U.S. Sanctions on Iran Oil Take Effect, and the Fed Will Meet on Rates

Here’s what to expect in the week ahead:


Exports of Iranian oil to drop as U.S. sanctions begin.

American sanctions on Iranian oil exports officially resume on Monday morning, the most important action the Trump administration has taken against Tehran since the United States withdrew from the Iran nuclear deal. Fearing reprisals, European and Asian companies have already cut back purchases of Iranian oil. Experts doubt that Washington can stop all Iranian oil exports — and the administration announced on Friday that it was exempting eight countries from the sanctions. But shipments from Iran are expected to drop by as much as 1.7 million barrels a day. With Saudi, Russian and American production climbing and global economic growth slowing, oil prices have fallen in recent weeks.

— Clifford Krauss


Hiring is getting harder as the labor market tightens.

The jobs report on Friday showed that the labor market’s record run continued in October, with employers adding 250,000 jobs and the unemployment rate staying at a nearly 50-year low. Separate data from the Labor Department on Tuesday will paint a more detailed picture of how hard it has gotten for companies to hire. In August, there were 114 job openings for every 100 unemployed workers, the most lopsided ratio on record, and the gap probably widened in September. Employees, meanwhile, are quitting their jobs at the highest rate since 2001, a sign they are gaining the confidence to shop around for better opportunities. Economists will be watching both measures for evidence that employers will be forced to offer bigger raises to attract and retain workers.

— Ben Casselman


BMW, caught in middle of trade war, will report earnings.

BMW will publish its third-quarter earnings on Wednesday, and they are likely to provide more detail about how much damage it has suffered from President Trump’s trade war. BMW’s factory in Spartanburg, S.C., which produces sport utility vehicles popular in China, has been caught in the crossfire of tit-for-tat tariffs. BMW, based in Germany, already warned in September that profit would be less than earlier forecasts, in part because of trade tensions.

— Jack Ewing


Fed to meet, but a rate rise is not expected.

The Federal Reserve's policymaking committee meets this week, but changes in policy are not on the menu. The Fed raised its benchmark interest rate by a quarter-point at its last meeting, in September, and it is widely expected to raise rates by another quarter-point at its next meeting, in December. This week, the Fed is just passing time. The committee usually meets on Tuesday and Wednesday, but this week's meeting is on Wednesday and Thursday, avoiding a conflict with Election Day. One mildly interesting milestone: This will be the last committee meeting that is not followed by a news conference. The Fed's chairman, Jerome H. Powell, has announced that he will hold a news conference after each of the Fed's eight meetings next year, an increase from the current schedule of quarterly news conferences.

— Binyamin Appelbaum


Disney theme parks expected to contribute to strong earnings.

Disney shares climbed 12 percent from early July to the end of September, far outpacing growth by the Standard & Poor’s 500-stock index. When Disney reports earnings for that period on Thursday, investors are expecting the company’s momentum to continue. Per-share earnings should total $1.33, a 24 percent increase from the same quarter a year earlier, according to analysts’ estimates. Contributing will be Disney’s vast theme park business, which has been white-hot — the result of new attractions, higher prices and a strong economy in the United States. Television, which is Disney’s largest business, should have a solid quarter (unlike a year ago), along with Walt Disney Studios, which released “Ant-Man and the Wasp” to blockbuster ticket sales in July.

One area of potential weakness: Disney Consumer Products, which has reported declines in profit for the last four quarters. The troubled division, Disney’s smallest, has suffered from weakness in big franchises like “Star Wars” and broader tumult in the toy marketplace.

— Brooks Barnes


E.U. ministers to discuss trade relations and the W.T.O.

Foreign ministers of European Union countries will meet on Friday in Brussels to discuss trade relations with the United States and reform of the World Trade Organization. Many of the European leaders will be hoping that, with the midterm elections over, chances will improve for a deal that would ease tensions. Behind the scenes, officials from the United States and the European Union have been discussing ways to harmonize regulations of goods like pharmaceuticals and autos, which would lower costs for companies and consumers on both sides of the Atlantic.

— Jack Ewing

Source: Read Full Article