Stock market outlook, week of November 26

This week is getting ready to be busy by the end of November.

The shortened Thanksgiving week ended with a 3.79% decline in the S & P 500 (^ GSPC), a 4.26% drop for the Dow (^ DJI) and a 4.26% decline % for Nasdaq (^ IXIC). It was the worst week for the Dow Jones and Nasdaq in 8 months, and the S & P 500 slipped into a correction on Friday. It was also the worst Thanksgiving week for the stock market since 1939, when President Franklin D. Roosevelt postponed the party to the third Thursday in November.

Crude oil (CL = F) continued to dive. The commodity fell 6% to its lowest level in a year on Friday and is currently on the verge of its worst month in 10 years. Persistent concerns over the global supply surplus and slowing economic growth continue to weigh on oil prices.

US workers return to work Monday for Cyber ​​Monday shopping. Traders and investors may or may not decide to swap what they have gleaned from Black Friday's shopping data. According to ShopperTrak, in-store traffic decreased by 1.7% between Thanksgiving and Black Friday compared to last year. However, according to Adobe Digital Insights, Friday's online shopping rose nearly 24% ($ 6.22 billion) over last year.

This week, the spotlight is on the decision makers. On Tuesday, Fed Vice President Rich Clarida will speak in New York at the Clearing House 2018 Annual Conference. On Wednesday, Fed Chairman Jerome Powell will speak at the Economic Club of New York. To close the week, the G-20's top watchdog will be held in Argentina from Thursday to Saturday.

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Economists will pay particular attention to the language of Powell and Clarida. The Fed is expected to raise interest rates at its next meeting in December. However, the Fed's recent tone has been more accommodating than expected.

"Recall that in the past two weeks, financial market expectations regarding rate hikes in 2019 have fallen by almost 20 basis points, partly in response to dovishly comments from Powell and Clarida," have wrote economists of the Deutsche Bank. "As we said before, we do not think their comments at this time reflect an in-depth review of the Fed's core expectations for a further rate hike in December and another three next year. We expect that their speeches – which contrast with the talks that the two Fed leaders held two weeks ago without prepared remarks – set a more balanced tone and should clarify the message regarding the Fed's view on the latest developments. "

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On Thursday, G20 leaders will gather in Buenos Aires, Argentina, to discuss some of the world's most pressing issues. Climate change and trade are two major topics that should be addressed. As tensions between the United States and China are exacerbated, both presidents should move towards a possible resolution. This is the first time President Trump and President Xi have met since the Trump government imposed a $ 250 billion tariff on Chinese products. The two-day meeting will end on Saturday, December 1st.

"We are optimistic that the summit is an opportunity to avoid further escalation, but not an opportunity to revisit what is already in place or has been announced," an economist on Wednesday said. ; UBS.

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Relationships remain tense. Last week, the US Trade Representative released a report criticizing Chinese IP practices, saying "China has not fundamentally changed its unfair, unreasonable and market-distorting practices." The Commerce Department also announced the finalization of a rule identifying technology products. it would be forbidden to export to China.

The story continues