Australia’s December interim reporting season will dominate this week, with a host of major companies revealing their results.
Over 50 major companies are due to report.
They include Leightons, the Commonwealth Bank, AMP, Qantas, Wesfarmers, OZ Minerals, Fortescue Metals, Bendigo and Adelaide Bank, Paladin Energy, ASX and QR National.
Analysts see the Commonwealth reporting a 6% gain in cash earnings to just over $3.5 billion.
Westpac and the ANZ also issue trading updates after the NAB released its figures last week.
Interim reports will also come from the JB Hi-Fi, Singapore Telecommunications (Optus), GWA, Hills, SAI Global, Kagara, Noni B, The Reject Shop, Primary Healthcare, Carsales, Ardent, ASX, Brambles, Goodman Group, Billabong International, Charter Hall, Spotless Group, Treasury Wine Estates and Salmat.
Full year results are also expected from Westfield, Westfield Retail Trust, AMP, Santos, Adelaide Brighton, Alumina and Oceana Gold.
The most important results from the market’s point of view will be the CBA, Westfield, JB Hi Fi and Billabong.
Billabong has already downgraded earnings sharply before Christmas and JB Hi Fi cut its guidance in December as well.
Westpac’s first quarter trading update is due out this Thursday and ANZ’s is out on Friday.
Meetings include GrainCorp Ltd, Murchison Metals Ltd, Toro Energy Ltd, TechnologyOne Ltd, Lion Energy Ltd, RMG Ltd and RCL Group Ltd.
The AMP’s chief economist, Dr Shane Oliver says that overall "results are likely to be weak with soft domestic demand, cost pressures, falling commodity prices and the strong Australian dollar all weighing".
He says retailing, manufacturing and housing related sectors are all likely to be particularly hard hit and while underlying profits in the resources sector will remain strong, growth will be sluggish thanks to high base effects and lower commodity prices.
"Profit growth in the December half is likely to be near zero.
"The downside risks are seen to be high, but everyone is expecting that suggesting there is scope for a positive surprise or for the market to look beyond current soft results," he said.
The labour force data on Thursday will dominate economic discussions, with most economists tipping another rise in jobs for January.
Housing finance and car sales figures will also be released by the Australian Bureau of Statistics.
Tuesday we get business confidence and conditions indices from the National Australia Bank (Tuesday) and consumer sentiment (Wednesday) from Westpac. Both are expected to have remained soft.
Interest rates will be the subject of continuing interest after the increases in home mortgage rates announced on Friday by the ANZ and Westpac, and their trading updates at the end of the week, and the CBA’s profit.
We also have the first speeches for the year from Reserve Bank officials with Assistant Governor Guy Debelle on Tuesday talking to a finance industry conference and incoming Deputy Governor Phil Lowe speaking on the economy on Thursday.
Both speeches and their comments afterwards will be watched closely for any clues on the outlook for interest rates.
In Asia Japan is the focus this week with the Bank of Japan meeting tomorrow and the 4th quarter economic growth figures out later today.
They are expected to show that the economy shrank 0.3% in the fourth quarter of last year, because of the impact of the stronger yen and flooding from Thailand that disrupted supply chains.
That would represent a turnaround from the third quarter, when the economy rebounded strongly, helped by reconstruction efforts following last March’s disasters.
And China’s industrial production figures for January should be released today.
In the US Fed data and the minutes from the last meeting are out on Thursday, along with new look forecasts from the Open Markets Committee members.
They will dominate discussion late in the week because of newness of the forecasts and the fact that they can be related to the Fed staff forecasts.
As well, January retail sales (due Tuesday) and industrial production (Wednesday) should show further gains in activity as will the usual surveys of manufacturers, home builders and small businesses.
New house starts and permits (Thursday) are expected to rise and inflation data (Friday) to be reasonably benign.
This week 51 S&P 500 companies are expected to report earnings.
The earnings growth rate for the S&P 500 for the fourth quarter of 2011 is now at 8.9%, according to Thomson Reuters.
But analysts say that if you exclude the great Apple 4th quarter result, then the overall growth rate is only 5.8%.
Companies expected to report this week in the US include General Motors, MetLife, Nvidia Corp. Applied Materials Inc., Deere & Co. and Goodyear.
Reuters wrote at the weekend that so far in this earnings season, 352 companies in the S&P 500 have reported results, of which 63% have beaten Wall Street estimates.
"This compares to a beat rate of about 70 per cent on average for the past four quarters and would be the lowest since the fourth quarter of 2008," according to Reuters.
In Europe, eurozone GDP (out Wednesday night, our time) is likely to show flat to slightly negative growth in the December quarter.
Watch for big falls in growth in Greece and Portugal, and small contractions in Spain and Italy. Germany should again see solid growth.
The Greek parliamentary vote on the austerity package overnight yesterday will be watched closely.
