Profits start dominating business news this week.
At least 19 major companies due to report including JB Hi-Fi, Cochlear, BHP Billiton, CBA, Stockland, Rio Tinto (full year), Telstra and Newcrest.
JB Hi-Fi, which is a sort of bellwether for retailing, is due to release its interim figures today.
As well reports are expected from Alumina (full year), Bradken, Australand (full year), Boral, Computershare, Paladin and Leighton.
If we don’t have a good idea of how company profits are travelling at the end of this week, then we will never have.
Banks, resources, retailing and technology are all represented this week.
The AMP’s Dr Shane Oliver says the reporting season is likely to represent a transition from the 20% profit slump of 2008-09 to a 20% profit rebound over the year ahead.
"As such just as many companies are likely to report falls as gains in profits.
"While net profit is likely to be up around 10%, the large amount of equity issuance during the second half of last year will likely result in a much weaker outcome for earnings per share growth."
Those equity issues helped save corporate Australia and the economy from a flood of collapses and a tidal wave of red ink.
In many cases it resulted in rotten results in the back half of the 2009 year, with an improvement to emerge slowly from the current reporting period onwards, although the banks and financial stocks will probably be the earnings leaders by the end of the March 31 reporting season in May.
Dr Oliver says his group sees the strongest sectors are likely to be the banks, media, resources and industrials.
"Key to watch will be sales, margins and management outlook comments.
"Overall we expect the profit reporting season to add to confidence that we are on track for decent profit growth over the year ahead."
In the economy we get labour market data for January.
Economists are looking for a slight rise in unemployment to 5.6% after a rise in jobless numbers.
Although the markets were completely surprised by the strong rise in November jobs and the sharp fall in the unemployment rate.
However, this is likely to be nothing more than statistical noise with the trend in the labour market likely to remain one of improvement.
Housing finance data for December is likely to bounce higher after weakness in November.
Building approvals for December, released last week, showed a 3% rise in December after falling in November.
Federal parliament returns this week in Canberra.
For Australia, the monthly flow of economic data from China will be watched closely.
Figures for inflation, trade, investment, property prices, final car sales and bank lending will be released.
Chinese inflation is likely to slow slightly after the food-inspired boost in December but lending looks likely to have remained strong in January.
(We already know that, after the country’s central bank ordered a host of banks to curtail lending activity in the final 10 days of last month and also lifted the reserve asset ratio.)
Cold weather could push inflation up and cause a dip in industrial production for the month.
In the US, more earnings reports, data for trade, retail sales and consumer sentiment will be released.
The retail sales for January will be watched very closely.
A small rise is expected after December’s increase.
The first reading from the Reuters/University of Michigan survey of US consumer sentiment is also expected to see a small rise.
The steady stream of fourth-quarter earnings will continue.
The focus this week shifts more to the consumer durable sector with releases to include figures from Walt Disney Co, Viacom, Sprint Nextel, Coca-Cola Co, CVS Caremark Corp, PepsiCo, Marriott International, Hasbro, and Electronic Arts.
Federal Reserve Chairman Ben Bernanke is due to testify before the US House Financial Services Committee on Wednesday.
