Next Week At A Glance

This story features AURUMIN LIMITED, and other companies. For more info SHARE ANALYSIS: AUN

By Greg Peel

Next week sees the US quarterly reporting season rolling on, with only around 150 of the S&P 500 stocks having reported thus far. In Australia, next week sees the beginning of the local reporting season.

The majority of Australian listed companies will be reporting their full-year earnings over the next five weeks, with the concentration in the latter weeks of August. For some companies, results will be for the half-year on calendar year accounting.

For the market, reporting season is the point at which analyst forecasts and market stock pricing is confirmed or otherwise, and FY11 forecasts are also substantiated or not. At this stage, the general concern is that while FY10 results might be close enough to the mark, FY11 forecasts may prove too ambitious in a world which is seeing a slowing of the economic recovery. But if that is the case, just how much adjustment is already built into current prices?

There's no point in guessing further, as the first trickle of results next week will begin to give us some answers. GUD Holdings ((GUD)) will wave the flag on Monday, and reporting highlights of the week include Coal & Allied ((CNA)), Alesco ((ALS)), Austar ((AUN)) and ERA ((ERA)).

While earnings season is starting, remaining quarterly production reports will still be flowing from the resource sector. Next week's reports include Centennial Coal ((CEY)), Macarthur Coal ((MCC)), Oil Search ((OSH)), Lihir Gold ((LGL)) and Minara Resources ((MRE)).

While economic data releases are light on in Australia next week, they are very important in regards to monetary policy. We learn the second quarter producer price index on Monday, the all-important consumer price index on Wednesday, and June private sector credit on Friday.

The headline CPI is tipped to exceed 3%, which will probably send the popular media into a frenzy of interest rate rise speculation, and campaigning politicians into a barrage of idiocy. Not that they need any impetus. But the only number that matters will be the trimmed mean of the CPI, which smooths seasonal fluctuations and omits volatile items like food and energy. The RBA is expecting this number to have fallen. Only if it has risen, and risen by a decent amount, will there be any remote chance of a rate rise on the following Tuesday. 

There is a weight of economic releases in the US next week, which will collectively provide an ongoing picture of the US recovery or lack thereof. Data include new home sales and the Case-Shiller house price index, economic activity indices from the Fed districts of Chicago, Dallas and Richmond, durable goods orders, consumer credit, and the Fed Beige Book.

Friday will be a big day in the US, and probably one in which all the economic data will come together. Aside from second quarter personal consumption and expenditure and the second Michigan Uni consumer confidence measure for July, the first estimate of second quarter GDP will be released. The first estimate usually ends up being wildly different to its two subsequent revisions, one and two months later, but that won't stop Wall Street jumping on the news.

For those across the dutch, the RBNZ will make a rate decision on Wednesday. 

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.

Click to view our Glossary of Financial Terms