US June quarter GDP and July employment will be released in the week ahead and both are likely to tell different stories about where the American economy is right now.
In Australia building approvals and then retail sales figures for June will help position the Australian economy, along with the NAB’s latest business survey.
We will also learn more from the Reserve Bank’s credit figures for June and the trade figures for the same month will be released.
The trade figures should show more evidence of the surge in export income from higher oil, gas, coal and iron ore prices (and on the import side, the impact of higher oil and petrol costs). It will sum up the fears of the RBA that the rise in our terms of trade will send a rush of money and spending through the economy.
The Reserve Bank’s export commodity price index will show just how steeply the rise in export price has become following the record prices for coal, oil and iron ore.
Our retail trade credit and building approvals figures will show just how sluggish the domestic economy has become, as consumer confidence burbles along at a 17 year low, housing at similar levels and retail sales probably in the negative in June, which from anecdotal accounts, was a tough month for retailers.
Harvey Norman’s retail sales figures for the full year will also give us a good guide, especially those for the 4th quarter.
Our June 30 reporting season gathers pace with annual figures from Australian Foundation Investment Co today, Alesco Corporation tomorrow and Alumina on Thursday.
In America the first reading of second quarter economic growth could show an annual rate as high as 1.5%, thanks to the $US120 billion tax rebate which is exhausting itself.
A $US300 billion housing assistance and support package for Freddie Mac and Fannie Mae (there will not be any amount of money support mentioned in the legislation for either) has been passed by the US Senate and will be approved by president Bush.
There are estimates that up to 400,000 people who face pressure or foreclosure on their home mortgages might be helped, but that’s wishful thinking: there’s also a big tax credit for first home buyers buried in the legislation and several other lurks, plus help to the states to prevent foreclosures.
The Standard & Poor’s Case/Schiller home price index for June will again remind Americans just how far the housing market has fallen and whether an end or a bottoming out of that slump is in sight.
The key measure of confidence and activity in the huge US service sector, the main generator of growth in the US (with consumer spending the main part of that), will be updated this week: a small contraction is tipped by the market.
US employment data for July is out on Friday and will show a fall in jobs: there could be some significant revisions as well, just as there was in the June report. US unemployment was steady on 5.5% in June. Market forecasts are for the loss of 75,000 jobs in the month, which would push the loss so far this year to over 500,000.
This week’s GDP reading comes after reports on Friday showing US consumer sentiment rebounded in July from a 28-year low and business inventories rose unexpectedly last month. Data also revealed that June new-home sales were not as weak as expected: but they were still weak.
US domestic car vehicle sales are out on Friday and will confirm the continuing problems in the sector that saw Ford accelerate its changed program last week.
And, more than 100 companies in the Standard & Poor’s 500 are due to report earnings this week in what will be a hectic week for investors, which will also be keeping an eye of oil prices which are now off some $US23 a barrel.
Oil finished at a seven week low on Friday, but US bond yields remained well above 4% for the main indicator, the 10 year security.
MONDAY:
Australand Property interim results; Australian Foundation Investment Co final; Housing Industry Association new home sales for June; National Australia Bank second quarter business confidence survey’; Cape Lambert Iron Ore AGM in Perth; RBA Assistant Governor, Guy Debelle speaks at a debt conference in Sydney.
TUESDAY:
Alesco Corp final; Harvey Norman annual sales figures; Centennial Coal 2008 production report; the NAB’s agri-business survey for the second quarter.
WEDNESDAY:
Building approvals for June from the ABS; Lihir Gold half year production figures; Austar interim results.
THURSDAY:
Retail trade figures for June, International Trade for June and Economic Indicators for August from the ABS; Alumina interim; RBA releases the private credit figures for June.
FRIDAY:
RBA Commodity Price Index; the Australian Industry group, Price-Waterhouse-Coopers Performance of Australian Manufacturing Index for July.
