Black Friday, India growth figures, UK election campaign

The UK election campaign continues, with more live debates between party leaders scheduled and the Conservative party manifesto, launched over the weekend, will be under scrutiny.

The US will take a breather to celebrate Thanksgiving this Thursday, followed by Black Friday, the sales day that fires the starting gun on the festive shopping season.

Third-quarter earnings season has all but dried up, but a few US retailers are among those reporting this week, while British American Tobacco and catering group Compass feature in London.

India’s third-quarter growth figures are out on Friday, with economists braced for gloom. Sweden and the US also have gross domestic product numbers, with plenty of other economic data to come from the States. Germany has some key sentiment indicators out that will be closely watched after its economy narrowly avoided recession.

Economists will also be keen to hear what Fed chair Jay Powell has to say when he speaks in public for the first time since meeting Donald Trump last week.

It will also be a busy week for central banks in Africa. Kenya is among several reporting and policy easing could be on the cards there after the repeal of rate-cap legislation. There is also the possibility of a rate cut at the Bank of Israel.

Ireland has by-elections that will help gauge the political mood and Germany’s Social Democrats — Angela Merkel’s coalition partners — elect their new leader.

Black Friday

The markets are shut on Thursday for Thanksgiving and Wall Street takes an early cut the following day, leaving many Americans with a long weekend to enjoy a shopping spree when retailers begin their annual Black Friday sales.

Macy’s, which issued another profit warning last week, tries to get a head start on the event by opening on Thanksgiving afternoon as retailers compete for sales and seek to maintain margins, but there’s no getting away from the fact that Black Friday is very much an online event.

IHS Markit forecasts the US retail sector overall will ring up more than $730bn worth of sales for the festive season, a rise of 4.6 per cent from last year. But it predicts department store sales will drop 6 per cent, worse than the 2.8 per cent decline in the 2018 season.

Let’s talk turkey: Simon Schama on Thanksgiving

UK election

Boris Johnson rolled out the Conservative party manifesto on Sunday with a promise not to put up income tax, national insurance or VAT, as he seeks to bolster his commanding poll lead over Labour.

Mr Johnson’s decision to put tax at the heart of the election battle with Labour came as the latest polling suggested he was heading for a 48-seat House of Commons majority, with Labour on course for a crushing defeat.

The Tory manifesto launch marks the start of the final phase of the election campaign now that all the parties will have set out their policy proposals and postal votes will start being sent out this week.

You can follow the FT’s election coverage here.

Also in the UK, lecturers at universities across the country are set to strike on Monday in a dispute over pay, conditions and pensions.

Other votes

This coming Friday Ireland holds four by-elections for Dáil seats left empty following European elections. The votes will be seen as a test for Leo Varadkar ahead of his plans to hold a general election next May.

The prime minister’s Fine Gael party holds Dublin Mid West, the opposition Fianna Fáil party holds Cork North Central, and Dublin Fingal and Wexford are held by independents.

Germany’s Social Democrats announce the result of their leadership election on Saturday, which is likely to have a bearing on the future of the coalition with chancellor Angela Merkel’s conservatives.

The SPD went into government with Ms Merkel in March 2018 amid strong opposition from many of its rank and file. The party promised members they could vote on the future of the coalition at its halfway stage. The vote is due to be held next month.

Central banks

A couple of Federal Reserve items to begin with. Firstly chair Jay Powell is due to speak at Greater Providence Chamber of Commerce dinner in Rhode Island on Monday, the first time he will speak in public since his meeting with Donald Trump last week.

Mr Powell told the president that he would continue to make monetary policy in a “non-political” manner after Mr Trump said the central bank’s lending rate was “set too high relative to the interest rates of other competitor countries”.

This is followed up on Wednesday with the release of the Fed’s Beige Book on economic conditions across the US.

Israel’s central bank meets on Monday. It has already said that it will fall in line with a global move towards easing monetary policy, leading some economists to expect a rate cut. Two of the bank’s five monetary committee members backed a cut in October.

In Africa, Kenya’s central bank meets on the same day. It left the benchmark rate at 9 per cent in September but a fresh easing is possible now policymakers have much more wriggle room since a law capping borrowing costs has been scrapped. Ghana, Nigeria, Mauritius and Angola complete the policy-setting line-up on the continent.

On Wednesday Mexico’s central bank publishes its quarterly inflation report, followed the next day by the minutes from its last policy-setting meeting, when it cut rates to 7.5 per cent.

Companies news and earnings

Alibaba shares are set to begin trading in Hong Kong on Tuesday in a secondary listing of the Chinese ecommerce group. The company is set to raise as much as $12.9bn, which would be the world’s biggest equity raising this year.

Wall Street will watch earnings from electronics retailer Best Buy and discount retailer Dollar Tree on Tuesday for pointers on consumer spending ahead of the holiday quarter.

Investors will be following clothing chain Abercrombie & Fitch’s fortunes for signs on the impact of US tariffs on Chinese imports the same day, while the trade war is also likely to dent earnings at tractor maker Deere & Co on Wednesday.

In the UK, Compass Group, the world’s largest catering company, is expected to report a healthy set of results on Tuesday, while investors will on Wednesday be looking to see how British American Tobacco is getting on with its streamlining efforts, including job cuts and targeting new sales from vaping. 

UK pub and brewing group Marston’s also reports on Wednesday, having said in October that it expects a fall in profit this year after taking a hit from lower food sales.

Economic data

The second reading of third-quarter GDP, out on Wednesday, heads the US economic calendar. The economy is forecast to have grown at an annualised rate of 1.9 per cent.

India’s growth figures on Friday will be closely watched. Over the past year the economy has been slowly losing momentum as promised jobs have failed to materialise and anxious consumers have tightened their belts. The country’s economy grew at a six-year low of 5 per cent in the second quarter — far lower than India needs to grow to absorb the estimated 12m people entering the job market each year.

Sweden and Canada have GDP figures out on the same day and Mexico releases its growth figures on Monday.

Other US reports this week include consumer confidence and new home sales on Tuesday, while Wednesday brings durable goods and consumer spending reports.

Investors will be watching closely this week to see if the gloom hanging over Germany’s economy continues to lift.

Monday’s Ifo business climate index is expected to rebound slightly after steadying last month. GfK’s consumer confidence survey is also forecast to recover slightly on Tuesday.

Background reading

Market Questions: Is Germany’s economy over the worst?


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