Australian inflation and, the NAB’s full year figures will be the dominating issues for local investors this week, while offshore it will be the peak of the US third quarter earnings season, plus reports from other regions, such as China and Europe, GDP reports for the US and the UK and end of month data in Japan.
In Australia, the focus will be on September quarter inflation data (Wednesday) which will be the main driver of whether the RBA cuts rates again at its November meeting.
Thanks to higher prices for fruit and vegetables, utility charges and rates and an increase in tobacco excise only partly offset by lower petrol prices headline inflation is expected to be up 0.6% quarter on quarter taking annual inflation to 1.3% (from 1%), according to the AMP’s Chief Economist, Dr Shane Oliver.
The underlying measures of inflation (the average of the trimmed mean and weighted median) are expected to be around 0.5% quarter on quarter or 1.6% year on year. While low, that will not bring another rate cut from the RBA.
Dr Oliver said in a weekend note “We have been allowing for another RBA rate cut in November but given recent solid economic data, evidence that the terms of trade and hence national income has bottomed and signs that the new RBA Governor would prefer not to cut rates again underlying inflation would probably need to be 0.3% quarter on quarter or less to clearly bring on another rate cut in November.”
Also out this week will be the September quarter’s export and import prices (on Thursday) will likely provide further evidence that the terms of trade has bottomed and producer price inflation and new home sales data are due to be released Friday.
Resmed reports its third quarter figures this week, but the major corporate news will be Thursday’s release by the NAB of its 2015-16 results. The ANZ follows Wednesday week and Westpac’s figures are out on November 7.
Besides the full year result from the NAB, Macquarie releases its half year figures on Friday – a net profit of a touch over $1 billion is forecast. That has already been forecast, what investors want to see if the forecast for the second half.
It is also another big week for annual meeting, including Tabcorp and Bendigo and Adelaide Bank on Tuesday, Tatts, JB Hi-Fi and Blackmores on Thursday, and Carsales.com on Friday.
That should see last week’s $10 billion merger announcement between Tabcorp and Tatts discussed by shareholders in both companies.
As well meetings will be held by GUD Holdings, Mirvac, Greencross, WorleyParsons, Super Retail, Northern Star, Stockland, Newcrest Mining, Star Entertainment and GWA. Shareholders in Star will be able to ask the board if their company has been hit by similar action to that of Crown Resorts in china.
And there are also first quarter sales updates from, Wesfarmers (Coles, Bunnings, Officeworks etc) on Wednesday and Woolworths on Friday.
And investors will be watching events in China so far as Crown Resorts is concerned.
In the US, the main focus is likely to be on September quarter earnings reports with 170 or more S&P 500 companies due to report this week.
Apple, Amazon and Alphabet will dominate – along with the expected weak figures from Twitter.
Other companies reporting in the US and elsewhere include: 3M, Boeing, Ford, Bayer, BASF, Posco, Texas Instruments, Colgate Palmolive, Novartis, AT&T, Coca Cola, Tesla, Visa, Caterpillar, General Motors, Under Armour, Du Pont, Dow Chemical, Chevron, Eni, Baoshan Iron and Steel, Haier, Deutsche Bank, UBS, Hyundai Motor, Lockheed, and ExxonMobil are among those reporting results as well.
As well there will be the fallout from the massive $US85 billion agreed takeover of Time Warner by Tt&T to create the world’s biggest media and telco group.
On top of that there’s the $US47 billion mop up of Reynolds by its major shareholder, BAT of the UK.
Watch for these deals, especially the Time Warner bid to become an issue in the closing weeks of the US election campaign.
US September quarter GDP growth (Friday night, our time) which is expected to show a modest improvement in economic growth to 2.5% annualised after three quarters around 1% (according to the AMP’s Dr Shane Oliver) and September quarter employment costs (also Friday).
In other US this week includes the Markit manufacturing conditions PMI (tonight), consumer confidence, (tomorrow night), new home sales (Wednesday night), pending home sales (Thursday night) and durable goods orders (also Thursday).
Japanese data for September will be released on Friday and the AMP’s Dr Oliver says it is expected to show continued labour market strength, but weak household spending, ongoing CPI deflation and a further fall in core inflation to around 0.1% year on year. Japan also releases trade data later today.
The first forecast for UK 3rd quarter GDP will be issued Thursday night, our time, and economists will look closely for any early sign the Brexit vote and its fallout has had on the wider UK economy. Quarter on quarter growth of 0.3% is forecast.
