Key events to watch in the week ahead: 4 – 10 November 2024

This week’s overview

US equity markets are set to finish lower this week as mega-cap tech earnings came in mixed. Microsoft and Meta saw some unwinding post-earnings, while overall sentiments were also unnerved ahead of the upcoming US election.

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

US 3Q 2024 earnings season: PLTR, QCOM, LYFT, ABNB

With the Magnificent Seven stocks’ earnings behind us (except Nvidia), the US earnings season should see some winding down in the week ahead. Notable key releases include Palantir, Qualcomm, Lyft and Airbnb.

Thus far, earnings momentum has been keeping up with previous quarters. Out of the 67% of S&P 500 companies which have released their earnings, 77% have beaten earnings expectations.

4 - 8 November 2024: China’s National People's Congress (NPC) meeting

Weak economic conditions in China have forced Chinese authorities into rescue mode in order to meet their 5% gross domestic product (GDP) growth target this year. In September this year, China authorities launched a series of economic measures, which included lowering interest rates, cut to mortgage rates for existing homeowners and reducing the reserve requirement ratio (RRR) for banks by 0.5%.

However, while monetary measures may support liquidity, markets are also hoping for more fiscal policies to further stabilise sectors like housing and consumer markets, with more clarity to be sought from the NPC meeting.

Recent speculations are that China is weighing approving over 10 trillion yuan in additional borrowing in the coming years. The headline figure may seem huge at first glance (analysts were expecting 2 - 4 trillion yuan), but given that the amount is focused on helping local authorities resolve their off-balance-sheet debt and fund regional governments’ purchases of idle land and properties, the overall net fiscal impact on the economy remains questionable. Markets still hope to see more direct demand stimulus targeting consumption in the upcoming meeting.

5 November 2024 (Tuesday, 11.30am SGT): Reserve Bank of Australia’s (RBA) interest rate decision

As widely expected, the RBA kept its official cash rate on hold in September at 4.35% for a seventh straight meeting. The tone in the accompanying statement and press conference was hawkish.

While the Q3 fall in trimmed mean inflation (to 3.5% from 4%) brings us closer to the start of an RBA rate-cutting cycle, the continued resilience of a labour market (which has added 267k jobs over the past six months) means that RBA rate cuts are likely to be a story for early 2025.

As a side note, the RBA’s statement from the September board meeting emphasised that while it expected headline inflation to decline due to government subsidies, it would view the impact as temporary and will look through them.

As such, we expect the RBA to keep rates on hold a 4.35% before a first RBA rate cut in February 2025.

8 November 2024 (Friday, 3.30am SGT): US Federal Open Market Committee (FOMC) meeting

At its last meeting in September, the FOMC cut rates by 50 basis point (bp) to a range of 4.75% to 5%. This was the Federal Reserve (Fed)'s first rate cut in more than four years, aimed at supporting the US labour market.

Fed Chair Jerome Powell highlighted the robustness of the US economy and stressed that large cuts in the future shouldn’t be seen as the "new pace." The FOMC projections show an additional 50bps of cuts this year and another 100bps next year, stabilising at a long-term rate of 2.875%, which bumped up by 12.5bps.

US inflation data since the Fed’s rate cut in September has been tepid, while activity and the labour market have been mostly stronger than expected. The run of more robust economic data has prompted traders to revise their dovish outlook for aggressive Fed rate cuts into year-end. The base case for most is another 25bp rate cut at the November FOMC meeting, followed by another 25bp rate cut at the December FOMC meeting.

9 November 2024 (Saturday, 9.30am SGT): China’s inflation rate

For September, China’s inflation data continues to paint a subdued demand backdrop despite the government's monetary easing efforts. Consumer inflation came in at 0.4%, below the 0.6% expected, with much owing to rising food prices for the price gains. Across other non-food segments, deflationary pressures remain in place. Its September producer prices also contracted by 2.8%, worse than the 2.5% contraction expected.

Ahead, consumer prices in October are expected to show a slight uptick to 0.6% from previous 0.4%, with underperformance over the past two straight months showing the risks of a downside surprise. This may translate to more pressures on authorities for more to be done to meet at its upcoming NPC meeting, in order to meet its 5% GDP growth target.