Figures here, figures there: it’s another solid week in the data flow for the economy, as well while in America where there’s a flood of quarterly results and figures that could very well swamp the rebound that continued for a sixth week last week.
Almost 150 companies in the Standard & Poor’s 500 Index are due to publish quarterly results this week, including a third of the 30 companies in the Dow.
As well, we’ll get an update on the health of the world economy from the IMF’s latest World Economic Forecast which is out next Wednesday night, our time.
In Australia, the RBA’s Board minutes will be pondered over to decipher what the RBA’s next monetary policy move might be as will a speech by RBA Governor Glenn Stevens on Tuesday.
The minutes of the April 7 Reserve Bank board meeting are out tomorrow before Mr Stevens speaks.
Both will enable us to view the RBA’s thinking from the March board meeting which cut rates by 0.25% and left no sign of when the bank might look again at another cut.
We were left with an impression that the cuts would flow normally, rather than quickly, as they have done since late last year as the bank cut rates to give the economy room to absorb the shockwave from the collapse of Leman Brothers and the world economy from September-October onwards.
That will come a day before the March quarter Consumer Price Index figures are released. Producer prices will be released later this morning. And new car sales figures for March from the ABS Thursday.
The CPI figures are likely to show that inflation fell to 3.2% year-on-year from 3.7% in the December quarter.
The AMP’s Dr Shane Oliver says that "falls are likely in prices for petrol, cars and deposit and loan facilities, but the normal seasonal increases in education and health costs and some flow through from the lower $A to higher import costs will limit the decline and keep underlying inflation up at 3.8% year on year (or 0.7% quarter on quarter)".
"As the year progresses inflation is likely to fall sharply as tough economic conditions and slowing wages lead to increased price discounting."
"Data for skilled vacancies and car sales is likely to remain weak."
Rio Tinto holds its annual meeting today. It won’t be sedate, especially when the failure to link with BHP Billiton, and then the Chinalco deal, are discussed.
In addition ERA, Rio’s uranium mining subsidiary holds its AGM on Wednesday.
Poker machine group, Aristocrat Leisure holds its AGM tomorrow. 2008 was a tough year for the company with multiple downgrades and management changes.
2009 is not going all that well for the gambling industries with several big casino and gaming groups in North America in trouble or bankrupt and Nevada gaming revenues down and still weak.
The OZ Minerals AGM on Wednesday will probably be as noisy and controversial as Rio’s. OZ though has been forced to sell off much of itself to Minmetals of China to stay alive.
Caltex Australia holds its AGM on Thursday, as does Spark Infrastructure.
BHP’s third quarter production report on Wednesday and it will be examined to see how the world’s biggest miner is riding out the global slump, especially in iron ore and coal.
In the US, data for house prices, home sales, durable goods orders and a leading index of the economy will be released.
US home sales data will be watched closely given recent indications they may be bottoming, although the figures for new home starts and permits last week for March were not as encouraging as in the month before. Home foreclosures are soaring as unemployment rises (it was up in 46 American states in March).
A German business conditions index will also be released and the Bank of Canada is expected to cut its key cash rate down to just 0.25% from 0.5% currently.
The March quarter profit reporting season will continue in the US.
The analyst consensus is for a 37% fall in profits for the year to the March quarter and the ratio of negative to positive profit warnings from US companies has been running at record levels so with the bar set so low there is still plenty of scope for the market to be surprised on the upside if results are not quite as bad as feared.
This week US investors will get a look at the performance of a swath of major companies, including everything from Wells Fargo (which has already said it will do much better than forecast) to Caterpillar, which could surprise because of its deep cost cuts and not an upturn in demand for its machinery.
These and other results will provide a good look at the US economy’s health and the impact of the recession on earnings.
Banks, which began reporting earnings last week with Goldman Sachs, JPMorgan and Citigroup, will continue to be in focus, with results from Bank of America, Wells Fargo and Bank of New York Mellon among the major ones.
In Europe, Credit Suisse reports. That will follow the poor and shocking downgrade from rival UBS this week at the AGM.
In all, 11 of the 30 companies in the Dow will report next week, including IBM, Caterpillar, Boeing Co and McDonald’s Corp.
Boeing is cutting staff and costs across the board. Last week it parked two 777 air freighters ordered but not taken by a Chinese airline.
These planes were put into the holding field in the desert on the US West Coast.
Wells Fargo announced its preliminary results earlier this month, saying it expects to post a record $US3 billion profit for the quarter.
For it and the other banks, the real question will be the quality of the profit and how it was arrived at. So far, Goldman, Citi and JPMorgan have produced mixed results on that basis with Morgan the best.
