In Australia, the December half earnings reporting season climaxes this week.
In fact, it will be the biggest week in the December half reporting season with about 90 major companies due to report including Amcor, Mirvac, Woodside, Oil Search, AGL, Coca Cola, IAG, Origin, GPT and Woolworths (for a full list see the diary below).
The results are likely to continue to reflect the two speed Australian economy, with resources and related stocks doing very well on the back of the surge in commodity prices.
Companies from food, steel, transport, retailing and property will be reporting, along with a smattering of resource groups.
Non-bank industrials are likely to be much more constrained reflecting the soft housing and retail sectors and the impact of the strong Australian dollar.
The AMP’s chief strategist, Dr Shane Oliver says the reporting season hasn’t been "the big downer many had feared".
"Of course BHP Billiton shot the lights out with an 88% rise in profits but good results were also seen from Dominos Pizza, Lend Lease, Qantas and Wesfarmers over the last week.
"So far 49% of companies have come in above expectations compared to a norm over the last seven years of 46% and 73% of companies have reported a rise in profits on a year ago.
"Interestingly despite the gloom and doom amongst many investors the ratio of positive to negative outlook statements is running at around 4 to 1 compared to 2 to 1 last August.
"However, we are still only 46% of the way through the reporting season."
He said "two themes are apparent".
"First, there is a huge divergence between the very strong results seen from resources companies, solid gains from the banks and more mixed and constrained results from the rest of the market.
"Second, Australian companies are starting to return cash to shareholders via increased dividends or share buybacks.
"With corporate cash holdings at record levels and gearing low there is plenty of scope for further increases in dividends and more buybacks going forward, both of which are positive for the share market," Dr Oliver wrote on the weekend.
