US and Chinese Consumer Price and Producer Price inflation the focus again this week, along with profit reports and annual meetings in Australia, GDP reports, central banks and Covid Delta cases worrying parts of Europe, China and the US.
The coming week sees some important updates on inflation from the US and China, as well as some fresh UK GDP figures, along with third quarter GDP data updates from the Philippines, Hong Kong SAR and Norway, loan data from China and industrial production numbers from the eurozone.
In Australia it’s a quiet week with the October jobs report due Thursday, a day after a weekly jobs and payroll update.
So far as local results are concerned, the NAB’s full year and James Hardie half year (and second quarter) are out tomorrow and Orica on the 11th with its full year results. Xero produces its half year figures the same day, AusNet also reports what will probably be its last set of figures before its Canadian suitor Brookfield consummates its takeover offer and GrainCorp reports its full year figures on Thursday as well.
A number of companies hold annual meetings in what will be a packed week. Meetings will include those from BHP, Computershare, Bendigo Bank, Nine Entertainment, Ansell, Breville Group, Beach, News Corp and Fox in the US, Amcor, Coles Group, Newcrest, Charter Hall Group, Vicinity Centres, Lendlease and Fortescue Metals Group.
The focus will be on the US inflation numbers for October. CPI (Thursday) and the Producer Price data (Wednesday) consumer inflation expectations will help gauge the extent to which price pressures are mounting in America and whether the announced taper pace of $US10 billion will need to be adjusted in coming months.
CPI is expected to be the hottest post-pandemic print yet. Headline CPI inflation is expected to rise by 0.6% or 5.9% year-over-year. That would be the fastest pace since December 1990.
Core inflation, excluding energy and food, is expected to rise at an annual rate of 4.3% year-over-year (Australia’s core rate was 2.1% in the year to September, so we do not have a problem, despite all the alarmist nonsense peddled in media and business commentary).
“The acceleration in shelter (housing) costs is stunning so if you get that, along with energy price increases, we could see a 5.7% (headline figure),” according to Diane Swonk, chief economist at Grant Thornton.
US central bank speakers will also be a highlight in the coming week with Fed Chair Jerome Powell appearing at two events. Today, he is at a Fed conference on gender and the economy and tomorrow he addresses at a virtual conference on diversity and inclusion in economics, finance and central banking.
There are other Fed officials speaking as well, including Fed Vice Chairman Richard Clarida, New York Fed President John Williams and San Francisco Fed President Mary Daly.
And this week President Biden could announce who will be the new Fed chair with markets uncertain if Powell will get another term.
With about 440 S&P 500 companies having reported their September quarter financial results, the season slows this week.
The performance so far has been stronger than expected. S&P 500 earnings are expected to have climbed 41.5% in the third quarter from a year earlier (early forecasts were in the range 30% to 36%), according to Refinitiv.
Disney is the most important US company to report this week.
Watch for the final price for the IPO of electric truck maker, Rivian which is backed by Amazon and Ford Motor Co. If Rivian prices its float on Tuesday, it would begin trading Wednesday.
Analysts think the value could be as high as $US65 billion up from a suggested $US45 billion last week
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China’s October trade data yesterday was solid with a record trade surplus for the month and a strong export performance (see separate story).
And still with China, the country’s property crisis is returning with a small developer in trouble and mystery surrounding the second biggest, China Evergrande and whether it made an interest payment on Saturday.
A small property company moved closer to collapse on Friday, news that brought the problem back into the spotlight.
October’s CPI and PPI are out on Wednesday – the former will have risen probably by around an annual 1% in October from 0.7% in September because of the impact of Covid and higher prices for diesel and petrol and vegetables.
But economists forecast the PPI will top an annual rate of 11% after the record 10.7% in the year to September, mainly due to higher oil and gas and coal prices. Reuters quoted economists forecasting a figure as high as 11.7%.
China’s car sales figures for October are due out Friday and after the 19.6% annual fall in September, another weak result is forecast thanks to Covid lockdowns in some regions.
Thursday sees Singles Day in China. That’s the online shopping event created by the e-commerce giant Alibaba.
