In Australia this week we move into the lead up to next week’s first quarter growth figures.
As part of that we will see the extent of the slowdown in the mining and resources boom with figures from the ABS on Construction Work Done for the March quarter and new private capital spending figures (capex), also for the March quarter.
Both will feed into the first quarter growth figures that will be issued the following week.
The AMP’s Dr Shane Oliver says the March quarter capex is likely to fall and business investment plans are likely to be wound back reflecting the slump in profits, the tougher financing environment, lower confidence levels and falling capacity ultilisation.
Data for new home sales, skilled vacancies and private credit will also be released.
The private credit figures for April are likely to show another solid month of lending for housing, and not much else, especially business.
In the corporate area, Campbell Brothers releases full year profit figures tomorrow.
They are likely to be down on guidance because of the global mining slump and recession.
RuralCo also releases its interim figures today, as does Fisher and Paykel Healthcare.
Programmed Maintenance releases its annual figures on Thursday.
Troubled property trust, GPT is due to holds it annual meeting today, Perth-based engineering group, GRD tomorrow, Corporate Express and Ivanhoe Australia on Wednesday; shareholders in pay TV group, Austar meet on Thursday as do those from Iluka Resources,
Senate Estimates hearing start in Canberra on Monday and continue all week.
In Europe, a quiet week with a key business confidence survey to be released in Germany, which is expected to continue to recent flow of more upbeat sentiment in similar surveys.
The consumer confidence survey for May for Germany will be released as well, giving us a valuable look at sentiment in the poorly performing German economy.
And the European Union is also due publish its index of executive and consumer sentiment in the 16 nations that use the euro on May 28.
In America we will get the latest Case Schiller house price index figures, the Conference Board’s consumer confidence survey for May, figures on existing home sales and durable goods orders for April.
The home sales figures cover new and existing homes for April. Analysts are looking for a small rise.
But the most watched figure will be the second reading on first quarter economic growth: it was a reading of 6.1% initially and the forecast is for an improvement to a fall of 5.5%. It’s out Friday.
In Japan we will get more key economic data for industrial production, consumer spending, unemployment and inflation, all for April.
After last week’s poor first quarter GDP numbers (showing a quarter on quarter fall of 4% and an annual rate of 15.2%), there’s likely to be signs of an easing in industrial output, but prices are still falling and jobless numbers are still rising.
In the US the trials of the car industry will continue to dominate thinking, as will the rise in bond yields and concerns about American debt levels.
The sales agreement between Chrysler and Fiat has to be signed by next Wednesday night, US time, May 27, but that will be overshadowed by the almost certain move into bankruptcy by General Motors.
The American media at the weekend was full of reports of this impending move.
That will pressure all markets: if it happens it will be the biggest industrial collapse yet in the US, will hit industrial output, jobless numbers, credit markets and derivatives markets.
Investors are worried about the potential bankruptcy of General Motors because of the timing.
While it’s been sort of half expected, the probable collapse will come at a time when the market bounce is tiring and running out of steam.
Sentiment took a knock when major US stock indexes fell on Thursday and Friday due to worries about the U.S. budget deficit.
GM is facing a June 1 deadline to work out its issues with creditors if it wants to avoid a bankruptcy filing.
On Friday, a spokesman for some of GM’s creditors said the biggest bondholders of roughly $US27 billion in debt plan to reject GM’s current offer for a 10% equity stake. They made it clear they will take their chances in court. That was a point hammered home in other stories on Bloomberg and in US papers and magazines.
Seeing the judge in the Chrysler case rejected such a move, the bondholders could be whistling Dixie.
The S&P 500 has risen 31% since the 12-year closing low on March 9. The market peaked on may 8 and has weakened since then, making the rally so far two months long.
With UK and US closed tonight sentiment will be passive until the data flow resumes tomorrow night.
The first quarter earnings season is about to finish.
Reuters said that as of Friday, 484 companies in the S&P 500 had reported, leaving just a handful of retailers, including Tiffany & Co and Costco Wholesale Corp to release results this week.
Of the 484 companies, 65% have beaten analysts’ estimates, 9% matched and 26% missed, according to Thomson Reuters.
