Day Ahead: Top 3 Things to Watch
Investing.com – Here’s a preview of the top 3 things that could rock markets tomorrow.
1. Retail Inflation Data Released
Core producer price inflation came in hotter than expected today and tomorrow will bring the retail numbers. Investors will be keeping a keen eye on them ahead of next week’s Federal Reserve interest rate decision, which isn’t a foregone conclusion.
The Labor Department will issue the November consumer price index (CPI) at 8:30 AM ET (13:30 GMT).
Currently, economists are predicting that the CPI stayed flat last month. The core CPI, which excludes food and energy prices and is watched more closely by the Fed, is expected to have risen by 0.2%.
Both measures are forecast to be up 2.2% for the 12 months through November.
2. Tencent Music’s $1 Billion IPO on Tap
China and the U.S. will be in headlines for trade tomorrow, of course, but also for the IPO market.
Tencent Music Entertainment Group, China’s largest music-streaming service, is expected to go public in a deal worth more than $1 billion on the Nasdaq.
The company plans to price 82 million shares between $13 and $15 per share tonight.
At the midpoint of $14, Tencent would raise $1.148 billion.
The IPO was set to happen in October but was delayed because of the market selloff.
The company was anxious to debut on Wall Street this year in case trade tensions between the U.S. and China worsened, Reuters reported, citing a source.
Tencent will trade under the symbol TME.
3. Another Drop Expected in U.S. Oil Inventories
Crude oil inventory numbers will be the highlight of energy trading tomorrow.
The Energy Information Administration (EIA) will release the latest weekly numbers at 10:30 AM ET (15:30 GMT).
Traders are currently expecting a drawdown of around 3 million barrels, narrower than the big draw of more than 7 million barrels the week before.
U.S. crude output has become a main driver of oil prices, with speculation that increased supply from the States will overwhelm any production cuts from OPEC and Russia.
The EIA’s Short-Term Energy Outlook put U.S. output for next year at a record high 12.1 million bpd on the average, versus the average of 10.9 million expected this year. The net increase of 1.2 million bpd would essentially account for all the supply OPEC and its allies planned to cut next year to shore prices up.
“If true, there goes your bullish story for oil from these cuts,” said John Kilduff, partner at New York energy hedge fund Again Capital.
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