So, is America’s economy on the improve: find out this week.
Does the US earnings-led market bounce have more strength this week as more companies report? We may learn more by Friday
And what about Australia’s June 30 earnings reports which start in earnest this week: will they be better or worse than forecast? Could be.
Taking them in order: US second quarter economic growth figures are due for release on July 29 and gross domestic product is expected to have shrunk by around 1.5% (annual rate) in the three months to June.
That would be a lot better than the March quarter, when it contracted 5.5% and 6% in the December quarter.
The AMP’s chief economist, Dr Shane Oliver says the upswing in a range of indicators suggests that the economy has probably returned to modest positive growth in the current quarter.
He says this should be backed by data for house prices, consumer confidence, durable goods orders and employment costs which will also be released this week in the US.
But the Conference Board’s consumer confidence index will probably show a fall for the second month in a row, which will match the falls recorded for July in other sentiment surveys.
The US Federal Reserve’s Beige Book of anecdotal evidence on the economy will be released and is likely to paint a slightly more optimistic picture of the economy in some parts of the US.
An interesting event will be a rare ‘town hall meeting’ involving Fed chairman, Ben Bernanke.
He appears on America’s Public Broadcasting System in a town hall-style forum called "Bernanke on the Record" hosted by PBS’s chief anchor, Jim Lehrer.
The program, which was recorded overnight Sunday at the Federal Reserve Bank of Kansas City, will be broadcast on "The NewsHour with Jim Lehrer" on PBS on Monday, Tuesday and Wednesday; a one-hour special will be aired on or after Wednesday.
Dr Bernanke made his half yearly appearances on Capitol Hill last week and was cautiously optimistic.
Another major event will be a record fund raising from the US Treasury this week: $US115 billion. Bond markets will be watching demand levels (the so-called covered ratio of bids to the amount on offer).
A high bid cover is bullish for bonds and usually takes pressure off market interest rates.
Commentary on housing and commercial property will be looked for by some analysts who are increasingly concerned that the sectors face more strains as the economy recovers.
The US June quarter reporting season is in full swing (see markets story) with over 140 S&P 500 companies due to report this week.
The better than expected figures for some companies have taken the headlines and helped boost share prices globally.
But some investors are starting to see holes in the earnings rebound story and worry that they will widen this week.
With 184 of the S&P 500 companies having reported earnings by late Friday, Thomson Reuters said that a total of 77% — or 142 companies — had topped earnings forecasts.
This week 146 companies in the S&P 500 are expected to report earnings, including 12 of the 30 Dow companies.
In addition to earnings due on Thursday from Exxon Mobil and Disney, other major companies set to report results include oil refiner Valero Energy on Tuesday, ConocoPhillips on Wednesday and Chevron on Friday. Chevron has already warned of a poor result for the quarter.
In Europe, oil majors BP and Shell also report. And Deutsche Bank is expected to report as well, along with two other giant German companies, Siemens AG and Daimler AG.
Bloomberg said Friday that more than half of earnings at European companies that have reported results since July 8 beat analyst forecasts.
"Profits have shrunk 28% in the period for companies on the Stoxx 600, while 37 of 69 companies have reported better-than-estimated results," Bloomberg reported.
In Japan some key data for June, including industrial production, will also be released and the Reserve Bank of New Zealand is expected to leave interest rates steady at its monthly meeting.
In Australia, a speech by RBA Governor Glenn Stevens will be watched closely for further clues on the outlook for monetary policy although it’s unlikely that he will signal any deviation from the message that interest rates are on hold for now with a mild easing bias.
Data for new home sales, building approvals and private sector credit will also be released.
Dr Oliver expects credit data to remain weak, but building approvals to rebound after their sharp fall in May.
The Australian profit reporting season sees results from a handful of companies including Australand (a loss), GUD, Austar and Alumina. Australian Foundation Investment Co reports today, Axa Asia Pacific is due Thursday and ERA on Friday with its interim figures.
Annual meetings include Macquarie Group and Campbell Brothers.
Dr Oliver says the market consensus is for a 22.7% fall in earnings per share over the 2008-09 financial year.
"We are a little less pessimistic and expect a 20% fall. Either way it will likely be the worst year for profits since 1990-91 when EPS fell 26%.
"The weakest results are likely to be recorded in the resources sector (down 35% on the back of the commodity price slump during the second half of last year), general industrials (down 40%) and other materials (down 30%).
"On the flipside the defensive health care sector is likely to report a 20% gain in profits and modest profit gains are likely fo
