In Focus This Week: OPEC+ Meeting, PCE Data, Powell Speaks, COP28 Starts

Members of the OPEC+ group meet virtually Thursday to discuss oil production targets for 2024. The meeting was initially scheduled for this weekend. The announcement of a postponement caused a drop of as much as 4% in oil prices last week.

Some members of the cartel are reportedly pressuring for additional cuts in output to stop prices from continuing falling. Oil is now around $80 a barrel. Prices jumped to as much as $140 per barrel last year after Russia invaded Ukraine.

Economic Data

The week starts with the release of new home sales data for the month of October on Monday. In September, sales of newly constructed homes surprised with a jump of 12% to the strongest pace since February 2022. On Thursday, another housing data: pending home sales, which tracks the number of residential properties under contract for a sale.

The most important economic data of the week is the Personal Consumption Expenditure (PCE) index, the Federal Reserve's preferred inflation measure, which is also scheduled for Thursday. The core PCE, which excludes costs of food and energy, rose 3.7% in the 12 months through September, from 3.8% in August. The Fed targets an annual inflation of 2%.

Markets will also watch the data for manufacturing in China on Thursday. The PMI report indicated an unexpected contraction last month. The new numbers will show whether there was a recovery in economic activity in the country.

Powell Speaks

Federal Reserve Chair Jerome Powell speaks Friday, at a fireside chat during an event at Spelman College, in Atlanta. Investors will be looking for clues on possible next moves on interest rates.

In the minutes of the last FOMC meeting, released last week, the Fed said that the current level of interest rates, the highest in 22 years, is still going to weigh on economic activity, hiring and inflation.

Several other Fed officials have public speeches scheduled for this week. The next monetary policy meeting of the Fed is on Dec. 12 and 13.

Earnings

The week will still bring earnings of big retailers, including Dollar Tree and Foot Locker on Wednesday and supermarket chain Kroger on Thursday. Their reports may bring comments and indications on the strength of consumption in the U.S.

Canadian banks RBC, TDB and CIBC release their results on Thursday. In the technology industry, Salesforce reports on Wednesday and Dell on Thursday.

COP28

Pope Francis, King Charles III, heads of state, lobbyist and environment activists will be among the attendees of the COP28, a United Nations conference to discuss climate change. The Nov. 30 to Dec. 12 event in Dubai is expected to attract 70,000 visitors.

One of the focus of the talks will be on the slow global progress in curbing global warming and transitioning from fossil fuels to renewable energy.

At COP21 in 2015, the world agreed to limit global warming to 1.5°C compared to pre-industrial levels by 2050.