The run up to our third quarter GDP data announcement starts this week with updates on construction and private investment expected to confirm the growing downturn in resource investment – and perhaps a glimmer of hope about the strength of the housing upturn.
The GDP figures for the September quarter are out a week on Wednesday, but this week’s releases will tell us a good deal about how the investment side of the economy – the most crucial driver of growth for the past three years – travelled in the September quarter.
Releases offshore won’t have the same impact here as they did last week, especially the minutes from the US Fed’s last meeting.
But watch for the release of the usual surveys of Chinese manufacturing late in the week.
And, there’s a senior Reserve Bank official due to speak this week and the value of the dollar (which fell 2% last week) will no doubt get mentioned in questions.
In Australia, the construction and investment data releases from the Australian Bureau of Statistics will take attention away from offshore developments and the market, which saw a solid rebound on Friday here and offshore.
Construction work done data will be released on Wednesday and is expected to show a fall because of the drop off in mining investment.
But the figures to watch will be for the performance of construction – especially dwellings (private and non-private). They might a little better than expected.
While some economists reckon there will be a 4% lift in business investment in the September quarter, the real story will be in investment intentions for the year ahead, which are expected to show another big fall, as they did in the June quarter.
RBA Deputy Governor Phil Lowe speaks in Sydney tomorrow at a conference discussing productivity measurement, drivers and trends.
That will fit into the current narrative from the bank about how we have to find other sources of growth now the mining boom is fading. The RBA also releases lending data for October on Friday.
In the corporate area, investors in Forge Group will be watching to see if the company managed to make a deadline of this week for an announcement of a refinancing deal after running into trouble with two gas turbine power station contracts. The shares were suspended earlier this month at $4.18.
There are now suggestions the company is struggling to get an issue away at the deeply discounted price of 50c a share, which if true would mean the company is close to collapse.
Earnings reports will be sparse and the most notable one expected is from ALS, the former Campbell Brothers, which is one of the world’s major testing companies and a good barometer for the health of the mining sector.
ALS is due to release its 2013-14 interim later today. A fall in earnings is forecast for the half year and the full 12 months.
Also reporting (on Wednesday) will be Programmed Maintenance. It may also be hit by the downturn in spending in resources.
Annual meetings will continue, although at a slowing pace.
Woolworths, Aristocrat Leisure, the Bank of Queensland and Harvey Norman are the most important companies due to call shareholders together.
Others include Oakajee Corporation and Yellow Brick Road Holdings, Brickworks, Ridley Corp, Primary Healthcare, Challenger Financial Services Group, Kingsgate, IOOF Holdings, St Barbara, Pharmaxis, APN Property Group, Nucoal Resources and Chinalco Yunnan Copper Resources, Jindalee Resources, Poseidon Nickel, Beach Energy and Linc Energy.
In the US, pending home sales are out tonight, housing starts data tomorrow as well as the accurate Case/Schiller monthly report on US house prices. Durable goods orders and consumer sentiment are both out Wednesday.
Dominating the US this week though will be Thanksgiving on Thursday, when markets will be closed, while they will only be open half a day on Friday, when volumes will be light across the board.
Around 90 million people will head for the shops in the US from Thursday night to next Sunday, many several times.
Next Monday is so-called Cyber Monday when online sales start.
It represents the start of the traditional US holiday retailing season, with the legendary ‘Black Friday’ actually starting on Thanksgiving evening for many chains such as Wal Mart, Target and Macys.
In Europe, Eurozone economic confidence data on Thursday, unemployment on Friday, as well as November inflation are the main releases.
There’s a lot of interest in whether consumer inflation will remain steady at around the 0.7% rate in October, which helped trigger the 0.25% cut in official interest rates by the European Central Bank.
The second estimate of UK GDP data for the three months to September will also be released.
In Asia, Japanese household spending, labour market data and industrial production are all out on Friday and will be watched for further evidence that aggressively relaxed monetary and fiscal policies (called Abenomics) is working, with CPI data likely to provide further evidence that the country is shaking off its long bout of deflation. But inflation will be very low.
Indian 3rd quarter GDP will also be released later in the week.
And the two monthly surveys of the health of Chinese manufacturing are due out late in the week.
The government survey’s results are usually released on the 1st of the month – Friday in this case.
The main HSBC/Markit final report for November is due out Saturday, our time.
The ‘flash’ report for this survey last week showed a small easing in the pace of expansion, but nothing to really worry markets.
