wednesday, 11/22 – These reports, published by the University of Michigan, portray the results of a monthly survey of consumer confidence levels and consumers’ views of long-term inflation in the United States. The level of confidence affects consumer spending, which contributes about 70% of the U.S. GDP. The inflation expectations index is used as a component of the Fed’s calculations of the Index of Inflation Expectations.
» November’s S&P Global Manufacturing PMI and Services PMI (preliminary readings) – Friday, 11/24 – The Manufacturing PMI captures business conditions in the manufacturing sector, which contributes a significant part of total GDP; thus, the manufacturing PMI is an important indicator of business conditions and the overall economic condition in the U.S. Services PMI captures business conditions in the services sector; it is a crucial indicator since the services sector is responsible for almost 80% of total U.S. GDP. PMI indices are leading economic indicators used by economists and analysts to gain timely insights into changing economic conditions since the direction and rate of change in the PMIs usually precede changes in the overall economy.
