Business reporting grabs the diary spotlight this week – earnings in the US for the three months to March and major miners and their production and exploration activities in Australia for the same quarter.
Business conditions surveys will be released on Friday for a number of major economies, including Australia which will be after the latest Chinese economic and growth data.
In Australia there’s the minutes of the April meeting of the Reserve Bank tomorrow as well as the March quarter’s production and exploration reports from some big resource companies – BHP, Rio Tinto, Woodside, Evolution and smaller groups.
Analysts say watch for the strength of oil and gas company revenue growth as well as the impact of inflationary cost pressures across the board.
Investors will also be looking for upbeat commentary from gold miners with the price of the metal at near record US and Australian dollar levels
Apart from the corporate reports, the rest of the week is mostly quiet – no significant statistics until next week’s inflation reports for the March quarter and the month of March.
The Bank of Queensland interim report on Thursday has assumed greater importance with investors now demanding clear explanations for the shock $260 million in write downs and provisions – the latter a $60 million hit to handle the cost of upgrading its risk monitoring systems.
Neither were properly explained in Friday’s surprise news release from the bank and Chairman Patrick Allaway’s early termination of an analyst briefing did not engender much optimism.
Tomorrow’s minutes from the last RBA monetary policy meeting earlier this month will be given the usual examination but Governor Phil Lowe’s appearance at the National Press Club the day after the board meeting has probably left little new to be found in the release.
The US March quarter reporting season saw a significant start on Friday with better-than-expected results from three major banks – JPMorgan, Wells Fargo and Citi and there will be two more majors reporting tonight – Bank of America and Goldman Sachs, with a sixth, Morgan Stanley due Tuesday.
Ten S&P 500 companies released results last week, 60 are due to do so this week.
Netflix’s report will be one of the more important of the season – it has forecast a fall in new subscriptions compared to the 4th quarter of 2022 (when they totalled 230.7 million around the globe) but they are predicted to be up on the March, 2022 quarter when they dipped 200,000.
The company has started rolling out paid sharing subscriptions (to counter password sharing without revenue) and this is expected to skew subscriptions as through 2023 and 2024.
Netflix has made top line revenue growth a key metric to be watched and the forecast this quarter is 4% or 8% on a constant currency basis.
Tesla’s results this week will be the other important report outside of the banks. There have been lots of forecasts but analysts point to the re-opening of China and the freeing up of the company’s biggest and most efficient car plant in Shanghai to boost revenues and returns.
Offsetting that will be the unknown impact of repeated price cuts in the March quarter, especially in the US where five have been reported.
Apart from those reports, companies such as AT&T, Boeing, Procter and Gamble, Johnson & Johnson, Moody’s CSX, Blackstone, IBM, Schlumberger, Freeport McMor Ran and Lockheed are down to release quarterlies this week.
Data reports in the US are expected to show continuing weakness in manufacturing conditions in the New York and Philadelphia regions (Monday and Thursday), a further improvement in the home builders’ conditions index (Monday) but a fall in housing starts (Tuesday).
New data on jobless claims will also remain important to watch as a clear upward trend has formed in recent weeks. That’s still well short of the break-even level—which is currently estimated to be around 270,000.
“Claims are clearly on the rise and the ongoing spate of layoff announcements lends upside risk in the coming weeks,” Moody’s said in its weekly note on Friday.
Other key US data to be released this week include the Fed’s Beige Book and the Conference Board’s leading economic index.
In Asia, tomorrow sees the release of China’s March quarter GDP. AMP Chief Economist, Shane Oliver says the data is likely to show a sharp reopening driven boost with GDP rising 2.1% from the December quarter or an annual 3.8% up from the flat quarter on quarter and 2.9% annual rate in the December quarter.
Moody’s economists are a bit more pessimistic and see annual GDP growth at 2.6%. They said that will be after quarter-on-quarter growth of 1.6%.
As well, the monthly and quarterly figures for production, retail sales and investment are all due for release tomorrow and Dr Oliver says a further acceleration “is likely” to be reported.
Japanese consumer inflation data is out Friday and is forecast to come in at an annual rate of 3.1 – 3.2% for the core reading.
In Europe a final reading for March inflation at 6.9%, down from 8.5% in February while annual inflation in the UK may have dipped to 9.9% in March from 10.4% in February.
