Jobs in Australia, corporate earnings in the US and interest rates in Britain and oil prices across the globe: it’s another week in 2008 for investors to confront.
In Australia the June jobs figures will be preceded by the ANZ job ads series out today.
That’s been trending lower and May saw the ABS employment numbers confirm that more than 19,000 were shed, mostly in NSW and Western Australia.
The WA gas crisis may have boosted the jobs lost in that state last month, while jobs have gone in Sydney as well from several small retailers and companies.
We will also have housing finance figures which won’t be anything to write home about after last week’s 6.5% drop in building approvals for the same month of May.
The National Australia Bank’s business confidence and conditions survey is out tomorrow, and the West/Melbourne Institute consumer confidence report for July is also out.
For corporate matters, the Origin takeover will see developments with BG Group of Britain revealing its bidder’s statement and possibly Origin revealing details of its call for indications of interest in co-developing its coal seam gas reserves in Queensland.
And Insurance Australia Group shareholders will find out what new CEO, Michael Wilkins plans to do to revive the business when he reveals details of his new strategy on Wednesday. Media reports say 500 jobs could go.
In the US, it will be a relatively quite week on the data front with data for pending home sales, the trade balance and consumer sentiment due for release.
Our assessment is that while there may well be a bit of a bounce, the labour market has now turned in the direction of softening along with most other economic indicators.
In the US Alcoa and General Electric are due to reveal second quarter earnings this week and could either send markets lower, or rattle confidence even further.
GE hit sentiment in early April when it reported poor first quarter earnings and downgraded its 2008 estimates: the shares slumped and the company started selling off what it called poor performing assets, like its whitegoods business.
Alcoa’s earnings were not impressive either and energy costs and prices have moved against it in the past quarter.
It will also detail the impact of the WA gas crisis on its alumina business where it declared Force Majeure last month.
Alcoa is the first Dow component to report results and will release its quarterly numbers on Tuesday.
GE reports on Friday. Aside from the second-quarter results, investors are anxious to see the companies’ forecasts for world economic growth and their own corporate sales prospects.
Oil is now the wild card for growth and corporate profits. It jumped to a record above $US145 a barrel on Thursday. The price is up 50% so far this year.
Federal Reserve Chairman Ben Bernanke is expected to speak twice this week: first at a mortgage lending forum on Tuesday, while on Thursday he will testify on financial market regulation before the House Financial Services Committee.
General Electric’s results will be examined closely for several reasons. It’s America’s second largest company, so it’s a sort of economic indicator, especially in the financial and export markets.
It’s most troubled area is its financial business, GE Money. Here in Australia it’s thinking of selling Wizard Home Loans. It has sold businesses in Europe and in Asia.
Reuters Estimates sees GE reporting profit of $US5.33 billion in the second quarter, compared with year-earlier earnings of $US5.4 billion.
Economically the preliminary results of the Reuters/University of Michigan Consumer Sentiment Survey: a further 28 year low is predicted. June sales figures from major retailers like Wal-Mart and target are due out midweek and should continue to show the boost from the $US120 billion tax rebate.
After last week’s European Central Bank rate rise, the Bank of England meets this week to consider interest rates but is expected to leave them unchanged.
The UK is waiting for the recession to be declared, so gloomy is sentiment in housing, banking, retailing, manufacturing and services.
MONDAY:
ANZ Bank’s job ads series for newspapers and the internet; the Australian Industry Group/Housing Industry Association’s performance of construction index survey for June.
TUESDAY:
National Australia Bank business survey for June.
WEDNESDAY:
IAG strategy statement and briefing; ABS housing finance figures for May; Westpac/Melbourne Institute Index of Consumer sentiment for July; IFSA national savings report.
THURSDAY:
ABS jobs figures and unemployment rate for June; Westpac/Melbourne Institute survey of inflationary expectations; CSR AGM; United Group CEO, Richard Leupen speaks to a Sydney business lunch.
FRIDAY:
Nil at this stage
