This week ahead || Nov 27th - Dec 1st

Inflation Gauges at 2021 Lows May Support End of Fed, ECB Hikes

In the upcoming week, the Federal Reserve is set to release its preferred measures, with the personal consumption expenditures price index expected to rise 3.1% in October. Euro-zone data for November is anticipated to show inflation at 2.7%. While disinflation progress is noted, officials on both sides of the Atlantic remain cautious. The Federal Reserve aims to be deliberate about its policy path, as indicated in the minutes of the last meeting. Additional key events include the release of the Beige Book, the US personal income and spending report, and Canada's third-quarter GDP data. Globally, central banks, including those in New Zealand and South Korea, are expected to maintain current interest rates.

Energised shoppers break one-day holiday sales record

Black Friday 2023 saw a surge in both in-store and online retail sales compared to the previous year, according to Mastercard's SpendingPulse. In-store sales increased by just over 1%, while e-commerce experienced a notable 8.5% boost. Sensormatic Solutions, tracking brick-and-mortar store visits, reported a 4.6% rise in foot traffic compared to 2022. This uptick surprised analysts, given a year-long trend of a 2.4% average decline in foot traffic. Adobe Analytics recorded a record $9.8 billion in Black Friday online sales, up 7.5% from the previous year, with mobile purchases accounting for $5.3 billion. "Buy now, pay later" plans also gained popularity, with 72% more shoppers using them compared to the previous week. E-commerce platform Shopify reported record global sales exceeding $4 billion, 22% higher than the previous year, with the average cart price for US consumers at $124.

5 big analyst AI moves: AI demand to keep tech rally intact; C3 upgraded

UBS investment strategists predict a continued rally in tech stocks, particularly in chip stocks and artificial intelligence (AI)-related sectors such as software and AI platforms. The Swiss investment bank anticipates strong momentum in the global semiconductor sector, with a potential for over 50% profit growth in 2024 and sustained momentum into 2025. UBS notes a positive outlook for AI infrastructure spending, projecting a 38% compound annual growth rate (CAGR) during 2022–2027, driven by ongoing demand for AI training and inference. Meanwhile, OpenAI's recent governance changes have attracted increased interest, with a surge in search volume for "OpenAI stock" and analysts expecting Microsoft's partnership with OpenAI to remain strong. Microsoft and Google are identified as best positioned in the productivity market, with Microsoft holding around 80% share of the $50 billion-plus productivity market. Additionally, Oppenheimer analysts upgraded C3.ai, recognizing its growth potential in the AI space. However, some analysts express caution about Palantir Technologies, citing potential downside and emphasizing the need for revenue growth to support stock appreciation.

Brookfield and EIG Revise Origin Energy Takeover Bid to $10.6 Billion

The consortium led by Brookfield Asset Management has revised its takeover offer for Origin Energy, proposing a new bid of US$10.6 billion excluding debt. This adjustment is in response to resistance from AustralianSuper, and the revised plan includes an alternative strategy to split Origin's operations between Brookfield and EIG Global Energy Partners if the deal faces challenges in gaining shareholder approval. The Toronto Stock Exchange (TSX) saw slight gains, with the composite index closing at 20,116.66 points, partly attributed to a modest increase in Manulife Financial Corp.'s stock. Meanwhile, Mastermind GP Inc., a specialty toy retailer, is dealing with a strike that started on September 28, impacting operations during the crucial holiday season. The TSX experienced a minor setback, dropping 13.55 points amid ongoing global financial market challenges.