Weekly Market Outlook: Focus on November U.S. CPI; Oracle, Broadcom Earnings Impact on AI Stocks
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Insights - With less than four weeks left until the end of 2025, global markets are gearing up for a busy week filled with key economic data releases. Among them, the U.S. November CPI report is expected to take center stage. Current market consensus anticipates a modest uptick in headline CPI from 2.6% to 2.7%, while core CPI is forecasted to remain steady at 3.3%. Should the data exceed expectations, it could dampen market expectations for a December rate cut by the Federal Reserve. Meanwhile, central banks from Europe, Canada, and Australia are set to announce their respective rate decisions this week, with significant divergence in market expectations. The European Central Bank (ECB) is widely expected to cut rates by another 25 basis points. Meanwhile, earnings reports from companies closely tied to the AI ecosystem, such as Oracle, Broadcom, C3.ai, and Adobe, could sway sentiment around AI-related stocks.
Last week, November U.S. nonfarm payrolls surprised to the upside, adding 227,000 jobs, marking the largest increase since April and surpassing the market forecast of 200,000. October’s figure was also revised upward from 12,000 to 36,000. These robust labor market figures indicate that the U.S. job market remains in a rebalancing phase. While the Fed is still expected to cut rates in December, uncertainties loom over the pace of rate cuts in 2025, partly due to potential tariff impacts. At the New York Times DealBook Summit, Fed Chair Powell reiterated that the central bank is not in a rush to lower rates, citing inflation uncertainties and stable economic performance. He emphasized the Fed’s cautious approach to finding a “neutral rate.” Meanwhile, President-elect Donald Trump stated in a media interview that he has no plans to replace Powell as Fed Chair.
U.S. November CPI
CPI data due Wednesday (Dec. 11) is expected to show a slight increase, with core inflation steady at 3.3%. Analysts at BNP Paribas believe the Fed will proceed with a December rate cut, even if inflation slightly exceeds forecasts, given restrictive current rates and 2024 guidance.
ECB Rate Decision
The ECB is expected to cut rates by 25 basis points on Thursday (Dec. 12). President Lagarde recently struck a dovish tone, signaling economic risks and the need for bold policy action. Some analysts see a 20% chance of a larger 50-basis-point cut, citing weakening PMI and slowing inflation in services.
Earnings to Watch: AI Stocks in Focus
Major AI-related companies, including Oracle, Broadcom, C3.ai, and Adobe, will report earnings this week. Oracle and Broadcom are expected to benefit from strong AI and cloud demand, while Adobe faces pressure to prove its AI relevance. Other notable reports include GameStop and Costco.
Key Economic Data
Tuesday: Australia RBA rate decision.
Wednesday: U.S. November CPI; Canada rate decision.
Thursday: ECB rate decision.
Key Earnings
Monday: Oracle, C3.ai
Tuesday: GameStop
Wednesday: Adobe, Macy’s
Thursday: Broadcom, Costco
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