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Top 5 Things to Know in the Market on Friday

Investing.com -- Alibaba (NYSE:BABA) completes the year's biggest stock sale in a simmering Hong Kong, while U.S. retail sales and industrial output data will show how strongly the U.S. economy started the fourth quarter. The IEA predicts a tough time for OPEC and its allies next year, while the U.K. Labour amps up its Socialist credentials ahead of a general election next month. Here's what you need to know in financial markets on Friday, 15th November.

1. Alibaba's monster offering in Hong Kong

Alibaba (NYSE:BABA) completed the world’s biggest share offering so far this year, placing as much as 575 million new shares at a price of around $24.01 in a listing on the Hong Kong Stock Exchange.

That means the total offering will raise as much as $13.8 billion if the ‘greenshoe’ option is exercised fully.

The deal comes at a critical juncture for Hong Kong and its stock market after a week of intensified and frequently violent protests (the authorities blamed demonstrators Friday for killing a 70-year old cleaner, a bystander at one protest, with a brick).

President Xi Jinping said that restoring order is the city’s “most urgent task” and called on the city’s leader Carrie Lam to take more decisive action.

2. Key data on retail sales, industrial output due

U.S. retail sales and industrial production data for October will show how much momentum the U.S. economy carried into the fourth quarter, a day after the comparable figures from China both came out weaker than expected. They come after two days of Congressional testimony by Federal Reserve Chairman Jerome Powell that confirmed there will likely be no further U.S. rate cuts unless the economy weakens significantly.

Retail sales (due at 7:30 AM ET or 1230 GMT) are expected to have rebounded 0.2% from September’s shock decline, while core retail sales, which exclude autos, are expected to have risen a more robust 0.4%.

Industrial production figures, which are announced 45 minutes later at 8:15 AM ET (1315 GMT), are more of a cause for concern. Analysts predict another 0.4% drop from September, with manufacturing production expected to drop 0.6%.

3. Stocks lifted by Kudlow comments on trade deal

U.S. stock markets are set to open higher in the absence – for now - of any major crackdown by Beijing in Hong Kong. Comments by White House economic advisor Larry Kudlow that a trade deal with China is close are also supporting sentiment.

The S&P 500 futures contract hit a new all-time high of 3,110.38 overnight but had retraced a little to hold just above 3,100 by 6:30 AM ET (1130 GMT), up 0.2% from late Friday. Dow futures were also up 0.2%, while Nasdaq 100 futures were up 0.3%, helped by stronger-than-expected earnings after the close on Thursday by chipmaker Nvidia.

Nvidia’s numbers more or less wrapped up this week’s earnings dump.

4. IEA predicts ample oil supply in 2020

The International Energy Agency warned that OPEC and its Russian-led allies face a “major challenge” in balancing the oil market next year, as some 2.3 million barrels a day of capacity comes online in other countries around the world.

The IEA left its estimate for oil demand growth next year unchanged at only 1.2 million barrels a day, far less than the projected increase in non-OPEC supply. The so-called OPEC+ group is due to review its existing deal on output restraint, which keeps 1.2 million barrels a day off the market, in the first week of December. So far, its members have resisted the idea of deepening production cuts any further.

The IEA said it expects U.S. demand growth to rise 190,000 b/d next year after remaining flat in the first three quarters of 2019. Chinese demand growth is expected to slow to 375,000 b/d from 600,00 b/d.

U.S. crude prices are on course to end the week roughly where they started it. They were down 0.4% at $56.58 as of 6:30 AM ET.

5. U.K. Labour to tax Silicon Valley to pay for telecom nationalization

The U.K. Labour Party dramatically expanded its plans to renationalize parts of the economy sold into private hands by Margaret Thatcher some 30 years ago.

The party’s finance spokesman John McDonnell said a Labour government would nationalize the last-mile infrastructure arm of telecoms group BT, known as Openreach, and deliver free broadband to every home and business by 2030. He said the plans would be paid for by higher taxes on digital giants such as Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) unit Google.

The news sent BT shares down as much as 4% and hit independent competitors such as mid-cap stock Talk Talk even harder.

However, there are several strong reasons to think the plans won’t ever see the light of day.

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