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Analytics, 13 November 2023

What will drive the markets this week?

On Friday, the dollar saw a decline, and global equities experienced a rebound, propelled by a Wall Street rally fueled by skepticism about potential interest rate hikes. Despite Federal Reserve Chair Jerome Powell’s cautionary remarks about the need for tighter monetary policy to curb inflation, doubts persisted.

MSCI’s global equity performance indicator concluded the day with a 0.76% increase, while major indices on Wall Street surged by 1% or more. The Dow Jones Industrial Average climbed by 1.15%, the S&P 500 saw a gain of 1.56%, and the Nasdaq Composite recorded its most substantial percentage jump since May, adding 2.05%.

European shares faced a decline on Friday, influenced by higher bond yields. Hawkish comments from the U.S. Federal Reserve Chair dampened investor confidence in the belief that interest rates had reached their peak. Additionally, disappointing results from Diageo and Richemont contributed to the negative sentiment. The pan-European STOXX 600 closed 1.0% lower, retracing from the three-week high reached on Thursday, resulting in a marginal weekly decrease.

Asian stocks concluded the day with losses, primarily driven by concerns about China, the world’s second-largest economy. This apprehension resurfaced following Thursday’s data indicating another dip in Chinese consumer prices.

This week, investors should anticipate earnings reports from major retailers such as Walmart, Target, Home Depot, and Macy’s. Additionally, there will be releases of crucial data, including the Census Bureau’s report on national retail sales for October.

In the upcoming days, we will receive updates on consumer inflation and the housing market. This will involve insights from the October Consumer Price Index, details on last month’s housing starts, and the November report of the NAHB’s Housing Market Index.

Adding to economic concerns is the unresolved national budget. To avert a government shutdown, Congress approved a temporary resolution at the end of September, ensuring funding until Nov. 17. However, if Congressional leaders don’t pass necessary spending bills or another temporary resolution by Friday, the possibility of a shutdown becomes increasingly imminent.

Events expected to move the markets this week

Monday, Nov. 13

Tuesday, Nov. 14

Wednesday, Nov. 15

Thursday, Nov. 16

Friday, Nov. 17

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