The Week Ahead: An Australian Focus?

This story features NATIONAL AUSTRALIA BANK LIMITED, and other companies. For more info SHARE ANALYSIS: NAB

By Andrew Nelson

We’ve had rescue packages, fiscal stimulus packages, various other packages and markets have bounced like a helium filled basketball for weeks. But it’s beginning to look like the bouncing is finally starting to slow, with more focus likely to build on releases from companies as AGM season gets underway and the last of the banks put out full year figures.

On plans and packages, US President Bush held a meeting at Camp David with French President Nicholas Sarkozy and European Commission President Jose Manual Barroso to discuss the global financial crisis. However, the White House said the meeting was not expected to produce any new policy decisions or to set the date or place for another G8 meeting.

Once upon a time, the central banks of major economies used to worry themselves with fighting inflation. At present the focus has shifted to boosting economic growth and preventing recessions and possible depressions. But with no BIG announcements from any of the major central banks or federal governments on the cards, the US earnings season and Australian AGM season may get the chance to sit in the front seat for awhile.

That said, we should see the NZ central bank deliver a pretty big cut, with economists at CommSec expecting a minimum of 75bp, given they expect NZ inflation to spike to 5.1%, its highest point since 1990.

With not much in the way of expectation, US investors will simply be looking for companies to meet or beat a reduced guidance, while Aussies will be trying to gauge how the first few month of the year will fit into the twelve month picture. The Australian reporting season will also officially come to a close, with National Australia Bank ((NAB)) releasing its brought forward full year results around 8.30am on Tuesday, while ANZ Group ((ANZ)) announces its annual profit figures around 8.30am Thursday.

There will also be some significant quarterly reporting over the course of the week, with Woolworths ((WOW)) putting out latest quarterly sales results around midday on Tuesday and giving us a tangible insight into the state of consumer spending. Miners will also be showing us some crucial data, with quarterly production reports helping to set some expectations post the commodity bubble burst.

While the sharp fall in the AUD will certainly provide a boost for exporters, especially commodity producers, production numbers from the likes of BHP Billiton ((BHP)), Mount Gibson ((MGX)), Macarthur Coal  ((MCC)) and Newcrest Mining ((NCM)) will show us how well coal and iron ore producers have fared given they deliver set tonnages at fixed US dollar prices. The hedging policies of gold producers will also garner some scrutiny.

The week starts off with Friday night economic data from New York and Europe to digest before the day starts. Data out includes European trade figures, US housing starts, building permits and a consumer confidence read from the University of Michigan.  Later in the morning we’ve got preliminary imports for September on Australian Q3 PPI.

Final stage producer price inflation continued to increase through 2007 and early 2008, although last quarter’s read started to show a softening bias due to a fall in import prices. Economists expect producer prices to have accelerated moderately in Q3 driven in particular by higher import prices, with a previously firm Aussie dollar and stable fuel prices keeping a lid on overall price growth.

On the corporate calendar, there’s quarterly numbers from Mount Gibson ((MGX)) and Murchison Metals ((MMX)), Wotif’s ((WTF)) AGM and a couple of stocks going ex div.

Tuesday begins with the US leading index and European PPI, closely followed by NZ CPI and credit card spending and a raft of data out of China including GDP and CPI numbers.

But the day’s big news will be the release of the RBA minutes from its last meeting as well as a speech from RBA Governor Glenn Stevens. There will also be vehicle sales data. There should be a significant amount of  interest in the board minutes, with economists, analysts and investors alike looking for justification behind the aggressive one percentage point rate cut and trying to identify the road ahead.

On the corporate side, NAB puts out its brought-forward full year results, Woolworths puts out its Q1 sales numbers and there will also be a couple of AGMs, chief amongst them being Cochlear ((COH)) and Stockland ((SGP)), while Oil Search ((OSH)) releases quarterly production numbers.

Wednesday gives us Australian CPI numbers and an underlying inflation read and NZ visitor arrivals. There are AGMs for Asciano ((AIO)) and Macquarie Infrastructure ((MIG)), Q3 cashflows from AMP ((AMP)) and AXA Asia-Pacific ((AXA)) and September quarter numbers from BHP Billiton and Macarthur Coal.

ANZ expects the annual headline CPI rate to have increased to 4.8%, its highest rate since 1995, although general price pressures are expected to have eased. Much of the high headline number should be due to rising housing and transportation costs, but there are a raft of influences at work, like higher rents and the increasing prices of water, gas and electricity. Offsetting those factors and hopefully supporting support income growth are the recent tax cuts, interest rate cuts, Mr Rudd’s fiscal stimulus package and a slower accumulation of debt, adds Westpac.

Thursday starts us off with minutes from the latest BoE meeting and US mortgage applications. Locally, there is the rate decision from the RBNZ, Japan trade figures and Australian housing affordability data.

On Friday the calendar contains US jobless claims and house prices, UK retail sales and European industrial orders and the current account. The company calendar stays busy, with a minor production report and nine AGMs including Boral ((BLD)), Clough ((CLO)), Macquarie Infrastructure ((MIG)) and PaperlinX ((PPX)) to name a few.

We will keep the calendar on the FNArena website as up to date as possible.

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