Apart from the RBA decision and the slew of economic data (see separate story), the week ahead for the local market will be dominated by the step up of Australian June 30 reporting companies releasing the annual results.
But there’s also the usual monthly economic data from China that impacts sentiment in our markets. That’s out late in the week and looks like being the major offshore influence.
The financial results will mostly be for the full financial year, but there will be the odd corporate reporting half year data for the six months to June 30.
And there will be some major reports from the likes of the Commonwealth Bank, Leightons (half), Worley Parsons, AMP (half) and Wesfarmers, Rio Tinto (half), Telstra, Tabcorp, Argo Investments, Cochlear and Downer EDI.
One report of interest will be out Wednesday when 21st Century Fox, one of two businesses spun out of News Corporation just over a month ago, releases its first financial report as a new company.
So far we haven’t see a date for a report from (new) News Corporation, the owner of print in the US, Australia and the UK (newspapers and book publishing) and Australian Pay TV and real estate assets.
The AMP’s Shane Oliver said on the weekend, "Consensus estimates for 2012-13 earnings growth have slipped to a fall of 0.5% from +12% earlier this year, so a lot of bad news is already factored in.
"Resources profits may show signs of bottoming, but domestically exposed cyclicals are vulnerable to further weakness.
"On the positive side though, ongoing cost control and the fall in the $A are likely to be supports for the profit outlook going forward, with the fall in the $A to date potentially boosting profits by around 4.5," Dr Oliver wrote.
In the US, it will be a quieter week compared with last week. The flow of data is less important, although there’s a major speech midweek by Federal reserve chairman, Ben Bernanke.
The ISM non-manufacturing index tonight, our time, is expected to show a modest rise for the huge US services sector to go with last week’s stronger than expected rise in manufacturing activity.
The trade deficit tomorrow night is expected to narrow slightly and could influence the second quarter economic growth data, currently estimated at 1.7% (annual).
The speech by Bernanke on Wednesday night (our time) will be watched for more clues regarding the start of tapering, although it’s doubtful he will say anything new.
And consumer credit data for June will be released late in the week by the Fed.
The US second quarter reporting season starts to slow this week.
Some 55 S&P 500 companies are set to report quarterly results this week, including Walt Disney, Dish Network, Time Warner, CVS Caremark and First Solar, 21st Century Fox, perhaps News Corp, and McDonald’s Corp will report July restaurant sales on Thursday night.
Also on Thursday Dean Foods Co, America’s biggest dairy company, releases its quarterly results.
And there’s also the report from 21st Century Fox, which controls the Fox TV network, Fox Cable, Fox News and Fox film studios, as well as pay TV businesses in Europe, Asia and Europe as well as 39% of BSkyB in the UK.
Reuters reported that of the 391 companies in the S&P 500 that have reported earnings for the second quarter, 67.8% have topped analyst expectations, in line with the average beat over the past four quarters. About 55% have reported revenue above estimates, more than in the past four quarters but below the historical average.
In Asia we will see the July export and import data on Thursday that is likely to show continuing softness.
Data covering industrial production, investment and retail sales on Friday are likely to have remained relatively subdued by Chinese standards.
Inflation in July is expected to rise slightly to 2.8%.
Watch for import figures for iron ore, coal, oil, soybeans and copper to give us an idea on how the Chinese economy is travelling, along with bank loans and electricity production.
On Thursday, the Bank of Japan meets, but is unlikely to announce any changes to its current very expansionist monetary policy.
In Europe, the monthly survey of the services sector will be released for the eurozone and should continue the flow of slowly improving good news from the region.
We also get early second quarter GDP forecasts from Italy (and perhaps Spain), as well as industrial production from Germany and the UK, and the flow of corporate earnings reports.
