Developments in the US financial system and the Bush Administration’s plan to buy bad debts will no doubt be the key focus in the week ahead.
As will the various banks on short selling financial stocks in Australia, the US, UK, Ireland and several other countries.
We should get more detail today and tomorrow on the proposed legislation in the US which remains the key.
But a close watch should be kept on the flow of economic data this week because it will again emphasise that the root problem in the US remains the depressed housing sector, which is still continuing to pull down house prices, building and the financial sectors, along with retailing and several other sectors.
Figures for US house prices, existing homes sales, durable goods orders and consumer confidence will be released.
Economists say that US home sales and durable goods orders look to have fallen last month, indicating economic growth had already slowed heading into the latest financial meltdown.
Bloomberg reported that a survey of market economists found that combined sales of new and existing homes dropped to a 5.45 million annual pace last month, down 1.2% from July.
Durable goods orders probably fell 1.8% in the month. That was after a sharper than expected fall in industrial production.
Announcements on possible mergers and or major equity deals are possible for Morgan Stanley and for the embattled savings and loan Washington Mutual. Morgan Stanley is still supposed to be talking to US regional bank (and subprime mortgage victim) Wachovia.
In Australia, it will be a quiet week on the data front with only Australian Bureau of Statistics car sales out, as well as other figures for skilled vacancies and home sales.
An interim profit announcement is expected later today from Sigma Pharmaceuticals. Washington H. Soul Pattinson and Brickworks report their full year results later in the week.
David Jones full year figures are out midweek, and will show a solid rise in earnings. The retailer is expected to stick to its forecast of a small 5%-10% rise in earnings for 2009, with some rough quarterly sales figures though.
Later today the Australian Bureau of Agricultural and Resource Economics releases its latest estimate of 2008-09 commodity exports and production.
They will very likely show that the resources boom has faded away to be concentrated in the iron ore and coal industries, with perhaps some positive signs for uranium and copper.
The major release though is the RBA’s latest financial stability report on Thursday.
This is likely to show heightened concerns about financial stability in the wake of the ongoing credit crunch and turmoil in financial markets but indicate that the Australian financial system is weathering the storm well so far.
That’s what the RBA Governor, Glenn Stevens, said in the annual report last week and what the tenor of the operations part of the report also emphasised.
MONDAY:
The ABS releases new car sales figures for August; ABARE releases its September outlook on commodity prices, production and exports; Sigma Pharmaceuticals interim results; Amcil AGM, Melbourne
TUESDAY:
Woolworths CEO, Michael Luscombe due to speak to a Perth retailing conference.
WEDNESDAY:
Skilled vacancies figures from the Federal Department of Employment; David Jones full year results; ASX AGM in Sydney; Air New Zealand AGM, Auckland.
THURSDAY:
Reserve Bank releases the latest Financial Stability Report; the ABS releases demographic figures for the March quarter; Washington H. Soul Pattinson and Brickworks full year results due; Housing Industry Association new home sales figures for August; Nexus Energy AGM in Melbourne; Nufarm annual results; Mirrabooka AGM, Melbourne.
FRIDAY:
Energy One AGM, Sydney.
