The June quarter and financial year inflation data will dominate local business and economic news this week, while offshore there’s the continuing tensions over the downing of MH17 and the invasion of Gaza by Israeli armed forces.
Offshore it’s the June quarter earnings flood from companies in the US, Europe and Asia which will drive much of the underlying sentiment this week for equities.
The mid-month global reports of manufacturing activity are something else to watch out for, especially the ‘flash’ report on manufacturing (for Australia) issued on Thursday from HSBC/Markit for China.
Some analysts reckon it could show a small rise to 50.8, which would be in line with the tone of last week’s June quarter and month of June data on growth, production and investment and retail sales (although house prices and sales continue to fall).
It’s a busy week for senior Reserve Bank officials this week.
Tomorrow sees Governor Glenn Stevens delivering his annual lunchtime address to the Anika Foundation in Sydney. Also tomorrow, Guy Debelle, Reserve Bank Assistant Governor (Financial Markets), is on a discussion panel at the 2nd Latin America Australia Investors Forum in Sydney.
And on Wednesday, Reserve Bank Deputy Governor Philip Low is due to give introductory remarks at the financial conference in Sydney.
The corporate arena will again see a scattering of early June 30 reports and production figures for the June quarter and the year to June, with BHP Billiton leading the way on Wednesday.
Annual meetings this week will be dominated by Macquarie Group’s get-together in Sydney on Thursday.
Management is expected to issue first half earnings guidance for the 2014-15 year. Singapore Telecom (which owns Optus) holds its AGM in Singapore on Friday. Highflying Kiwi tech stock Xero holds an EGM on Wednesday.
The US report on Thursday, and the June quarter earnings figures will be watched closely for signs of the rebound in US manufacturing strengthening and the solidity of US stockmarket values.
As well, this week also sees US consumer price inflation figures issued (out Tuesday night our time and around 2% annual, according to most estimates). Figures on existing home sales (Tuesday night our time) will show a rise, but a fall in new home sales (Thursday night our time). Durable goods orders (Friday our time are also likely to be good).
June quarter earnings results will continue to flow with close to 100 S&P 500 companies down to report over the week.
Tech giants, big manufacturers and some major fast food and airline groups will be releasing earnings.
By the end of this week we should have a very good idea how the profitability of corporate America went in the three months to June and whether current share price levels are justified, especially for tech giants like Microsoft, Netflix, Texas Instruments, Facebook and Apple.
US companies reporting this week include Netflix, Texas Instruments, Hasbro, Boeing, Ford, General Motors, Microsoft, State Street Bank, Peabody Energy, American Airlines, Southwest Airlines, Coca Cola, Pepsi Co, Qualcomm, Comcast, Electronic Arts, Gannett, Ingersoll Rand, Lockheed Martin, Verizon, AT&T, Dow Chemical, Facebook, General Dynamics, Caterpillar, Omnicon, McDonalds, Visa, Teck Resources, Freeportmacmoran and Xerox.
Up to the close last Friday, Marketwatch reported that 74 companies in the S&P 500 had already posted their second-quarter earnings, and 72% had topped consensus forecasts.
Of interest as well is whether the manufacturing reports for the Eurozone will show a fall for June in line with falls in production and exports in some economies, such as Germany and France.
Analysts though expect the eurozone business conditions PMIs for July (Thursday night our time) to be consistent with ongoing gradual recovery. Consumer confidence figures will be issued for the eurozone later in the week.
The first estimate of June quarter economic growth will be issued in the UK.
European companies reporting include Credit Suisse, Luxottica (the glasses group), Daimler (Mercedes Benz), Swiss engineering group, ABB and Azko Nobel, the Dutch chemicals giant.
In Asia, China’s manufacturing survey dominates, while Japan’s manufacturing survey (also out on Thursday) will likely show a continued recovery after the fall associated with its sales tax hike on April 1.
Japanese inflation data could also be released Friday and it will be examined to see if the boost given by the April 1 tax hike is continuing, or whether it is fading. Headline inflation though is likely to be boosted by the rise in oil prices. Trade data for June are released in Japan on Thursday.
Among the Asian companies reporting this week are Canon and Hitachi of Japan, the steel giant Posco, LG and Hyundai Motor of South Korea.
