Weekly Market Outlook: Key Focus on U.S. October PCE and Fed Minutes

Insights – This week, all eyes are on the U.S. October PCE data and the Federal Reserve’s November meeting minutes, both scheduled for release on Wednesday. The core PCE price index, a preferred inflation measure for Fed officials, will provide further clues about the Fed’s future monetary policy. On Friday, the Eurozone will release its November CPI, a key report as markets widely expect the ECB may accelerate its rate-cutting pace, potentially lowering rates by 50 basis points in December to support the struggling economy.  

On the corporate front, as NVIDIA’s earnings marked the tail end of the Q3 earnings season, upcoming reports from Dell Technologies, HP, and Meituan are worth noting. Additionally, U.S. equity markets will be closed on Thursday for Thanksgiving and will close three hours early on Friday.  

Last week, the University of Michigan’s final November Consumer Sentiment Index rose 1.3 points from the previous month to 71.8, the highest level since April, but fell short of the preliminary reading of 73. The report also showed consumer inflation expectations for the next year dropped to 2.6%, the lowest since 2020.  

Market sentiment has shifted following Donald Trump’s victory in the U.S. presidential election, with expectations for the Fed’s rate-cutting pace adjusting accordingly. Chicago Fed President Austan Goolsbee expressed support for further rate cuts while remaining open to slowing the pace of easing.  

NVIDIA’s Q3 net income surged 109% year-over-year to $19.31 billion, with management noting that the Blackwell product series will remain in short supply over the coming quarters. However, the company did not provide specific revenue guidance for Blackwell in its earnings report.  

Fed Meeting Minutes

On Wednesday, the Federal Reserve will release the minutes from its November monetary policy meeting. Markets will closely analyze commentary on inflation, policy stance, and the economic outlook.  

At the November meeting, the Fed implemented its second rate cut of the year, lowering the benchmark rate by 25 basis points to a range of 4.5%-4.75%. The statement reflected a slight shift in tone, with the removal of language expressing “greater confidence that inflation is sustainably moving toward 2%.” Additionally, the description of employment growth was softened from “slowing” to “labor market conditions broadly easing,” signaling reduced concerns about inflation and labor market cooling.  

HSBC economists noted in a report that political factors, such as the U.S. election, are increasing uncertainty around the Fed’s future policy decisions. The minutes may also shed light on internal discussions about the potential economic impact of the election outcome.  

U.S. October PCE Data

The U.S. will release October PCE data on Wednesday. Last month’s data showed the core PCE price index rising 2.2% year-over-year, exceeding expectations.  

Following Trump’s election victory, the Fed’s stance on rate cuts has grown more cautious. With Trump pushing for tax cuts and higher tariffs, there are widespread concerns on Wall Street that inflationary pressures could rise further over the next year.  

Nomura Securities has become the first major investment bank to predict the Fed will pause rate cuts in December. Analysts believe that recent Fed communications have emphasized patience, and both economic growth and inflation data appear more hawkish compared to the September Fed meeting.  

Eurozone November Harmonized CPI

The Eurozone will release its November harmonized CPI on Friday, which could provide further guidance on the ECB’s monetary policy. Last month, the ECB implemented its third rate cut of the year, lowering rates from 3.5% to 3.25%.  

Recent months have seen inflation in the Eurozone decline more sharply than expected. For the first time since June 2021, annual inflation has fallen below 2%, a level the ECB has called “optimal for price stability.”  

Some analysts remain optimistic about the European market, believing that the inflationary impacts of Trump’s policies will gradually fade, leading to a retreat of the so-called “Trump trade.”  

Key Economic Data

Tuesday: U.S. November Conference Board Consumer Confidence Index  

Wednesday: U.S. October Core PCE Price Index (YoY)  

Friday: Eurozone November CPI Flash Estimate  

Key Economic Events

Monday: Speech by Bank of England Deputy Governor Ben Broadbent  

Wednesday: Release of the Federal Reserve’s November Meeting Minutes  

Friday: Speech by ECB Vice President Luis de Guindos  

Key Earnings to Watch

Monday: Zoom (ZM.O)  

Tuesday: HP (HPQ.N), Macy’s (M.N), Dell (DELL.N)