This week's heavy schedule: November non-farm payrolls are coming! China's November Caixin PMI, two important OPEC meetings, and Powell's speech

From December 2 to December 8, a summary of major financial events, all in Beijing time:

Key focus next week: U.S. November non-farm data, China November Caixin PMI, OPEC meeting.

In addition, the U.S. will release November "small non-farm" data, ISM manufacturing and non-manufacturing indices, and the Federal Reserve will publish the Beige Book on economic conditions, with multiple officials from the U.S. and European central banks, including Powell, making statements. The Eurozone will announce the final quarter-on-quarter GDP for Q3, and the Chinese photovoltaic industry will hold the 2024 Annual Conference of the Photovoltaic Industry.

November Non-Farm Data Released! Will the Federal Reserve Cut Rates Next Month, and by How Much?

On Friday (6th), the U.S. will announce changes in non-farm employment and the unemployment rate for November.

On Wednesday (4th), the U.S. will announce changes in ADP employment numbers for November.

Last month, due to two hurricanes and a Boeing strike, the U.S. non-farm payrolls saw a sharp drop to 12,000, the lowest level since 2020, and far below the expected 100,000.

The unemployment rate remained unchanged after rounding, holding steady at 4.1%, in line with expectations and previous values. However, on a non-rounded basis, it was 4.14%, an increase of 0.09 percentage points from the previous month.

Nick Timiraos, a reporter for The Wall Street Journal, known as the "new Federal Reserve correspondent," stated that the analysis of this employment report can be "subjective," with most Wall Street analysts believing that the poor data was mainly due to the two hurricanes in October and the Boeing strike, but some analysts are concerned that the job market is indeed deteriorating. Almost all analysts believe that this report will not affect expectations for a 25 basis point rate cut by the Federal Reserve this month.

However, after Trump's election as president earlier this month, the Federal Reserve's stance has changed, with many supporting a "gradual" rate cut, and officials suggesting a pause in action:

The number of decision-makers who believe a gradual rate cut is appropriate due to uncertainty about the neutral interest rate has changed from "some" to "many"; almost all decision-makers believe that the risks to employment and inflation remain generally balanced, some believe that the risks of economic activity and labor market downturn have decreased, and many believe that the risks of a cooling labor market have declined since the September meeting; some believe that the ON RRP rate should be adjusted to be the lower bound of the federal funds rate.

The "new Federal Reserve correspondent" stated that the minutes suggest that if inflation progress stalls, rate cuts will be more cautious; Fed officials discussed a technical reduction of the ON RRP rate by 5 basis points at "the next meeting."

S&P Global Releases November Caixin Manufacturing, Services, and Composite PMI

On Monday (2nd), the China November Caixin Manufacturing PMI will be released. On Wednesday (December 4), China will release the Caixin Services PMI and Composite PMI for November.

Since the end of September, a series of incremental policies have been introduced. From the data released by the National Bureau of Statistics on the manufacturing and services PMIs for November, market demand has stabilized, optimistic sentiment has somewhat recovered, and the effects of policies are beginning to show.

The National Bureau of Statistics announced that in November, the manufacturing Purchasing Managers' Index (PMI) was 50.3%, an increase of 0.2 percentage points from the previous month, marking three consecutive months of recovery, with a slight acceleration in the pace of manufacturing expansion.

The non-manufacturing business activity index was 50.0%, a decrease of 0.2 percentage points from the previous month; the composite PMI output index was 50.8%, unchanged from the previous month, indicating that the overall economic prosperity level in our country remains stable and expanding.

Zhao Qinghe, a senior statistician at the National Bureau of Statistics Service Industry Survey Center, interpreted the November PMI data as follows:

“Both supply and demand have rebounded. The production index and new orders index were 52.4% and 50.8%, respectively, increasing by 0.4 and 0.8 percentage points from the previous month. The new orders index has risen into the expansion zone for the first time since May this year, indicating that the activity level in the manufacturing market has strengthened. By industry, the production index and new orders index for general equipment, automobiles, and other sectors were all above 54.0%, with production and demand being released quickly; the production index and new orders index for petroleum, coal, and other fuel processing, as well as specialized equipment, were both below the critical point.

The prosperity level of the construction industry has declined. Affected by the cooling weather and the gradual entry into the off-season for outdoor construction, production activities in the construction industry have slowed down, with the business activity index at 49.7%, a decrease of 0.7 percentage points from the previous month. From the perspective of market expectations, the business activity expectation index was 55.6%, an increase of 0.4 percentage points from the previous month, indicating that construction companies' expectations for recent industry development remain generally stable.”

Two Important OPEC Meetings Ahead! The Game of Production Cuts and Increases Intensifies

On Thursday (December 5), the 38th OPEC and non-OPEC oil-producing countries ministerial meeting and the 57th OPEC+ Joint Ministerial Monitoring Committee (JMMC) meeting will be held.

On November 28, OPEC announced the postponement of these two key meetings to December 5, to be held via video conference. The official OPEC statement indicated that some ministers needed to attend the 45th Gulf Cooperation Council summit in Kuwait City, leading to scheduling conflicts that necessitated the postponement.

These two meetings are crucial, as they relate to OPEC's oil production planning for the entire upcoming year, thus significantly affecting the sensitive nerves of the global oil market.

At the beginning of the month, eight OPEC+ oil-producing countries, including Saudi Arabia, Russia, Iraq, and Kazakhstan, decided to extend the voluntary production cut of 2.2 million barrels per day, originally set to expire at the end of November, until the end of December. The meeting next Thursday may discuss whether to withdraw this production cut in the future.

Currently, the mainstream market expectation is that OPEC+ is highly likely to postpone the increase in production plans at this December meeting, at least extending the current production cut policy until the end of the first quarter of next year. XTBMENA market analyst Milad Azar revealed in his analysis report:

"Given that oil demand is weaker than expected, while non-OPEC+ countries' oil production continues to rise, the organization is cautiously weighing whether to postpone the planned production increase set for January 2024."

This is another major contradiction faced by OPEC+, as retracting some of the production cuts could risk flooding the crude oil market. OPEC's monthly report released mid-month has already lowered the global oil demand growth forecast for 2025 for the fourth consecutive time.

Harry Tchilinguirian, head of oil research at Onyx Commodities Ltd., believes that OPEC is "caught in a dilemma." If the organization announces an increase in production, oil prices may continue to fall, affecting member countries' revenue per barrel, while not increasing production could lead to market share being seized by the U.S. and others.

Other Important Data, Meetings, and Events

• The U.S. will release the November ISM Manufacturing and Non-Manufacturing Index.

On Monday (2nd), the November ISM Manufacturing Index will be released, followed by the November Non-Manufacturing Index on Wednesday.

Last month's data showed that the U.S. ISM Manufacturing PMI index fell to 46.5 in October, the lowest since July 2023, below the expected 47.6, with the previous value in September being 47.2. The employment index has been below the breakeven line for the fifth consecutive month, the price payment index surged by 6.5 points in a single month, production activity sharply declined, and inventories further retreated.

Due to weak business activity and a slowdown in hiring by employers, the U.S. ISM Services Index unexpectedly fell to 51.8 in October. Earlier data released on the same day showed that the U.S. Markit Services PMI final value for October was 50.6, expected 50.9; the composite PMI final value was 50.7, compared to 50.2 in September.

• On Thursday (5th), the Federal Reserve will release the Beige Book.

In the Beige Book released last month, the Federal Reserve stated that economic activity in most regions of the U.S. has changed little since early September, with two Federal Reserve districts reporting moderate growth. Reports on consumer spending were mixed, with some districts noting a shift in purchasing patterns towards cheaper alternatives.

Analysts believe that the Beige Book report indicates that despite the unexpected rise in official employment, consumer prices, and retail sales data in September, the U.S. economy continues to slow down. Although the latest economic data has shown some recovery, Federal Reserve officials have recently cited anecdotal evidence from some contacts about economic conditions as a reason to continue lowering interest rates.

• Multiple central bank officials from Europe and the U.S., including Powell, are speaking intensively.

On Tuesday, Federal Reserve Governor Waller delivered a speech. FOMC permanent voting member and New York Fed President Williams participated in a dialogue hosted by the Queens Chamber of Commerce.

On Wednesday, Federal Reserve Governor Cook delivered remarks on the labor market and monetary policy. European Central Bank President Lagarde made introductory remarks at a hearing of the European Parliament's Economic and Monetary Affairs Committee.

On Thursday, Federal Reserve Chairman Powell was invited to be interviewed at the DealBook/Summit conference hosted by The New York Times On Friday, 2024 FOMC voting member and Richmond Fed President Barkin delivered a speech. Federal Reserve Governor Bowman also spoke.

On Saturday, 2024 FOMC voting member and San Francisco Fed President Daly delivered a speech.

• The China Photovoltaic Industry Association will hold the 2024 Photovoltaic Industry Annual Conference

From December 4 to 6, the China Photovoltaic Industry Association will hold the "2024 Photovoltaic Industry Annual Conference" in Yibin City, Sichuan Province, inviting representatives from industry regulatory authorities, industry organizations, industry experts, and leaders of photovoltaic companies to discuss and analyze hot issues in industry development.

During the conference, there will also be a seminar on the development of the photovoltaic supply chain, a seminar on the development of photovoltaic innovative applications, and various thematic meetings.

New Investment Opportunities

In the week (December 2 - December 6), there are 2 new stocks available for subscription in the A-share market, and 0 new stocks will be listed.

A total of 22 new funds (combined statistics of Class A and Class C) will be issued during the week, including 16 bond funds, 2 mixed funds, 0 stock funds, 16 index funds, and 2 REITs.