OPEC and the Fed — What you need to know in markets on Wednesday
The data rolls on.
After a busy morning on Tuesday, we’ll get readings on the labor market, inflation, and anecdata from the Federal Reserve on Wednesday.
The morning will be highlighted by the latest report on personal spending and income due out at 8:30 a.m. ET. And in the afternoon, it’s the Fed’s latest Beige Book report.
And amid all the US economic data, markets will be closely-watching news from Vienna as OPEC meets to discuss its production targets.
Oil, Inflation, Fed
The Organization of Petroleum Exporting Nations, more commonly known as OPEC, is set to announce, well, something on Wednesday.
The 14-member oil cartel has gathered in Vienna this week and will formally meet Wednesday. OPEC is expected to make an announcement on whether or not it has agreed to a production cut at some point during the day. Current OPEC production is running at about 34 million barrels per day.
Many in markets have anticipated the cartel would move to curb production as a glut of supply in the global oil market has been blamed for the crash in prices we’ve seen over the last couple years. A Financial Times report out Sunday said some oil traders have suggested a $10/barrel drop in prices could follow a “no deal” announcement.
The latest headlines as of about 5:00 p.m. ET on Tuesday suggested an agreement could be in jeopardy.
According to Bloomberg, Iran said it wouldn’t make cuts while Saudi Arabia insisted the nation curb production. Iran has argued that since it had been placed under Western sanctions for years, it is making up for lost time.
Crude oil prices in New York fell about 3% on Tuesday.
In US economic data, the ADP private payroll report for November will cross Wednesday morning, followed by the latest on personal income and spending.
The income and spending report will also include “core” PCE — a measure of inflation that strips out the cost of food and gas — which is the Federal Reserve’s preferred measure of consumer price increases. Economists expect “core” PCE will rise 1.7% over the prior year in November, in-line with October’s rise and below the Fed’s 2% inflation target.
At 2:00 p.m. ET the latest Beige Book report will be released from the Fed. This report, released eight times per year, is a collection of economic anecdotes from each of the Fed’s 12 districts.
Any commentary on the labor market, wages, or the presidential election will surely be closely watched by financial markets.
Further Reading
Everything US consumers are saying right now is great (Yahoo Finance)
Donald Trump is the first president of our “post-literate” age (Bloomberg View)
Yahoo Finance millennial Melody Hahm says we’re thinking about millennials all wrong. (Yahoo Finance)
Repatriating US foreign earnings isn’t as easy as it seems (FT Alphaville)
The Golden State Warriors talk about start-up investing in the locker room (San Francisco Magazine)
A good overview of the state of France’s presidential race (The Week)
The US housing market will be a “sellers market” by the end of the decade (Zillow) Related: US home prices recover to their pre-crisis high (Yahoo Finance)
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Myles Udland is a writer at Yahoo Finance.
Read more from Myles here; follow him on Twitter @MylesUdland