UK Budget, US data, Apple and Facebook results
The FT's Veronica Kan-Dapaah previews some of the big stories to watch this week, including the autumn UK Budget speech, US non-farm payroll and manufacturing data, Apple and Facebook results, and the third EU-Arab World Summit
Written by Chris Giles, Tim Bradshaw, Mamta Badkar and Simon Greaves. Filmed by Petros Gioumpasis. Produced by James Sandy
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Here are some of the big stories we'll be watching this week. Chancellor Philip Hammond will deliver this year's UK budget speech. Investors will be looking out for US non-farm payroll and manufacturing data. Apple and Facebook will announce their latest results. And Athens will host the third EU-Arab summit.
First up, Chancellor Philip Hammond will deliver the UK Budget speech on Monday. The speech comes after an autumn Conservative party conference during which Prime Minister Theresa May claimed that austerity was coming to an end. In the short term, Mr Hammond can count on a significant forecast upgrade to the UK's public finances, allowing increased public spending without extra borrowing or higher taxes. But the Budget will not take into account the kind of Brexit the prime minister is able to secure. And regardless of the Brexit process, the bills are still likely to mount in the 2020s, as our economics editor Chris Giles explains.
In some ways, the big news in the Budget is likely to be the messaging that the chancellor gives. And I think it will be twofold. One is that there's big bonuses out there if we get a decent Brexit deal. The forecast could be revised up again. This is his deal dividend he's going to talk about.
But the second big message I think the chancellor is going to give is that if we want to end austerity give a significant boost to health spending in this country, then in the long term, there will still need to be some big tax increases coming. Not immediately, but in the 2020s, when the upgrade from the forecasts runs out, but the increased spending that we need to ensure we have decent health and decent public services creates more and more pressure on the government.
Now to the US, where non-farm payrolls and manufacturing data will come into focus this week. The non-farm payroll report on Friday is likely to show hiring picked up in October, with the US economy expected to have created 189,000 jobs. Meanwhile, economists expect a slide in the Institute of Supply Management's manufacturing index, down to 59.5 from 59.8 the previous month. Mamta Badkar has more.
Investors will be looking for a few key things in next week's report when it comes to US jobs. The key figure will be average hourly earnings as investors try to assess whether the Fed is going to be more aggressive with rate rises going forward. Now, this report comes at a time when President Trump has said the Fed has gone crazy, and it is out of control when it comes to rising interest rates. In a recent interview with the Wall Street Journal, he also said that it's too soon to tell, but maybe he regrets having nominated Jay Powell for Fed chair. When it comes to manufacturing, the key thing investors will be watching for is, are manufacturers saying that they are being impacted by the ongoing trade war between the US and China?
Three months ago, Apple and Facebook both surprised Wall Street with their quarterly earnings reports, but in very different ways. Facebook shocked investors by warning of a slowdown in user and sales growth, while Apple defied the doubters by showing continued strength in iPhone sales. Now, the pressure is on for Apple to prove that it can sustain that momentum into the new generation of iPhones, while Facebook investors will be hoping that the last quarter was just a bump in the road as the company strives for 3bn users.
For Facebook's earnings on Tuesday, the real question is whether we are going to see a continuation of the slowing revenue growth that really spooked investors there months ago, wiping more than $100bn off its market capitalisation in just a few hours. For Apple, this is the end of the iPhone cycle and the beginning of the next. So the new iPhone XS Max, which costs upwards of $1,100, went on sale in the final couple of weeks of the quarter. The more affordable iPhone XR just went on sale on Friday. Some analysts are expecting it could be a $1.5tn trillion after crossing the $1tn mark, but we'll have to see if it can maintain the momentum that it's shown over the last few quarters.
And finally, organisers of the third EU-Arab World Summit say it aims to foster interactions. Heads of state, government ministers, academics, and business leaders will meet in Athens on Monday and Tuesday. On the agenda, energy use, migration and culture, as well as shared political and economic concerns. As Tony Barber reports, however, the summit is held amid international furore over the killing of Saudi journalist Jamal Khashoggi.
The president of the European Council, Donald Tusk, has said that the EU response mustn't have any hint of hypocrisy, or covering things up, helping to cover things up. Germany suspended arms sales to Saudi Arabia. So the European Union's response to the murder of the Saudi journalist, it's quite firm. And I think at the back of their minds is this triangular relationship that they have with Turkey on the one hand, Iran on the other, and Arab states led by Saudi Arabia on the third side.
And that's what the week ahead looks like from the Financial Times in London.