The second week of November opens on a quiet note, with much of the focus still remaining on central banks, especially the Federal Reserve.
Six of the most important figures within the Fed, including Chair Jerome Powell, will give speeches today. These will be their first statements since last week’s monetary policy meeting where the Federal Reserve announced it would start tapering bond purchases but would not move up the date of the first possible interest rate hike.
In a somewhat similar vein, the Bank of Japan will publish a summary of the opinions of its own economists today. There will also be a speech by the Bank of England’s Governor Bailey.
In terms of the stock market, today US indices will make minor gains while the Fed speeches are going on, perhaps with the exception of the Nasdaq 100. That index, together with the S&P 500 (to a smaller extent) has taken a hit due to the drop in the value of Tesla’s shares after CEO Elon Musk announced he will be selling 10% of his stake in the company.
Musk, who is the richest person in the world, appears to be preparing for the new tax reforms led by the Democratic Party, which aim to impose a higher tax on income gained from stocks and other such investments above a certain income bracket. He previously stated that whatever tax reform gets passed, he will very likely be affected by it.
Meanwhile, Democrats are celebrating a half-win today. They finally managed to pass Joe Biden’s infrastructure stimulus bill through the House of Representatives. It was a hard-fought battle that lasted months on end and saw the bill decrease dramatically in size (it is now worth $1 trillion). Still, at least some of the proposals of the President, such as investment in better roads and electric vehicle infrastructure, are going to become a reality.
Another political development of interest today is the secret plenum of the Communist Party in China. This kind of meeting of the highest-ranking party members is usually used to decide on office appointments and such, but this time around many suspect that President Xi Jinping’s status will be the main topic. It is expected that he will be pronounced ‘President for life,’ which means he cannot be replaced through elections until his death.
