Cutting through the noise: macro events to be aware of
Cutting through the noise: macro events to be aware of
If I pay no attention to the news, I feel behind. But if I read/watch too much news, depression about the state of humanity and the world seeps in. It’s easier than ever to fall down a rabbit hole these days.
The truth is probably somewhere in between though. It’s why it's been helpful to me to mix in IG accounts like tankgoodnews, humansofny, and upworthy into my repertoire. Sometimes you just need to watch something where the only motivation is to showcase how amazing this world and its people can be.
As we get closer to Thanksgiving — a holiday that I’ve personally decided to make only about gratitude — I am reminded to focus on what’s important and to not let noise or stories define how life is approached.
As I look out to the end of the year, without a crystal ball, I’ve deciphered the calendar of macro market events to watch to help me focus less on other noise. Of course, unforeseen things can always pop up.
Today: The Fed releases the minutes from their last meeting (November 1-2). These will probably sound a bit more dovish** than the good DJ Powell’s last set (aka speech at the last press conference) or the recent chart Fed Governor Bullard published, where he suggested the Fed should take rates much higher than they have indicated.
Wednesday, November 30: Inflation figures (CPI*) for the Eurozone for November will be released. This is the last inflation info the ECB*** will receive before their next meeting where they’ll decide interest rates. Europe is in a tough position due to its general reliance on importing natural gas and oil, and while they’re experiencing inflation like we are in the US, their slower growth makes it tougher for their central bank to significantly raise rates to fight inflation. It’s why they only just started. PS: Powell is giving a speech at the Brookings Institute as well.
Friday, December 2: An update on the US jobs market for November. While inflation data is important to the Fed and their future actions, if the employment market starts to weaken a bit, it will be much easier for Fed Chairman Powell to consider a pause (a “powse”) in hiking interest rates. Right now, the market is expecting an increase of 200K jobs (October was 261K).
Sunday, December 4:OPEC+**** will meet to discuss production as they usually do. At their last meeting, they cut production to keep prices elevated. However, oil has since dropped below where it was before the cut of production. So the focus will be on whether or not they take further action to support prices (meaning more cuts).
Tuesday, December 13: The next US CPI report will drop, telling us whether inflation has, in fact, peaked and if it's even started to fall. Like the jobs report, this will help inform the Fed’s interest rate decision, which makes it important. We think it has peaked, which could get us closer to the “powse.” Of course, if/when that happens, attention will turn back to earnings and valuations, which are generally not very attractive yet (they are too high).
Wednesday, December 14:The next Fed meeting and interest rate decision. Right now, an increase of rates by 50bps (aka 0.50%) is widely expected, so anything different will create a reaction in the markets, depending on the direction. In addition, the Fed’s forecast of where rates will be in the future (literally called dots or a dot plot because it's a chart of dots) will also be scrutinized. Expectations right now are for this to be around 5% in 2023, so anything higher will likely create a negative reaction in the market.
As we get later in December, there is another ECB meeting and also a handful of updates from companies that are closely watched to provide a signal on the state of the economy and consumer behavior (like FedEx). Then earnings season kicks into gear in January. But we’ll get to that later.
In the meantime, wishing you a very happy holiday. There’s always something to be thankful for.
* CPI: Consumer Price Index, a measure of prices paid by consumers, tracked over time.
** Dovish is the term for when a central bank is talking about or actually lowering rates. The opposite to this is hawkish, when they are talking about or actually raising rates.
*** ECB: European Central Bank
**** OPEC+: Organization of the Petroleum Exporting Countries