Weekly Reports | Mar 18 2011
By Greg Peel
It's not the first time I've written this brief report on an “anything can happen and just might” basis, but this is definitely a time that warrants. The solid buyback on the local bourse yesterday, Wall Street's follow-through and early local buying this morning all points to investors starting to ease their fears of nuclear meltdown. But is this confidence warranted? Well realistically there's absolutely no reason why it should be, unless you know more than I do.
The fact that there was no new news out of Japan last night was taken as good news, but we are still waiting for power to be reconnected to the stricken plant and as yet I have seen no specific timetable. Water-bombing a radioactive core seems to me like trying to extinguish a bushfire by spitting on it, but one presumes this effort buys some extra time. But I'm no nuclear scientist and let's face it, neither are you.
So one can only hope that by the time we reopen on Monday the news from Japan will be very positive and a rebound will begin in earnest. In the meantime, it is unlikely traders both here and in the US will want to take big positions home over the weekend.
Let us also not forget that Japan has been a distraction from what's happening in the Middle East, and developments regarding Saudi protests and a UN intervention in Libya are also pertinent news stories we may hear on the weekend.
Tonight in the US is “quadruple witching”, in which stock and stock index futures and options all expire at once. This can often lead to non-macro related argy-bargy, and given the market has fallen a long way in a short time such a risk is heightened.
Next week, all things being equal, the US will focus on the Chicago Fed national activity index, existing home sales, new home sales, the FHFA house price index, the Richmond manufacturing index and durable goods, all before Friday. Friday brings the final revision of US fourth quarter GDP, along with the latest consumer sentiment survey.
It's a very quiet week in Australia on the economic front, with the highlight being the Conference Board leading economic index on Thursday. New Zealand will release its fourth quarter GDP result on Thursday, but this is of course pre-quake (Christchurch quake, that is).
There remains a handful of stocks to go ex-div in Australia and a few AGMs are also planned for next week.
Otherwise, it's a weekend of watching the news.
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.
