Globally, another week ahead to be dominated by the strengthening stockmarkets – which are ignoring the rising number of COVID-19 cases globally and especially in the US and Europe.
Globally, there are the early business conditions surveys for November will likely show a further recovery in some economies (such as Japan and Australia), a slowing in the pace of expansion in the US, and mixed results from Europe.
This week also sees the G20 summit convene in Riyadh, with expectations rising that progress will be made on a new framework for dealing with the recent rise in indebtedness of the world’s poorest countries.
It will be a meaningless meeting given the change in administrations in the US and the antics of Donald Trump and Europe’s growing second wave of COVID infections.
In Australia COVID concerns have largely eased, but the strength of the market and the health of the economy remain front and centre.
In Australia, the minutes from the last RBA Board meeting tomorrow Tuesday and a speech tonight (online) by RBA Governor Lowe will dominate thinking about the economy.
They are however unlikely to add much after the further easing seen this month.
The AMP’s chief economist, Dr. Shane Oliver says they are likely to reiterate that the RBA expects the economic recovery to continue but that it will be bumpy and uneven and that it stands read to do more if needed.
“Recent positive news regarding a vaccine may suggest upside risks to the RBA’s growth forecasts if a vaccine can be rolled out earlier than expected,” Dr. Oliver said.
On the data front there’s September quarter wages growth data on Wednesday (Dr. Oliver forecasts wage rises of just 0.1% quarter on quarter or 1.4% year on year which will be the lowest annual growth rate on record).
There’s the October labour force data for October on Thursday that will show a 30,000 decline in employment and unemployment rising to 7.3% as people continue to return to the workforce and preliminary October retail sales data on Friday is forecast to show a 1% rise (after the small fall in September) helped by some reopening in Victoria.
As well, the first early payroll jobs data for the period to October 17 will also be released tomorrow.
Corporate annual meetings continue this week as well. Earnings releases include Elders (today) and Australian Agriculture (tomorrow), Aristocrat Leisure on Wednesday and Orica on Friday.
In the US, the election outcome and President Trump’s increasing desperation to reverse it will continue to figure highly this week, as will COVID-19 infections, rising deaths, and spreading lockdowns.
On the data front, there are the November readings for the New York and Philadelphia regional manufacturing conditions indexes (due tonight and Thursday), solid growth in October retail sales and industrial production, and continued strength in home builders’ conditions (all tomorrow), further gains in housing starts (Wednesday) and still high home sales (Thursday).
There are some significant corporate results – all from retailers led by Walmart tomorrow, Target on Wednesday, Macy’s on Thursday, Home Depot and Lowe’s Cos, L Brands, Williams Sonoma, Kohl’s, as well as Foot Locker and Ross Stores.
By Friday we should have a good idea about the health of US consumer spending at the coal face – Walmart, Target, Macy’s, Home Depot, and Lowe’s all have growing online businesses.
In Asia, Chinese activity data for October is due later today and is likely to show continuing solid growth in industrial production and a further acceleration in retail sales and urban investment
Japanese September quarter GDP is also out today. Dr. Oliver says it is forecast to have rebounded by 4.4% in the September quarter after the shutdown driven slump of -7.9% in the June quarter. Inflation data for October is also out late in the week.
In Europe, there are updates to inflation for the UK and the Eurozone, while consumer sentiment surveys will be released across the euro area as well.
