Apart from the June quarter consumer price figures, Australian business and investment will again be dominated by events overseas and the local reaction to them.
Resource stocks are on the slide as commodity prices continue to tumble, as they did again Friday.
BHP Billiton, Rio Tinto and other shares were weaker here and in London on Friday night.
There’s increasing doubt about the BHP bid for Rio and worries that the oil price has further to fall, reducing the premium built into the BHP share price.
BHP’s Wednesday’s production report for its 4th quarter and 2008 financial year will go a long way to sorting out the immediate path for the bid and investor thinking.
Last week’s 2nd quarter and first half production report from Rio was quite strong and there was no adverse comment and sniping from BHP and its advisers.
Other production reports this week will come from Santos, Newcrest and Oxiana (Oz Minerals).
The first significant 2008 financial year result is scheduled for Thursday when GUD Holdings releases its figures.
Its comments on its Sunbeam sales into the retail sector and the performance of its industrial productions division (water pumps etc) will provide a glimpse into how the slowing economy has hurt two key sectors in the past few months.
Lion Nathan provides a trading update as well.
Overseas, it’s the price of oil and the second quarter reporting season in the US that will be the major influences.
For the moment the mortgage monsters, Fannie Mae and Freddie Mac seem to be settled: Freddie is on the path to attempting to raise $US5.6 billion in fresh capital. With the implicit support of the US Government, it should get that money in quite easily.
More bank earnings lie ahead: Bank of America Corp, the No. 2 US bank, reports tonight, our time; while reports from stretched regional banks will be in the spotlight with reports from Regions Financial Corp, Fifth Third Bancorp (which has already had one capital injection), SunTrust Banks and Wachovia (which has also had a huge capital injection to try and stabilise its balance sheet and keep investors confident).
Major industrial stocks, including Drug giant Pfizer, Telco, AT&T and Caterpillar, as well as Apple and Yahoo!, are all due to report and could influence investor confidence, especially Caterpillar which is a good stock by which to measure US domestic and export performance.
Tonight sees the start of an emergency rule introduced by the US Securities and Exchange Commission that will limit certain types of short selling in the stocks of 19 major financial companies, including all the major investment banks as well as Fannie Mae and Freddie Mac.
Market makers in options and equities markets have been exempted by the curb, which is designed to eliminate so-called ‘naked’ short selling in these shares for the next 30 days at least.
There will be speeches by a couple of senior Fed officials: Federal Reserve Bank of Philadelphia president Charles Plosser and Timothy Geithner, the president of the Federal Reserve Bank of New York, who is scheduled to testify before a House Financial Services Committee hearing on Thursday.
Investors will get more insight into the problematic US housing market on Thursday and Friday when June existing home sales and new home sales will be released.
Friday sees the release of the Reuters/University of Michigan sentiment survey’s final July reading.
And the New Zealand Reserve Bank’s decision on its official rate will be made public this Thursday morning.
There is a strong chance the slumping economy could force the bank’s Governor, Dr Alan Bollard, to cut the rate from its current 8.25% this month, instead of in September when it was expected. The NZ economy has weakened much faster than expected.
MONDAY:
The ABS releases producer price indexes for June quarter and 2007-08 and new car sales for June.
TUESDAY:
Quarterly production reports from Oxiana, Sino Gold and Oil Search.
WEDNESDAY:
BHP Billiton 4th quarter and full year production report; ABS releases the June quarter and 2007-08 CPI figures; Social trends 2008 from the ABS; Macquarie Group AGM in Melbourne; Namoi Cotton AGM, NSW.
THURSDAY:
GUD Holdings full year profit; Lion Nathan third quarter trading update; Santos second quarter production report; Newcrest 4th quarter and full year production report.
FRIDAY:
Housing Industry Association’s June quarter trades report; Centro Properties class action back in the Federal Court in Melbourne.
