Weekly Reports | Jun 21 2013
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.
By Greg Peel
Right now it’s a matter of simply waiting to see how far down the Fed exit/slowing China sell-off will take us on both Wall Street and Bridge Street. There is no joy in trying to pick bottoms. Lost in the wash of panic in Australia over stocks and currency are the earnings upgrades that will soon flow from lower Aussie forecasts being incorporated into stock valuations. The bargain hunters may be bold enough to try their luck soon locally but for now the best position is behind the couch.
We also need to get through the US quadruple witching expiry tonight which may yet cause volatility to feed on volatility.
There are quite a lot of US data due next week. The Fed will be watching all data closely but the debate is no longer one of will the Fed start tapering but of when. We’ll see releases for the Chicago Fed and Richmond Fed activity indices, new home sales, pending home sales, house prices, durable goods, personal income and spending and two consumer sentiment measures. On Wednesday the final revision of the US March quarter GDP will be released.
There’s not much on in Australia next week besides private sector credit but stock options will expire on Thursday which again might spark some volatility if things haven’t settled by then. It is also the last week of the financial year for those looking to book tax losses on dud performers. There are quite a few stocks going ex-div on Monday although most are smaller caps.
The German IFO business survey will be closely watched next, the UK will also make a final GDP revision and Japan will provide a data dump on Friday, with inflation numbers particularly in the frame.
It was famously said after the fall of Lehman that there are only two positions to hold in this market, short or foetal. Funny that the supposed signalling that the end of the GFC in the US is nigh, ie Fed tapering, has drawn the same response.
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