Aurelia Butler

NEW YORK (Reuters) -The coming week will give investors a fresh view into the health of the U.S. economy with the release of a closely watched employment report that could help determine the trajectory of interest rates in the months ahead. Stocks are heading into December with the benchmark S&P 500 near record highs following an over 25% year-to-date gain. Part of that performance has been fueled by expectations that the Federal Reserve will continue cutting interest rates into next year, after reducing borrowing costs by 75 basis points in 2024. But uncertainty over the Fed’s rate trajectory has increased in recent months as a spate of robust economic data – including a blowout jobs report for September – stirs concerns that inflation could rebound if the central bank lowers rates too far, undoing two years of progress in tamping down prices. While investors have largely welcomed evidence of economic strength, another round of strong jobs data on Dec. 6 could further erode expectations for Fed cuts and fuel wariness over inflation, investors said.The jobs data “is going to provide a more clear picture of the underlying trend, which is important as there’s a lot of debate and uncertainty around the path for interest rates by the Fed,” said Angelo Kourkafas, senior investment strategist at Edward Jones. Wall Street has already tempered expectations for cuts over the coming year. Fed funds futures show investors betting the rate will fall to 3.8% by the end of next year, from its current 4.5% to 4.75% range. That is more than 100 points higher than what they had priced in September.  Fed Chair Jerome Powell said earlier this month that the central bank does not need to rush to lower rates, citing a solid job market and inflation that remains above its 2% target.The Fed is “starting to question out loud how much more easing the economy, especially the labor market, really needs,” said Sameer Samana, senior global market strategist at Wells Fargo (NYSE:WFC) Investment Institute.Futures late on Wednesday were pricing a roughly 70% chance that the central bank will cut rates by 25 basis points at its Dec 17-18 meeting, according to CME Fedwatch. Economists polled by Reuters expect payrolls to have climbed by 183,000 jobs in November, and a report that far exceeds those forecasts could shake confidence in a December move and bruise stocks, said Anthony Saglimbene, chief market strategist at Ameriprise Financial (NYSE:AMP).  “There might be a little bit of a sell off here if you see the jobs report come in stronger than expected,” he said. Equities have gotten a boost from the view that President-elect Donald Trump’s policies such as tax cuts and deregulation could spur growth despite their inflationary potential.Stocks in recent days largely shrugged off Trump’s pledge to impose big tariffs on Canada, Mexico and China, America’s three largest trading partners. More optimism was reflected in the Conference Board’s survey released on Tuesday, which showed a record 56.4% of consumers expect stock prices to increase over the next year.Meanwhile, the S&P 500 is trading at more than 22 times earnings estimates for the next 12 months, its highest P/E valuation in more than three years, according to LSEG Datastream. To strategists at Yardeni Research, the mounting optimism could be a worrisome signal.”A more immediate risk to the stock market rally than tariffs is that investors are getting too bullish,” Yardeni Research said in a note on Thursday. “From a contrarian perspective, this suggests that a pullback is likely.”text_section_type=”notes” >Wall St Week Ahead runs every Friday.  For the daily stock market report, please click [.N]   More

Le Pen has given Barnier until Monday to yield to budget demands from the National Rally (RN) or face the threat that they would back a likely no confidence motion against his government, which would trigger its collapse.”A vote against (the government) is not inevitable. All Barnier has to do is accept to negotiate,” Le Pen said in an interview with La Tribune newspaper.”There’s been talks for the last two weeks but clearly things haven’t moved ahead as we would have liked,” she added.Barnier already dropped a planned electricity tax increase last week, but the RN also wants him to raise pensions in line with inflation whereas he had aimed to raise some less than inflation to save money. The RN is also unhappy the government may raise tax on gas and wants a cut in France’s contribution to the European Union’s budget among other demands.The standoff could come to a head as early as Monday if Barnier has to use aggressive constitutional powers to force a social security financing bill through, which would inevitably trigger a no-confidence motion from the left.To survive the vote in the fractured lower house, Barnier needs the RN to abstain, otherwise his government and the budget bill could fall, plunging France deep into a political crisis.Finance Minister Antoine Armand warned in le Journal du Dimanche weekend newspaper that would mean special emergency legislation would have to be passed to ensure that there would be a budget at the start of the year.But it could only roll over spending limits and tax provisions from this year, which means pensions would get squeezed and tax thresholds would rise for 17 million people as neither could be adjusted for inflation.The growing uncertainty over France’s budget and the future of its government has put French debt and stocks under pressure, pushing the risk premium on the government’s bonds to a more than 12-year high last week.Standard & Poor’s offered some relief on Friday, leaving its AA- rating on French debt unchanged although it raised doubts about whether France could stick to the government’s deficit-reduction targets. More

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The new ministry would manage state revenues, including taxes, excises and mining royalties, Hashim said in a meeting of the Indonesian Chamber of Commerce and Industry. He didn’t say when the new ministry would be created.Prabowo would appoint deputy finance minister Anggito Abimanyu to lead the new ministry, according to Hashim.Among his campaign pledges, Prabowo planned to boost tax revenue to 18% of gross domestic product from around 10% currently, or about $100 billion in additional tax revenue, which included a plan to set up a state revenue agency. Indonesia’s finance ministry declined to comment on the matter.Hashim’s team and presidential spokesman did not immediately respond to a Reuters’ request for comment. More

(Reuters) – Joe Biden sets off for Angola on Sunday on a trip that will deliver on a promise to visit Africa during his presidency and focus on a major, U.S.-backed railway project that aims to divert critical minerals away from China. The project, partly funded with a U.S. loan, links the resource-rich Democratic Republic of Congo (DRC) and Zambia to the Angolan port of Lobito on the Atlantic Ocean, offering a fast and efficient route for exports to the West.At stake are vast supplies of minerals like copper and cobalt, which are found in Congo and are a key component of batteries and other electronics. China is the top player in Congo, which has become an increasing concern to Washington.China signed an agreement with Tanzania and Zambia in September to revive a rival railway line to Africa’s eastern coast. While Biden’s trip is taking place in the waning days of his presidency, Donald Trump will likely back the railway and remain a close partner to Angola when he returns to the White House in January, according to two officials who served under the previous Trump administration.Tibor Nagy, a retired career ambassador and top envoy to Africa under the last Trump administration, said Trump will likely have two overarching concerns regarding Africa. The first is competition with China and Russia, the second is access to critical minerals.“This checks both boxes,” he said in an interview, referring to the Lobito Atlantic Railway (LAR).The project is backed by global commodities trader Trafigura, Portuguese construction group Mota-Engil and railway operator Vecturis. The U.S. Development Finance Corporation has provided a $550 million loan to refurbish the 1,300-kilometre (800-mile) rail network from Lobito to Congo.  Biden was set to land briefly in West Africa’s Cape Verde on Monday morning, and meet the president there before flying on to Angola. He will visit the nation’s slavery museum in the capital Luanda during the two-day trip and stop at the Lobito port on Wednesday.His trip delivers on one of a sweeping set of pledges to Africa. Others remain unrealized, such as backing two permanent seats for Africa at the U.N. Security Council.Beyond the railway project, Washington has also done little to advance access to vast reserves of African minerals that it says are critical for national security, and has racked up other diplomatic setbacks.This summer, it lost America’s major spy base in Niger and has not been able to find an ally that will host those assets. This leaves the U.S. without military foothold in the vast Sahel region that has become a hotspot of Islamist militancy.Angola has long nurtured close ties with China and Russia but has recently moved closer to the West. Angolan officials say they are keen to work with any partner that can advance their agenda to promote economic growth and hope the project spurs investment in a range of sectors. “China has only gained prominence because Western countries have probably not been paying much attention to Africa,” Angola’s transport minister, Ricardo Viegas d’Abreu, said in an interview.GROWING TIES WITH ANGOLA Biden’s visit reflects a turnabout in U.S. ties with Angola after a complicated and bloody history. The U.S. and the Soviet Union backed rival sides in nation’s 27-year civil war. Washington established relations with Angola in 1993, almost two decades after it gained independence.“It’s probably poetic justice that the United States should finance the rehabilitation of this route to which it had contributed destruction so many decades ago,” said Akashambatwa Mbikusita-Lewanika, a former Zambian government minister who also ran part of the railway that is to form the Lobito corridor. Biden administration officials have said the Lobito rail project is not a one-off, but a test run to prove the private-public partnership works, and that it will lead to other major infrastructure projects in Africa. They also hope it will deepen U.S. ties with Angola, including in security cooperation. Critics have questioned whether the project, which has no date for completion, will deliver the promised goals. A particular source of scrutiny is a second phase, which would connect the railway to Africa’s east coast through to Tanzania, potentially offering a rival route to China.Judd Devermont, until recently Biden’s top Africa adviser, said Congo wants to diversify its mining partners and rejected the idea that connecting the project to an eastern port in Tanzania undermines the effort to loosen Beijing’s grip on Congo’s minerals.“The Congolese have been very clear that they don’t want to see their entire mining sector dominated by China,” he said in an interview. “It benefits everyone if there’s an easy way to move across the continent, whether that’s critical minerals or just moving stuff from India to Brazil to New York.” More