In Focus This Week: Biden-Xi Meeting, Inflation Data, Retail Earnings

All eyes will be on a major diplomatic event Wednesday: U.S. President Joe Biden meets with his Chinese counterpart Xi Jinping in San Francisco.

It will be the first meeting between the two leaders since November of last year in Bali. U.S.-China relations have been cold, with some tensions, such as the controversy on the allegedly Chinese surveillance balloons flying over the U.S.

Biden and Xi are expected to discuss a broad range of issues, from economic ties between the two countries to the geopolitical topics, including Russia's war in Ukraine, the Israel-Hamas conflict and China's policy on Taiwan.

Inflation

The consumer price index for the month of October will be released Tuesday. It's the most expected economic data of the week.

Economists surveyed by Reuters estimate a monthly inflation of 0.1%, a slowdown from 0.4% in September, when rent increases put pressure on the index.

On Wednesday, the Commerce Department releases retail sales data for October. Industrial production figures are scheduled for Thursday and housing starts for Friday.

Fed Speakers

Several public speeches of Federal Reserve officials are scheduled for this week. Chair Jerome Powell, who isn't expected to give remarks in public events, said Friday that policymakers aren't sure interest rates are high enough to bring inflation down to the 2% target.

The comments are going to be especially important if the officials discuss the inflation numbers that will come out Tuesday.

The Fed decided on Nov. 1 to keep the U.S. key interest rate unchanged in the range of 5.25% to 5.5%. It's the highest level in 22 years, after the rate was increased 11 times since early last year.

Retail Earnings

The earnings season slows this week, but some big names in retail are scheduled to release their quarterly results.

Target on Wednesday, followed by Walmart, Macy's and The Gap on Thursday.
The companies may provide an indication of how they expect sales to be at the busiest time of the year for retail.

Consumer spending boosted the U.S. economic growth in the third quarter to 4.9%, the strongest since the fourth quarter of 2021.

Government shutdown

Congress will have a busy week discussing proposals to avoid a government shutdown as soon as Saturday.

The House and the Senate need to approve legislation to fund the government as the stopgap measure that averted a shutdown on Oct. 1 expires Friday.

Reaching a deal or not, the talks will be a test for Republican Speaker of the House Mike Johnson, who has been in the post for less than three weeks.

His predecessor, Kevin McCarthy, was ousted after members of his own party were angry at him for reaching a bipartisan deal that kept the government running.