Market This Week: 12/12/2022 - 12/16/2022
Next week's events include the FOMC policy meeting, November retail sales, and CPI inflation.
The U.S. equities markets declined this week as traders weighed worries about a possible recession in the country against the Federal Reserve's more aggressive tightening policy. The S&P 500 lost 3.4%, the Nasdaq declined 4%, and the Dow dropped 2.8% for the week. Early in the week, Treasury yields declined before climbing back up; on Wednesday, the yield on the 10-year note hit a low of 3.4%, the lowest level since September. As demand was pushed down by a rise of COVID-19 cases in China and a weaker forecast for the global economy, crude oil prices dropped to new year-to-date lows. West Texas Intermediate (WTI) crude's price dropped by more than 10% this week, reaching $71 a barrel.
The SEC released new recommendations requiring companies that issue securities to disclose their cryptocurrency exposure to investors as the repercussions of the collapse of the crypto exchange FTX continue to spread. Sam Bankman-Fried, the former CEO and creator of FTX, is scheduled to appear before the House Financial Services Committee on Tuesday.
The Fed's two-day policy meeting and the most recent inflation data, which are coming on Tuesday, will be in the limelight the following week. On Wednesday, central bankers are anticipated to reveal their decision on interest rates and their short-term economic forecasts for the United States. The U.S. Census Bureau will also release a report on November retail sales on Thursday, providing insight into whether consumer spending held steady in November. The flash estimate for S&P Global's Composite Purchasing Managers' Index (PMI) for December will be made public on Friday.
Markets
Source: Investopedia
Key Takeaways
The Consumer Price Index (CPI) for November will be released by the Bureau of Labor Statistics (BLS) on Tuesday, giving the most recent indication of consumer inflation.
Beginning on Tuesday, the Federal Open Market Committee (FOMC) will hold its two-day monetary policy meeting, which will come to a conclusion with a decision on interest rates on Wednesday.
The U.S. Census Bureau will release its report on November retail sales on Thursday, revealing if consumer spending was robust in November.
The flash estimate for S&P Global's Composite Purchasing Managers' Index (PMI) for December will be made public on Friday.
12/12/2022
Consumer Inflation Expectations (Nov)
12/13/2022
Consumer Price Index (CPI) Inflation Rate (Nov)
IBD/TIPP Economic Optimism Index (Dec)
NFIB Business Optimism Index (Nov)
Day 1 of FOMC Policy Meeting
12/14/2022
Import Prices (Nov)
Export Prices (Nov)
Day 2 of FOMC Policy Meeting; Interest Rate Decision and Press Conference
12/15/2022
U.S. Retail Sales (Nov)
U.S. Industrial Production (Nov)
Philadelphia Fed Employment Index (Nov)
Philadelphia Fed Manufacturing Index (Dec)
NY Empire State Manufacturing Index (Dec)
Business Inventories (Oct)
Retail Inventories (Oct)
12/16/2022
S&P Global Composite PMI - Flash Estimate (Dec)
Update on Consumer Inflation
The Consumer Price Index (CPI) for November will be released by the Bureau of Labor Statistics (BLS) on Tuesday, providing the most recent indication of consumer inflation. According to projections, headline prices increased by 0.3% last month, a modest slowdown from the 0.4% increase in October. Prices probably rose 7.6% yearly, less than the 7.7% increase seen in October and below the 9.1% peak in June. Compared to a 40-year high of 6.6% in September, core inflation, which excludes the cost of food and energy, is projected to have slowed to a 6.2% annual rate last month, down from 6.3% in October.
December Policy Meeting of the FOMC
The U.S. Federal Reserve's Federal Open Market Committee (FOMC), which determines interest rates, will wrap up its December monetary policy meeting on next Wednesday. In their continuous endeavor to reduce excessive inflation, Fed officials are generally anticipated to raise interest rates by an additional 50 basis points (bps), putting the federal funds rate as a benchmark in the range of 4.25% to 4.5%. In the fastest tightening cycle in more than four decades, the Fed has increased its benchmark rate by a total of 375 basis points so far this year.
Retail Sales of November
On Thursday, the U.S. Census Bureau will release data on November retail sales, a significant predictor of consumer spending. Following an unexpectedly robust 1.3% growth in October, the largest monthly advance since February, retail sales are predicted to have fallen 0.1% in November. Sales most certainly increased 7.9% over the same time last year. Despite increasing costs that have reduced customers' purchasing power, retail sales have remained strong this year. Due to consumers using a larger portion of their discretionary income to fund their purchases, the personal savings rate has dropped to 2.3%, the lowest level since 2005.