For local investors, the end of the December half year profit reporting season and the start of data releases for next week’s 4th quarter GDP figures, will dominate the coming days.
More than 80 major companies are due to release interim or full year figures starting today, with results from BHP Billiton, Woolworths and Qantas grabbing the headlines, along with full year figures from QBE and Caltex and half year numbers from Wesfarmers.
BHP and Woolworths are likely to release reports full of write-downs and red ink – and BHP’s decision on its dividend will be the major news of the week.
So far the results have been better than expected.
As well the flow of economic data starts this week towards the 4th quarter national accounts is due out a week from Wednesday.
December quarter wages growth (on Wednesday) should remain low at 0.6% quarter on quarter or an annual rate of 2.3%.
Construction spending figures, also out on Wednesday, will remain weak because of the slide in mining – but possibly also due to a cooling in the home construction boom.
On Thursday, business investment data for the 4th quarter will again be weak, but the key part of the release to watch will be the capex intentions of business, especially non-mining investment.
Reserve Bank Assistant Governor (Financial Markets) Guy Debelle speaks in Sydney later this morning at a markets conference, while tomorrow Tony Richards, the head of the RBA’s Payment Policy Department, addresses a Payments Innovation Conference and will no doubt have something to say about the central bank’s latest move to force down electronic payment costs.
In Asia, the G20 Finance Ministers meeting in Shanghai on Friday and Saturday will be watched for signs of global policy coordination. Don’t expect too much at all. It is just another talkfest these days.
And Japanese Consumer inflation data (on Friday) is expected to show a slight weakening in core inflation and more signs of emerging deflation (helped by lower oil and gas prices and the stronger yen). Retail sales are expected to be again weak, while employment will remain very solid.
China sees figures for house prices for January released on Friday.
In the US, the latest Markit manufacturing conditions surveys, tonight our time, and the services report on Wednesday night, our time, will be watched to gauge the impact of recent financial volatility on business confidence.
Markets will also be watching the durable goods orders (Thursday night, our time) which are expected to show a slight bounce for January after the surprise softness reported for December.
Other data to be released include consumer confidence, existing home sales (all Tuesday night, our time) and new home sales (Wednesday night, our time) and consumer spending figures for January and associated data on prices and consumption on Friday night, our time.
The US reporting season continues to wind down this week with more big retailers reporting.
They include Home Depot, Target, Macy’s, Lowes (Woolies partner in the Masters disaster), TJX (possibly the best performing US retail group at the moment), Gap, Best Buy, L Brands and Kohl’s Corp.
Other big US groups reporting include the Warren Buffett associate, Kraft Heinz Co, Salesforce.com, Campbell Soup, Intuit, J Smucker, HP Inc
Also for release on Friday night is the second estimate of US December quarter GDP growth. The AMP’s chief economist Dr Shane Oliver says the estimate “is likely to be revised down to 0.5% from 0.7%”.
And in Europe, the attention will switch to the start of the campaign in the June 23 vote in the UK about staying in the EU. Prime Minister David Cameron set that date for the poll after wringing a new deal for Britain from the rest of the EU.
That campaign will now dominate events in the UK and the rest of Europe for the next four months.
Datawise, Eurozone business conditions surveys tonight (our time) and confidence readings (Thursday night, our time) will be watched closely to assess the impact of market turmoil. January inflation readings for the eurozone (Thursday night, our time) are expected to remain low.
