JOLTS, Russian saber, failure of COP26

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© Reuters.

by Geoffrey Smith

Investing.com – US job vacancy data and the University of Michigan consumer confidence survey lead a quiet Friday for economic data. Russia keeps Europe in tension with aggressive attitudes on the borders of Ukraine and Poland. The shares are set to rise, but they are still on for a week on the downside on inflation and COP26 ends as it started, in a decidedly disappointing way. Here’s what you need to know about the financial markets on Friday 12 November.

1. JOLTS, inflation expectations in the foreground

The U.S. job market – and its ability to drive inflation – will again be the focus of attention later when the Department of Labor releases its monthly survey on job openings and job turnover.

Analysts expect the number of vacancies to have decreased slightly in October to 10.30 million from 10.44 million in September, but this is still not far from the all-time high of 11.10 million recorded in August. It is also nearly 3 million above its pre-pandemic peak in 2019.

The University of Michigan also publishes its consumer confidence survey for November, in which attention is likely to focus on the inflation expectations sub-index, which hit its highest level since 2008 last month. Given the flurry of actual inflation headlines that hit a 30-year high in October, this looks vulnerable to a surprise to the upside.

2. Russia waves its saber against Europe

Russian saber noise reached its highest level in a few years, reinforcing the efforts of its ally Belarus to deflect new EU sanctions against its leadership over fraudulent elections and political crackdowns.

The Kremlin has again amassed troops on the Ukrainian border, prompting US diplomats to warn that Russia could make a new foray into the country it invaded seven years ago. It is also conducting joint military exercises with Belarus near the city of Grodno in northwest Belarus, which borders both Poland and Lithuania.

Meanwhile, the clash between Polish border security guards and thousands of migrants deliberately handed over to the border by Belarusian President Alexander Lukashenko continues. Lukashenko threatened to cut off Russian gas supplies through the main Yamal-Europe pipeline on Thursday. While the Kremlin is unlikely to allow such open politicization of its gas supplies, the move indirectly increases pressure on Europe to allow exports to begin via the Nord Stream 2 pipeline.

The ruble, one of the best-performing currencies of the year, fell against the dollar for a third consecutive day, by 1%, at a five-week low.

3. Shares destined to open higher; Chinese e-commerce giants have a mixed day for singles

US equity markets are expected to open a touch higher on Friday, with sentiment guiding direction in the absence of any major moving market news.

By 6:15 am ET (1015 GMT), they were up 78 points, or 0.2%, on course for a weekly loss amid growing fears of inflation and higher interest rates. The contract was up 0.1% and the contract also gained 0.2%.

Stocks likely to be in the spotlight later include Beyond Meat (NASDAQ :), which lost nearly 20% this week against a backdrop of weaker outlook (it’s still trading at over 10x forward sales). Chinese e-commerce giants Alibaba (NYSE 🙂 and JD.com (NASDAQ 🙂 will also be the center of attention after mixed fortunes in their “single day” sales event. The gross value of merchandise processed by Alibaba’s Taobao market grew to less than 10% for the first time ever.

4. COP26 closes with another victory for fossil fuels

The world’s largest hot air party came to a typically disappointing conclusion in Glasgow, Scotland, as negotiators at the COP26 conference watered down yet another effort to move beyond fossil fuels and avert the risk of catastrophic climate change.

A draft final statement from the summit softened the language on phasing out coal energy and removing subsidies for the use of fossil fuels, largely at the insistence of Arab countries, according to Reuters.

This is on top of the failures earlier in the week in making substantial progress in creating a global carbon market, in enforcing previous promises to help poorer countries finance the energy transition, or in engaging in annual reviews of how countries deliver on their promises.

The agreement on long-term energy ideals would probably never have been realistic, given the short-term energy crisis currently affecting many parts of the world and the absence of Xi Jinping, who has chosen to stay home to obtain a mandate from the Communist Party govern as long as it wants.

5. Oil prices fall again with the stronger dollar weight

Prices fell overnight, leaving them just before the gain line for the week as a stronger dollar continued to make life more difficult for non-U.S. Buyers.

At 6:30 am ET, U.S. futures fell 1.7% to $ 80.20 a barrel, threatening to fall below $ 80 for the first time this week. futures fell 1.5% to $ 81.67 a barrel.

The Baker Hughes plant count will later give new indications as to whether US producers are speeding up production plans in response to the recent price hike or whether they continue to prefer to repair balance sheets. CFTC net positioning data will complete the week. Data from last week showed that money managers weren’t overly long on oil, by historical standards.

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