A week of mixed influences ahead – there’s the short week in American markets because of Thanksgiving on Thursday, and some vital data, there’s the Opec meeting on Thursday, there’s also the usual end of month flow of figures from recessed Japan, and there’s also the start of our key third quarter figures in Australia, plus the Medibank float.
As well, there’s the impact of the shock cut in Chinese interest rates to work their way through markets in Asia, and perhaps trigger cuts in countries such as South Korea.
Globally we get GDP updates from the US, Germany, the UK, India, Brazil, Canada, South Africa and several eastern European countries.
In Australia, the focus will be on tomorrow’s listing of Medibank Private and the performance of the share price.
Big shareholders will pay $2.15, small shareholders $2 a share. So the listing price will be $2.15.
Beware of some crazy prices and heavy selling as investors try and catch profits that have become very rare for traders in the past month – with the Australian market now lower than at the start of the year.
But those losses should be erased in trading today, at least.
The September quarter’s construction data (on Wednesday) and business investment (out Thursday) are early guides to September quarter GDP growth, which is out midway through next week.
Continued growth in dwelling investment is expected, but business investment to have remained soft resulting in falls in both construction and the capex data.
The investment intentions part of Thursday’s report are the most important indicator for the economy this week and they are likely to show a further decline in mining investment ahead but perhaps more tentative evidence that non-mining investment is bottoming out.
Data for new home sales will also be released (Thursday) and credit data from the Reserve Bank (Friday).
The latter is expected to again show further growth in credit, but led by lending to housing investors, which is what continues to worry the RBA.
Next Saturday sees the Victorian state election.
Elsewhere, David Murray, chair of the Financial System Inquiry, speaks at a Sydney business lunch later today.
His inquiry is finished and the final report is very close to being given to the government.
Reserve Bank Deputy Governor, Phil Lowe is due to speak on the economy at a dinner in Sydney tomorrow night.
BHP Billiton has briefing on its coal and copper businesses in Melbourne later today.
Annual meetings will include Harvey Norman, Brickworks, Retail Food Group, Mesoblast, Beach Energy, Webjet, Cabcharge, Beach, Seek, Australian Dairy Farms and Bank of Queensland.
But the meeting holding the biggest interest will be Woolworths’ shareholder gathering where the board and management will be quizzed on the sharp fall in the retailer’s shares this month, and for much of 2014 in fact.
The main concern for shareholders is the continuing losses and investment in the hardware business, especially the Master’s chain of stores which are trying to take on Bunnings.
Results will come from companies such as Aristocrat Leisure (final, tomorrow), ALS (interim, later today),
In the US, Thanksgiving and then the start of the holiday selling season for retailers (known as Black Friday) dominate.
US markets are closed Thursday and only trade up to lunchtime Friday, so there’s likely low trading levels for most of the week.
But before then, there’s an international event that could have some bearing on market sentiment.
Tonight, our time is the deadline for Iran to reach an accord with the western powers over its nuclear programme, with talks continuing in Vienna between it, the US, UK and Germany, among others.
Tomorrow night sees the release of the second estimate of third quarter US economic growth.
The first reading came in at an annual 3.5%, but quite a few US economists are predicting that will fall to around 3.2% or 3.3% in tomorrow night’s report.
US financial results are dropping away – the most important are Hewlett Packard, Campbell Soup, Deere and Co, Tiffany’s and Hormel Foods.
Every market in the world will be watching next Thursday’s Opec meeting in Vienna for evidence of any official cuts in production which would be aimed at stabilising the weak global price of oil.
It will in fact make Thanksgiving especially fraught for US traders, especially in oil and other commodities – their turkey dinners may be cold and could be missed in the wash up of the meeting.
Friday’s short trading day could turn out to be much longer than they think if there’s a policy change from Opec.
Despite Friday’s bounce on the Chinese interest rate cut, global oil prices are still down 30% as weak demand (especially from China) and rising production (from the US) place downward pressure on prices.
Saudi Arabia, which has previously acted as a swing producer, has not cut production (as many weaker Opec members want) in an effort to retain market share and resist the impact of rising competition from US shale producers. But it has been trimming prices for key customers in Asian and European markets.
Besides the GDP report, other data out in the US this week include house prices (Tuesday night, our time); consumer confidence (also Tuesday); durable goods orders (Wednesday night, our time); new and pending home sales (also Wednesday).
In the Eurozone, economic confidence readings (on Thursday our time) and the November flash inflation reading (Friday night, our time) is the most important of the week and could show the Eurozone getting closer to deflation thanks to the recent falls in the oil price and weak levels of demand.
Data on employment is also due for release on Friday.
There’s the GDP data for Germany and the UK as well.
In Asia, the Japanese economic data for October dominates, starting with household spending, retail sales, industrial production, housing starts and the labour market, all on Friday.
The big question is whether this data will show that growth is returning in the current quarter and that the third quarter contraction was either a one off, or will be reversed.
But the big release in Japan is the inflation data (also Friday) which is expected to show a further weakening, taking it closer once again to deflation.
The Indian third quarter GDP figures on Friday will tell us is the economy is recovering under Prime Minister Modi, as other data suggests.
