Next Week At A Glance

This story features ENERGY RESOURCES OF AUSTRALIA LIMITED, and other companies. For more info SHARE ANALYSIS: ERA

By Greg Peel

Assuming no disasters on Wall Street tonight, we should be entering next week with an air of easing concerns and growing risk appetite in global markets. While Europe will be awaiting the upcoming bank stress tests due on June 23, the US will be able to begin gauging whether or not stocks had become oversold and whether this is anything more than a relief rally when the second quarter earnings season kicks off on Monday.

Alcoa's result traditionally waves the flag for what is ultimately about a six week long result season, although a lot of the Dow majors come up in the first couple of weeks, as do the big banks. As important, or perhaps even more important, than the actual Q2 numbers will be companies' Q3 guidance. Good Q2 numbers will not in themselves instill superior confidence given the lag effect in many sectors of what has been a weak three months.

There is also a raft of economic data coming out next week in the US and elsewhere which has the potential to create a bit of movement. Most notably, the monthly round of Chinese data comes out on Thursday, including industrial production, retail sales and inflation data. But the biggie will be second quarter GDP.

Whether or not the Chinese could care less, the authorities will continue to generate scepticism given their GDP calculations are done and dusted, without further revision, a mere two weeks after the end of the quarter. The US, UK and Europe make their first GDP estimations one month after the end of the quarter, and provide subsequent revisions two and three months later. Australia simply comes up with one final figure after three months. Boy those guys are quick on the abacus.

It's a big week in the US for data. Over the course of the week we will learn the monthly trade balance and Treasury budget, business inventories, retail sales, industrial production, the New York and Philadelphia manufacturing indices, the PPI and CPI, and the first Michigan Uni consumer confidence survey for the month.

The Fed will also release the minutes of its last monetary policy meeting on Wednesday, while the Treasury will auction a total of US$69bn worth of three and ten-year Treasury notes and thirty-year bonds. With fear now subsiding, and the ten-year yield having last night drifted back above 3%, for once the stock market will be hoping demand for Treasuries is muted.

It's a little quieter in Australia with home loan data on Tuesday and vehicle sales on Friday, but in between we learn the results of the monthly NAB business conditions and confidence survey and Westpac consumer confidence survey.

On Monday night the UK will release the final revision of its first quarter GDP, supposedly. The result has been held up for a fortnight due to the sudden discovery of a statistical error in the calculation, so it could be a case of anything goes with the revised number.

On the local stock front, next week sees the beginning of the second quarter round of resource company production reports. Reports next week include those from Energy Resources of Australia ((ERA)) and Rio Tinto ((RIO)).

And Orica ((ORI)) spin-off DuluxGroup ((DLX)) will list on the ASX on Monday.

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.

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