The Week Ahead: Dell results, US PCE inflation, eurozone CPI

Thanksgiving brings a holiday-shortened trading week for US markets, which will be closed on Thursday before shutting early on Friday. As a result, the Federal Reserve will release the minutes from its 6-7 November meeting on Tuesday, a day earlier than usual. The minutes will set the stage for the Fed’s December meeting and its Summary of Economic Projections, typically released every other meeting, which may signal fewer interest rate cuts in 2025 than were forecast in September. But our main focus is on US computer maker Dell’s third-quarter earnings and inflation updates from the US, Germany and the eurozone. 

Dell Q3 results

Tuesday 26 November
Analysts expect Dell to report that per-share earnings increased 9% year-on-year to $2.05 in fiscal Q3 2025, with revenue growing 10.5% to $24.6bn. Much of the growth is likely to have come from the storage and networking unit known as Dell Infrastructure Solutions Group, where revenue is projected to have risen 33.4% to $11.3bn. Looking ahead, fourth-quarter earnings are forecast to grow 20.9% to $2.66 a share, with revenue increasing 14.1% to $25.4bn. The Infrastructure Solutions Group is projected to see a 30% increase in Q4 revenue to $12.1bn. Following the Q3 results, the Dell share price – which closed at $138.92 on Thursday, up more than 85% year-to-date – could rise or fall by 10.9%, based on options market pricing. 

Since early August, Dell shares – which rejoined the S&P 500 this year – have been trending upwards in a channel, as shown on the chart below. Additionally, the relative strength index, a measure of momentum, has climbed to a reading of 60. A value above 60 can indicate further upside potential. This month the stock has consolidated around $138. If it can break above this resistance level after the results, it could rise to around $147, the level of the June and July highs.

Dell Technologies share price, May 2024 - present

Sources: TradingView, Michael Kramer

US October PCE price index

Wednesday 27 November
The US personal consumption expenditures (PCE) price index, often referred to as the Fed’s preferred measure of inflation, is expected to have increased 2.3% in the year to October, up from 2.1% in September, based on analysts’ estimates. Meanwhile, the closely watched core PCE price index, which excludes volatile food and energy prices, is expected to have risen 2.8% year-on-year, up from 2.7% in September. Analyst estimates of PCE data have proven accurate in recent months, making major surprises unlikely. 

If the PCE figures for October align with forecasts again, the chances of an interest rate cut from the Fed in December could fade. An uptick in US inflation and the prospect of rates staying higher for longer could make dollar deposits more attractive, potentially further strengthening the dollar against the pound. Indeed, GBP/USD appears to be entering another downward move. On Friday the pound dipped below $1.25 for the first time since May. A close below this level could send the pound even lower in the near term, possibly towards the April low near $1.235.

GBP/USD, December 2023 - present

Sources: Bloomberg, Michael Kramer

Eurozone November CPI 

Friday 29 November
Inflation in the eurozone, as measured by the consumer price index (CPI), stood at 2% in October, in line with the European Central Bank’s target rate. The bloc’s CPI figure has hovered around 2% for a few months, having cooled to 2.2% in August, before falling to 1.7% in September, then ticking higher in October. 

A similar pattern has played out in Germany, the eurozone’s largest economy by GDP, where inflation eased to 1.9% in August, then fell to 1.6% in September, before moving back up to 2% in October.   

Germany will announce flash CPI data for November on Thursday, a day before the eurozone’s CPI figures for November are released. Germany’s announcement could offer an early indication of what the eurozone data might show. If figures from both Germany and the eurozone continue to align, investors may look to solidify their positions ahead of a potential ECB rate cut in December.

Economists estimate that inflation in Germany stayed flat at 2% in November, while in the wider eurozone it may have edged up slightly. There would be surprise among traders if November CPI readings from both Germany and the eurozone fell below 2%. That would suggest that the ECB may need to cut interest rates more aggressively, especially if economic growth figures remain weak.

Further ECB rate cuts could put EUR/USD under even more downward pressure. The euro has weakened significantly against the dollar and on Friday slipped below $1.04 for the first time since November 2022. If this level breaks, the pair could drop towards $1.03, the next support level. Beyond that, the euro could be on a path back to dollar parity, and the decline may not stop there.

EUR/USD, September 2022 - present

Sources: Bloomberg, Michael Kramer

Key economic and company events

The coming week’s major economic announcements and scheduled US and UK company reports include:

Monday 25 November

• Germany: November IFO business sentiment index 
• Results: Agilent Technologies (Q4), Bath & Body Works (Q3), Zoom (Q3)

Tuesday 26 November

• US: Federal Open Market Committee (FOMC) meeting minutes
• Results: Abercrombie & Fitch (Q3), Analog Devices (Q4), AO World (HY), Autodesk (Q3), Best Buy (Q3), CrowdStrike (Q3), Dell (Q3), Dick's Sporting Goods (Q3), Halfords (HY), HP (Q4), JM Smucker (Q2), Macy’s (Q3), Manchester United (Q1), Workday (Q3)

Wednesday 27 November

• Australia: October consumer price index (CPI)
• New Zealand: Reserve Bank of New Zealand interest rate decision
• US: October personal consumption expenditures (PCE) price index, Q3 gross domestic product (GDP)
• Results: Frontline (Q3), Pennon (HY), Pets at Home (HY)

Thursday 28 November

• Germany: November CPI
• Japan: November Tokyo CPI
• US: Thanksgiving (markets closed)
• Results: No major scheduled announcements

Friday 29 November

• Canada: Q3 GDP
• Eurozone: November CPI
• Germany: October retail sales
• Switzerland: Q3 GDP
• Results: No major scheduled announcements

Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.