There’s a job lot of data and events this week to distract investors, but only the timid will care about them, especially when The Bull is striding the world’s bourses, driving momentum and turning the heads of investors large and small away from prudence and the growing list of warnings.
Many of these warnings are at a low level: growing pressure on consumer and corporate finances, weakening commodity demand (but not prices in many cases), wars in Ukraine and the Middle East, not to mention in Africa (Sudan), and China’s stuttering economy and outlook.
China dominates the week (outside the market) with the delayed five-day meeting of the country’s Plenum — the top 300 movers and shakers in the Communist Party who will set policy objectives for the coming couple of years.
You can bet there won’t be anything really serious about fixing the property crisis, but a lot of words will be used to say it is being tackled.
The Plenum meeting coincides with the latest Chinese GDP data and monthly economic figures being released today.
AMP’s chief economist, Shane Oliver, thinks June quarter GDP will slow to around 1%, or about 5% for the year, which is the government's forecast for the full year. That would be down from 5.3% in the March quarter.
Dr. Oliver says June activity data is likely to be subdued, with growth in industrial production slowing to 5% year-on-year and retail sales growth slowing to 3.4% year-on-year. Property investment data will also be released.
In Australia, there are key quarterly reports from the likes of BHP, Rio Tinto, and Evolution Mining, along with June jobs data on Thursday, likely showing a slowing in employment growth to 25,000, with unemployment rising to 4.1%, continuing the gradual upward trend.
The quarterly reports from Rio (June and the half-year) and BHP (June and the full 2023-24 financial year figures) will be dominated by iron ore and copper (and some coal for BHP).
Evolution will report on the June quarter and the 2023-24 full year for its gold, copper, and other minerals from mines in NSW, Queensland, and WA.
In the US, there are mostly lower-tier economic figures on housing starts, industrial production, and surveys of manufacturing for the East Coast.
But June retail sales data will provide a timely update on the health of consumer demand and spending. They are out Tuesday and forecast to rise weakly by 0.1%, unchanged from May.
The June quarter earnings reporting season ramps up with consensus expectations for a 7.4% year-on-year rise in earnings, likely ending up around 10% year-on-year again. Excluding tech, consensus expectations are for 2% year-on-year growth, according to AMP’s Dr. Shane Oliver.
After weak figures last Friday for JPMorgan, Citi, and Wells Fargo, US analysts say the banks will be the sector with the weakest earnings for the June quarter, while big Techs should perform the best.
Netflix’s figures on Thursday will be the first major tech stock to report. It had a total of 269.6 million subscribers at the end of the March quarter, up 9.3 million. By the end of June 2023, it had 238.9 million subscribers, with $US8.28 billion in revenue and $US1.8 billion in net income.
As of March 31 this year, Netflix reported revenue of $US9.4 billion and operating income of $US2.6 billion, both substantially higher than a year earlier.
Other companies reporting include America’s other three big banks — Goldman Sachs, Bank of America, and Morgan Stanley. Health products and drugs giant Johnson & Johnson also reports, along with Amex, Blackstone, BlackRock, Halliburton, Schlumberger, Volvo, JB Hunt, Textron, Alcoa, United Airlines, Domino’s Pizza, Novartis, and Abbott Labs.
The European Central Bank holds a policy meeting on Thursday but is forecast to leave rates alone after its expected cut. AMP’s Shane Oliver thinks a September cut is likely if inflation continues to ease toward 2%.
Japanese inflation data will be out on Friday and is expected to show a slight lift to 2.9% year-on-year and 1.8% year-on-year for core inflation, according to Dr. Oliver.
