Key events to watch in the week ahead: 11 – 17 November 2024

This week’s overview

US equity markets scaled to fresh record highs this week, as market participants price for a potential Red Sweep in the US presidential election, which could mean little resistance to Trump’s tax cuts and spending plans, along with his business-friendly deregulation approach.

Small-caps were cast into the spotlight, with the Russell 2000 index up more than 8% so far this week. A no-surprise in the November Federal Open Market Committee (FOMC) meeting with a 25 basis point (bp) rate cut also paved the way for risk-on sentiments to prevail, with expectations that policy easing will continue in December.

Looking into the new week, here are five key events to watch.

US 3Q 2024 earnings season

The US earnings season will head into its final phase, with focus on Chinese companies’ earnings such as Tencent, JD.com and Alibaba. The companies’ earnings in the previous quarter managed to outperform market expectations, but market participants continue to have reservations over the broader economic challenges in China, which resulted in a muted reaction in their share price post-results.

Upcoming focus will be whether their earnings can stabilise further, alongside any forward guidance for reassurances that corporate earnings are on track for recovery.

13 November 2024 (Wednesday, 9.30pm SGT): US consumer price index (CPI)

Last month (September), the annual headline inflation rate in the US slowed for a sixth consecutive month to 2.4% YoY from 2.5% prior. This marked the lowest level since February 2021.

The annual rate of core inflation, which excludes the volatile food and energy sectors, edged higher to 3.3% YoY in September, rising from a three-year low of 3.2%. The rise was driven by monthly inflation, which rose by 0.3% ahead of expectations of a 0.2% increase.

The preliminary expectation for October is for annual headline inflation to rise to 2.6% and for core inflation to remain stable at 3.3% YoY. The US rates market is pricing a 92% probability for another 25 bp rate cut for the December Federal Reserve (Fed) meeting.

14 November 2024 (Thursday, 8.30am SGT): Australia’s employment data

Last month (September), the Australian economy added 64.1k jobs, significantly stronger than the 25k gain the market had expected. The unemployment rate stayed at 4.1% despite the participation rate increasing to a record high of 67.2%.

The strength of the labour market, combined with core inflation that “remains too high,” has encouraged rates market and analysts to push back expectations of a first Reserve Bank of Australia (RBA) rate cut into 2025.

This month, the preliminary expectation is that the Australian economy will create 20k jobs and that the unemployment rate to rise to 4.2%. The Australian interest rate market is pricing in 3 bp of RBA rate cuts for December, with a first 25 bp RBA rate cut not expected until May 2025.

15 November 2024 (Friday, 7.50am SGT): Japan’s preliminary Q3 gross domestic product (GDP)

Japan's Q2 GDP expanded by an annualized 2.9%, lower than the preliminary reading of 3.1% but still a strong rebound from the 2.4% contraction in Q1. Growth is supported by positive wage-spending dynamics, along with improvement in business spending, while the risks to growth revolves around external demand.

Ahead, expectations are for Japan’s Q3 GDP to slow to 0.2% from the 0.7% in Q2. On an annualised basis, Q3 GDP may slow to 0.7% from the 2.9% prior, with an expected dip in private consumption and capital expenditure. This can be attributed to temporary economic disruptions from Typhoon Shanshan and mega-earthquake alerts during the quarter, which may distort the underlying trend in growth. Focus may be shifted towards Q4 growth numbers, where a rebound may be expected.

15 November 2024 (Friday, 10am SGT): China’s retail sales, industrial production, fixed asset investment

China’s Purchasing Managers' Index (PMI) figures improved in October, with manufacturing activities edging into expansion for the first time in six months, while the services sector also grew much more than expected. As such, hopes are mounting that recent stimulus measures may be starting to pay off, while market participants continue to side-eye Chinese authorities for more clarity on direct fiscal plans to support consumer spending.

Ahead, expectations are for China’s October retail sales to improve to 3.8% from 3.2% prior and for fixed asset investment to improve to 3.5% from 3.4% prior. Industrial production are expected to remain unchanged at 5.4% year-on-year. The economic data will be on watch to reflect any signs of policy success from the late-September monetary easing, as Chinese authorities are in a race against time to meet their “around 5%” growth target by the end of this year.