Weekly Reports | Apr 05 2012
By Greg Peel
Are we now at the beginnings of a stock market correction? Last month the Dow Jones threatened a pullback after failing to conquer 13,000 and we did see one 200 point fall in a session, but it turned out to be a furphy and Wall Street pressed on to a sterling first quarter close. Now, however, after a reemergence of fears over China's slowdown, more sovereign nervousness in Europe, and the supposed canning of QE3, it appears another pullback may be on the cards.
For Australia, the level of 4300 in the ASX200 remains the bridge too far at present, and recent trade has seen an extreme lack of volatility. Sessions opening to the upside have later faded to the flatline and sessions opening to the downside have managed to claw back to the flatline on many days. The weak sectors remain weak and the strong sectors are fighting headwinds, while suddenly the Aussie is offering some respite.
The bottom line is that with a lack of retail interest in the markets, volumes remain low and movements remain at the whim of flighty traders. After the Easter weekend perhaps the next catalyst either way will be Friday's Chinese GDP release and monthly data dump.
All western markets are closed tomorrow, although the US jobs numbers for March will still be released tomorrow night. All western markets of note are closed on Monday with the exception of the US.
US data releases next week include wholesale trade, the trade balance, the PPI and CPI and the Fed Beige Book.
In Australia it's the week for bank economists to strut their stuff, with the ANZ job ads series, NAB business confidence and Westpac consumer confidence surveys all due. We'll also see housing finance and investment lending, and unemployment on the Thursday.
China's monthly trade balance is due on Tuesday, but while one might assume we can contrast that result with Australia's deficit reported yesterday the Chinese are a lot quicker on the abacus than the ABS computers. China's result is for March while ours was for February. However a drop in imports could spook the world. Beijing will also release inflation data on Friday with industrial production and retail sales, and the high speed abacus will also spit out the March quarter GDP result. More reason for global finger crossing.
On the local stock front, Ten Network ((TEN)) will post its interim next week and the first of the March quarter production reports from the resources sector will trickle in. Get ready for more wet results.
FNArena's website will remain open but there will be no service tomorrow or on Monday. Market action in interim will be summarised on Tuesday. Have a happy Easter.
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.
