Weekly Reports | Jul 20 2012
For a more comprehensive preview of next week's events, please refer to "The Monday Report", published each Monday morning. For all economic data release dates, ex-div dates and times and other relevant information, please refer to the FNArena Calendar.
By Greg Peel
US earnings season will roll on next week with some more heavy-hitters. Week One provided largely “bad” results but Week Two saw a recovery into “less bad than expected”. This welcome distraction has provided for quiet but unconvincing strength in equity markets but overhanging sentiment is the persistent triumvirate of macroeconomic concerns.
Europe is in a lull, news-wise, which has provided a nice break from headline-driven mayhem but also an uneasy feeling we may just be in the eye of the latest storm. Nervousness continues to surround Chinese data and here the feeling is the readings will probably get worse before they get better, and they'll only get better when Beijing steps up the stimulus. In the US we'll be in for, no doubt, another tedious week of QE3 speculation, outside of the earnings results.
Those results next week will include the likes of America's biggest company – Apple – along with Boeing, Caterpillar, 3M, Amazon, Exxon and Chevron, just to name a few.
On the economic data front we'll be stewing over the latest flash estimate of the Chinese manufacturing PMI early in the week, closely followed by the new US equivalent measure and the eurozone composite PMI estimate. US data over the week will also include the Richmond Fed index, house prices, new home sales, pending home sales and durable goods. The highlight will come on Friday when the first estimate of June quarter GDP is released.
It's not a big data week in Australia but it's an important one, with the release of the June quarter inflation numbers. They are expected to confirm that the RBA has no excuses not to cut rates further, albeit at this stage the market is split on whether the next cut will come as soon as August.
Resource sector production reports will continue into next week in Australia with Newcrest ((NCM)) the highlight, and with the US quarterly earnings season in full swing we'll also see the first trickle of local six-monthly earnings reports to remind us that, come next month, all hell will break loose on the results front.
Another macro issue we must now start to deal with in earnest is the deteriorating situation in the Middle East. Civil war in Syria will not directly impact on oil prices but will do so indirectly when Iran speaks up, both with regard to its staunch ally and in separate regard to nuclear issues. And Israel is sitting in the middle, figuratively. Watch oil and gold.
