A quiet week globally for regular data drops and other reports, but there’s a summit between North and South Korea, a meeting of the United Nations, the mid-month updates on the health of manufacturing and services, some July 31 corporate reports in Australia and a big shakeup in the structure of the S&P 500, the world’s major stock market index.
After the close of trade on Friday, September 21, the S&P 500 will see the biggest shake-up of a key classification system since its inception in 1999.
The telecoms sector will cease to exist, and a communication services sector will comprise the three existing S&P 500 telecom companies — AT&T, Verizon, and CenturyLink — along with consumer discretionary names like Comcast, 21st Century Fox, Netflix, and Walt Disney, and tech giants including Alphabet, Facebook, Twitter.
That will make it the most important part of the S&P 500 index and one that will attract more interest from investors than any other sector.
And thanks to the growth in exchange-traded funds and exchange-traded products, the changes are expected to have a considerable impact on the market.
The impact will be seen towards the end of the week as investors start rebalancing their holdings. Trading will start a week today on the new basis.
There a few bits of housing data will be released with the September home builders’ conditions index (tomorrow), August housing starts (on Wednesday) and existing home sales (Thursday) to rise.
Manufacturing conditions indexes for the New York and Philadelphia regions will also be released, along with the mid-month surveys of manufacturing and services.
In Australia, ABS data due Tuesday is likely to confirm the slide in home prices already reported in private surveys for the June quarter with a decline of around 1%, according to the AMP’s chief economist, Dr. Shane Oliver.
The minutes from the RBA’s last board meeting (out tomorrow) will confirm why the bank will not be moving interest rates any time soon.
The March quarter population data (out Thursday) is likely to show continuing strong population growth and get the usual bunch yapping about immigration, a big country, and all the usual stuff.
Corporate results this week will include full-year figures from TPG Telecom and New Hope tomorrow and Brickworks and Washington H. Soul Pattinson on Thursday.
Premier Investments is due to release its full-year figures on Friday.
New Zealand’s second-quarter GDP data will be out on Thursday.
In Europe, the Eurozone business conditions PMIs are out on Friday and will be solid.
In the UK the competing bidders for Sky (Comcast and 21st Century Fox) will have to come up with final and binding offers this week otherwise UK takeover officials will take control of the bidding process and run an envelope auction, where a series of bids will be allowed over a period of time (a couple of days) and the highest bid via an envelope will win.
The Bank of Japan is unlikely to make any changes to its ultra-easy monetary policy on Thursday and inflation data (Friday) is expected to show that core inflation remains weak. Japanese export data will be issue midweek as well.
South Korea president Moon Jae-in will meet with North Korean leader Kim Jong Un in Pyongyang tomorrow.
