Next Week’s Menu: December 20-27, 2019

December 20, 2019

The coming week is the last full one of the 20-teens. It’s hard to believe that the 21st century is almost one-fifth completed.

Holidays: Many markets will be shut all day or earlier than normal on Tuesday, Wednesday, and/or Thursday for Christmas Eve, Christmas Day, and Boxing Day. This sequence tends to squelch activity the most when as in 2019 Christmas fall on Wednesday. An incomplete list of countries affected includes for Tuesday France, Singapore, the U.K., Hong Kong, Switzerland, Germany, Indonesia, Italy, Brazil and Norway. U.S. markets close early. Closures on Wednesday include the U.S., South Africa, Mexico, Italy, Indonesia, Brazil, Spain, Norway, Great Britain, Singapore, South Korea, Hong Kong, France, Canada, Switzerland, Australia and New Zealand. On Thursday, Australia, France, Canada, the U.K., Switzerland, Norway, Spain, Italy, Germany and South Africa. The two most influential markets open all week will be China and Japan.

A parenthetical historical note regarding Japan and Christmas is occurred on December 25, 1989, when newly minted Bank of Japan Governor Mieno and the rest of the Policy Board announced a big discount rate after an unscheduled meeting. There has already been a large rate hike the month before, and no further action in 1989 had been anticipated. Inflation was rising in Japan and most everywhere else back then, and Mieno was mindful of the need to look tough on inflation in order to solidify his credibility early. The move caught a banking system that was overleveraged and far more fragile than realized, and the tightening backfired horribly. One week later on the final working day of 1989, the Nikkei-225 index closed at an all-time high of 38,916. Three decades later, Japan’s stock market is still 38.8% weaker than that peak. For those who maintain that equities always do well in the long run, Japan’s experience provides a sobering warning that no investment advice is true all the time.

Trump Impeachment: Although the House of Representatives has approved two articles of impeachment against the U.S. president, the timing of a trial in the senate and indeed even if such a trial will ever occur is now in doubt because of a new disagreement between House Democrats and senate Republicans over procedural rules in that trial. Congress is in recess, and the earliest start of a trial would be at least beyond the first week of 2020. That doesn’t preclude impeachment news in the days just ahead, as the two sides try to find common ground on such things as who may be called to testify.

Central Banks: Monetary policy reviews are scheduled in Taiwan and Sri Lanka. The Bank of Japan will publish minutes from its end-October meeting and a summary of findings at its more recent final 2019 review held this past week.

Scheduled Japanese Data Releases: Industrial production, retail sales, unemployment, housing starts, construction orders, Tokyo consumer prices, corporate service prices, supermarket sales, the all industry index, and the index of leading economic indicators.

Other Selected Asian Releases: China’s 3Q current account and monthly corporate profits. Singaporean and Filipino producer prices.

Members of the Euro Area: German and Spanish retail sales. Finnish and Spanish producer prices. Dutch current account. Austrian industrial production and manufacturing purchasing managers index.

U.K. and Switzerland: British Nationwide house price index and BBA-compiled mortgage approvals. Swiss M3 money growth, ZEW expectations index of investor sentiment, and KOF index of leading economic indicators.

Eastern European Releases: Hungary’s trade balance. Czech consumer confidence and business sentiment.

U.S. Data Reports: Durable goods orders, new home sales, Richmond Fed manufacturing index, and Chicago Fed National Activity index.

Australia and South Africa: Australian private credit growth. South African trade balance.

Canada, Brazil and Mexico: Canadian October monthly GDP and industrial production. Brazilian and Mexican unemployment. Mexican economic activity index.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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