Normally Thanksgiving week in the US is a very festive time – America’s national holiday for family and friends and the kick-off to the world’s biggest retailing event – Black Friday and the run-up to Christmas.
But this year, COVID-19, Donald Trump’s increasingly erratic behaviour, weak economies (because of the pandemic), and growing uncertainty about 2021, has made the coming week and beyond more problematic.
Global updates of manufacturing and service sector activity today and tonight for countries like Japan, Australia, the US, and parts of Europe, will show business is OK, a touch slower in some parts, but better than would have been expected a few months ago.
But the sweeping surge in the second and third waves of the pandemic across Europe and the UK — lockdowns are slowing it in France and other eurozone countries, but the pandemic is crippling economies for a second time in less than a year.
Japan is seeing new waves, as is Hong Kong and infections are rising in India. China remains healthy, but there are reports of virus traces on imports of frozen food and in isolated parts of the country.
The US however is where the economy is being swept towards a new slump by an out-of-control infection rate – thanks to the lack of leadership of Trump and his administration and many Republican state governors and other leaders.
Trump’s moaning and groaning about the election result is not helping business confidence – one worrying figure late last week was news of a continuing fall in equipment purchases by US companies in recent months as they cut their future investment plans.
Wall Street is starting to be confused by the future optimism of the new vaccines appearing, and the grim reality of now with soaring infection numbers (A million new cases in the past six days) and surging deaths. Eventually, that will overwhelm the vaccine-driven optimism.
The grim reality for the US is that this Thanksgiving on Thursday the families and friends of upwards of a quarter of million Americans will not be joining them in the great Turkey Day celebration – a terrible cost for the families and the country.
Trading in financial markets will come to a halt on Thursday and not much better on Friday and that will impact globally.
The major event this week is the second estimate of the US third-quarter GDP on Wednesday when the minutes of the last Fed meeting will also be released, as well as the latest personal consumption data on spending and prices (the data the Fed focuses on).
Durable goods orders will also be issued midweek as well. The business activity survey data for November will be issued tonight, our time.
In Australia, the coming week should be calmer economically – well except for the start of the run-up to the release next week of the September quarter GDP figures Wednesday week and the final monetary policy meeting tomorrow week of the Reserve Bank.
There’s data on the value of construction work done in the September quarter and the latest quarterly reading on business investment – both actual and prospective.
Today sees the release of the early business activity readings for November. Victoria’s budget tomorrow will be watched for more policy stimulus and for whether it follows NSW down the path away from stamp duty. There will be $5.3 billion of spending announced for social housing and billions of dollars on new road and rail infrastructure.
Earnings results are due from TechnologyOne and Fisher & Paykel Healthcare of NZ, while Ampol holds a strategy day where investors are looking for an update on the future of the company’s Lytton refinery in Brisbane and whether it will remain open. Ampol (the old Caltex Australia) is reviewing Lytton’s future.
For the UK and Eurozone, there’s the early November business activity surveys and confidence (in the eurozone where economists now see another recession looming).
The UK sees a spending review from the Johnson government on Wednesday The deficit and revenue figures will be eye-openers (as they are for every economy around the world).
The UK is gripped by the pandemic (again) and is stumbling towards an unwanted deadline the final shape of the divorce from the EU.
Watch for signs of UK business-boosting imports from the EU and local production in fear of no-deal and a virtual shutting of the borders from January 1.
The current pandemic driven lockdown is threatening to keep the UK under pressure, a collapse or no deal in talks with the UK would be the final blow.
In Asia, there are industrial production releases in Japan, South Korea, Thailand, Singapore, and Vietnam, plus China’s industrial profits.
Japanese retail sales and Singapore’s GDP are also released, while South Korea’s central bank policymakers meet to set interest rates.