Fed meeting notes, manufacturing data and GM sales: 3 things to watch for Friday

Federal Reserve Chair Jerome Powell arrives for a news conference following the Federal Open Market Committee meeting in Washington, December 11, 2019.
Joshua Roberts | Reuters

Here's what you need to know about Friday before you hit the door.

Fed Minutes

The Federal Reserve will release the minutes from its December meeting on Friday. The central bank held its benchmark interest rate steady last month after three cuts earlier in the year.

The market will likely be looking for hints about what may change the Fed's outlook on rates in the near future. The December "dot plot" of individual member's projections of rates going forward indicated no hike this year, a decision that helped boost markets last month.

The December decision was less contentious than other recent meetings, with all members of the open market committee agreeing to keep the interest rate steady. The committee saw division in 2019, including three dissents in September as hawkish and dovish members argued for different policies.

The Fed minutes may also shine some light on how the central bankers are thinking about the repo market, where the Fed has been active over the last several months in an effort to control overnight interest rates.

The Fed's next meeting is at the end of January. The market is currently pricing in a 94% chance of the bank holding rates steady again, according to the CME Group's FedWatch tool.

ISM manufacturing data

The Institute for Supply Management will release its latest report on Friday morning, including the purchasing managers' index that is closely watched by investors.

The PMI index is calculated so that readings above 50 represent expansion in the manufacturing sector and readings below 50 represent contraction. The consensus estimate is 49, according to economists polled by Dow Jones. The reading last month was 48.1.

If the PMI comes in below 50 again, it will be the fifth consecutive month of retraction.

The Department of Commerce is scheduled to release data on construction spending at the same time the ISM data is released. The consensus estimate is for an increase of 0.4%, according to economists polled by Dow Jones. Last month, construction spending fell by 0.8%.

Auto sales

General Motors will release its end of year sales data on Friday.

The automaker reported previously reported that deliveries for the third quarter increased 6.3% year over year, coming in at nearly 740,000. Sales for the two earlier quarters last year were both down compared with the same time period in 2018.

The legacy car company reported total deliveries of 2.94 million for all of 2018.

A strike by the United Auto Workers was one of the dominant stories for GM last year, and the work stoppage partially occurred in the fourth quarter. A new agreement was ratified on Oct. 25 after a 40-day strike, which cost the company more than $2 billion.

Major events (all times Eastern)

10:00 a.m. Construction spending

10:00 a.m. ISM report

2:00 pm Federal Reserve Minutes