Jobs figures here, stimulus packages here and in the US, a banking bailout package, also in the US and our interim reporting season, with attention on Rio Tinto’s full year results, and hopefully assets sales details this week. That’s a full list of factors to watch for in the week ahead.
In a big week for corporate results, Rio Tinto stands out given its huge debt, weakened prospects and falling commodity prices.
Its results will be very different to the interim figures for BHP Billiton last week.
Weekend media reports in the US and UK suggest Rio is considering a possible asset sale to Japan’s Mitsui & Co in a deal that may result in proceeds of $US5 billion.
There have been stories that Rio is talking to big shareholder, Chinalco of China, about possible asset sales and capital injections, as well as reports that the company could be looking to raise up to $US15 billion via a huge rights issue and placement. Some or all are possible, apparently.
We will know more when Rio reports on Thursday.
This week will also see the Commonwealth Bank provide more detail on earnings after its bullish interim update last week.
JB Hi-Fi’s figures will probably not be a good guide to the health of the retailing sector, as the company has been outperforming its peers for 18 months now.
But Boral will confirm its sharply lowered guidance for the interim and full year because of the housing slump here and in the US; Stockland will confirm lowered results for both the half and full year as the property sector here and offshore worsens; Coca-Cola Amatil full year figure should be solid, but the bid from Lion Nathan is now dead.
Besides Rio, gold miner Newcrest will confirm the preliminary figures given with last week’s $750 million capital raising.
The AMP’s chief economist, Dr Shane Oliver says overall, 2009 interim profits are likely to be down slightly on the December half 2007 led particularly by consumer discretionary stocks, financials and US exposed companies.
"Cuts to dividends and more capital raisings are likely to be key themes as companies try to swap difficult to obtain and expensive debt for equity capital. Given the economic uncertainty, a key focus will be on the outlook statements released by companies."
Besides the continuing discussion and debate over the economic stimulus package, this week will see the January jobs figures for Australia released on Thursday. A rise in the unemployment rate to around 4.6% is tipped from 4.5% in December. Job losses of over 10,000 could be reported for the month.
The ANZ newspaper and internet job ads series, out later today, will have more bad news for the economy.
As well we will get housing finance, consumer confidence and job vacancies data, plus the National Australia Bank’s latest business survey.
In the US the focus will likely be on the progress of President Obama’s stimulus package through Congress after the apparent deal at the weekend.
We will now get the revamped bank bailout plan in a speech early Wednesday morning, our time after the US treasury postponed the announcement for a day to allow the overall stimulus package vote to happen in the Senate.
This is likely to include government guarantees limiting losses on bad debts on banks’ balance sheets and some form of test on a bank’s health.
Controls on bonuses and salaries for executives will also be revealed in some form.
Fed Chairman Ben Bernanke appears at the Joint Economic Committee of Congress Wednesday night, our time. He will no doubt talk about the two packages for banks and the economy, housing, bond buying by the Fed and the economy.
The minutes from the Fed’s last meeting along with key data for retail sales, consumer sentiment and the trade balance will also be released.
In US corporate results for the Coca-Cola Company and struggling entertainment and media giant Viacom will report.
Viacom, whose big shareholder, Sumner Redstone is trying to sell assets to raise cash to meet demands from his bankers, will be watched closely after News Corp, Time Warner and CBS (which is also controlled by Redstone) wrote down the value of intangible assets by well over $US47 billion for the December quarter.
Financials helped spur the rally late in the week, but the week’s other standout was the technology sector.
