NEW YORK (CNN/Money) -
Oil prices, which fell sharply this past week, are poised to be a key driver of U.S. markets this coming week, which concludes with an OPEC meeting on Friday.
Since oil prices reached $50.03 a barrel midday on Tuesday, prices have fallen $7.49, to close Friday trading at $42.54 a barrel. That's helped lift U.S. stocks even in the face of some weak economic news. Without much in the way of major economic reports or earnings due this week, oil could again spur markets.
"The speculators are going to have a field day playing with emotion and rumor," said Oppenheimer oil analyst Fadel Gheit. But he said the recent drop in oil will increase pressure within OPEC to limit supplies.
OPEC President Purnomo Yusgiantoro of Indonesia said Friday that despite the price slide, he expected the 11-member group to keep quotas unchanged at 27 million barrels. But another unnamed senior OPEC official Reuters that, "If you see the slide continuing we may have to take some action," to cut production.
"We've given them enough of a scare the last few days, a preview of things to come when demand is not strong," said Gheit. He said if the U.S. report due Wednesday morning again shows a strong increase in fuel inventories, "we'll see a similar decline," he said.
A look at techs
This week will also give analysts a chance to get a closer look at some leading tech companies that are all set to hold analyst conferences early in the week.
Cisco's analyst meeting runs from Monday afternoon through Wednesday, with Chairman and CEO John Chambers and CFO Dennis Powell set to speak Tuesday morning on the West Coast.
Hewlett Packard is also holding its analyst meeting Tuesday, as is chipmaker Intel. Intel's bullish outlook this past Thursday during its mid-quarter update helped the entire tech sector Friday.
Chipmaker Texas Instruments (Research) holds its own mid-quarter update just after the market close Tuesday as well.
Retail analysts and economists will also be weighing the Saturday report from Wal-Mart Stores Inc. that it saw stronger food sales but weaker sales of other merchandise in the week ending Friday. The company's warning of weaker-than-expected November sales the Saturday of Thanksgiving weekend was a harbinger of disappointing chain store sales reported later in the week. This latest report gives a look at results the final two days of that four-day weekend, as well as the first full week of the holiday shopping season.
And while there are few significant earnings reports this week, retail analysts will get to look at results from wholesale club Costco (Research) and grocer Kroger (Research). Analysts surveyed by earnings tracker First Call forecast that Kroger, reporting Tuesday, will see earnings per share gain 58 percent to 24 cents. They also expect Costco to see earnings per share rise 19 percent to 40 cents when it reports before the bell Thursday.
Sinking dollar
The dollar continued its string of record lows against the euro this past week, but currency analysts say the slide could stall in the week ahead as the Dec. 14 meeting of the Federal Reserve approaches.
"Now that the Fed's tightening is expected to carry well into first quarter, currency markets could prove rewarding to the dollar ahead of the December meeting," said Ashraf Laidi, chief currency analyst for MG Financial Group. "We still stand by our call expecting the dollar to reach a short-term bottom at $1.36 by year-end."
But the weak jobs report Friday ended a brief rebound the dollar had seen on Thursday, and a number of economic reports due this week could spark another decline in the U.S. currency.
The reports due this week include:
- Tuesday's reports on productivity gains in the third quarter as well as the amount of consumer credit in the economy. Economists surveyed by Briefing.com forecast that the third quarter productivity gain should be left unchanged at 1.9 percent, the same as the initial reading for the period. The amount of debt is forecast to have fallen to $6.3 billion in October from $9.8 billion in September.
- Initial jobless claims will be closely watched after Friday's disappointing report. The previous week's number of those filing for initial claims rose to an unexpected 349,000.
- Also due Thursday are reports on wholesale inventories as well as import and export prices. Wholesale inventories are forecast to be up 0.6 percent for October after a 0.5 percent gain in September.
- Friday comes reports on wholesale prices in November, along with a preliminary reading on consumer confidence in December from the University of Michigan. Economists are forecasting the producer price index to be up 0.2 percent, far less than the 1.7 percent spike seen in October, while wholesale prices excluding food and energy are expected to increase 0.2 percent, rather than the 0.3 percent rise the previous month. Michigan's consumer confidence index is forecast to rise to 95.3 from 92.8 at the end of November.
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