Once again it’s going to be events in Europe, plus the US which will dominate financial markets this week.
In contrast, Australia should have a quiet week and our markets will be buffeted by offshore trading moves and confidence levels.
And there’s a final full week of annual meetings locally, with hundreds scheduled.
In other words a repeat of the past few weeks.
In Europe, the Spanish elections overnight produced the expected change of government, with the Conservatives winning.
But of greater importance will be the market reaction to the change: will Spanish bond yields retreat, or continue at above 6% and threaten to derail the economy?
In the US we have several stories to keep an eye on: the impasse over the deficit and spending cuts that won’t be resolved by the deadline on Wednesday night, our time, without significant changes from both sides, especially the Republicans.
The Thanksgiving holiday weekend starts on Thursday night, our time, with the massive spending spree called "Black Friday" the key to the strength of the seasonal Christmas spending surge.
As well we get several major data releases, including the second estimate of third quarter growth tomorrow night.
In the eurozone debt crisis, investors will continue to monitor yields on 10-year French, Italian and Spanish government bonds, which drove stockmarket volatility last week.
Yields for Italian and Spanish debt have been reaching toward 7%, viewed as the danger level beyond which future bailouts become a harsh reality.
The executive European Commission are due to outline proposals (on November 23) for stronger eurozone economic governance and publish a consultation paper on the contentious idea of common eurozone bonds.
With all the attention on Italy, Greece has been sidelined, but it could return to worry markets with news of continuing problems in the leadership of the new coalition government.
In the US, Congress agreed on something: to extend the financing of the government until mid December.
Wednesday night marks the deadline for the Congressional supercommittee to come up with more than $US1.2 trillion in spending cuts over the next 10 years.
If a deal isn’t reached in time, automatic budget cuts will begin in 2013, but can be easily undone by the new Congress after next November’s polls.
So far, there has been no sign of a deal as lawmakers are stuck largely on fundamental disagreements over tax cuts.
Media reports over the weekend say a proposal from the Republicans for a smaller deficit deal in case a broad package couldn’t be reached, was rejected by Democrats because it included big cuts in spending and no tax increases.
Standard & Poor’s which cut the US credit rating in August, has warned that America could see its rating downgraded again if the government failed to make sufficient spending cuts.
Tomorrow night we get the week’s major data release in the US, the second estimate of third-quarter gross domestic product revision.
The first estimate a month ago was an annual 2.5% rate and US economists say it could be cut to 2.3% because of a fall in business inventories, which could be good news because that usually means businesses will expand output to rebuild stocks.
But it will also depend on the performance of the retail sector from Thursday night.
Also on Tuesday, the Federal Open Market Committee will publish the minutes from its November meeting, which is highly anticipated given the speculation of another round of federal stimulus.
At November’s meeting, Governor Charles Evans cast the Fed’s first dissenting vote in favour of further easing since December 2007.
Durable goods orders for October come out Wednesday, and are expected to fall, dragged down by falling aircraft sales.
Along with durable goods, personal income and consumer spending numbers from October are due on Wednesday and will give us a good understanding of what American consumers are doing in the lead up to Christmas.
Also existing home sales for October will be released tonight, our time.
The US earnings calendar will be light on this week which is really a three-day week because of Thanksgiving and the fact that most markets will see very light trading on Friday because it is an extended break for millions of people still in work.
Troubled tech giant Hewlett-Packard Co reports early Tuesday, our time, and is the last major US company to report. It will be Meg Whitman’s first earnings call as the CEO after she replaced Leo Apotheker who was removed by the board from his post in late September.
Among food companies, Tyson Foods reports tonight and Campbell Soup Co. (Arnotts) reports tomorrow night. Agriculture equipment manufacturer Deere & Co is also releasing earnings on Wednesday.
Marketwatch says that of the 429 S&P 500 companies and 29 Dow companies that have already reported earnings, 73% have beaten analysts’ estimates, slightly lower than the 74% average over the past four quarters.
In Europe, more people expect more weak data with November business conditions indicators and industrial new orders, all due Wednesday and expected to show a continuation of the growing weakness.
In Asia, Japanese trade figures are out today and CPI data will be out on Friday and will show more of the same, a possible small fall in the trade surplus and continued underlying price deflation.
HSBC’s fl
