Thankfully, we should have a much quieter week after the tumult and selling triggered by the results of last week’s meeting of the US Federal Reserve.
For most Australian businesses – private and public – a quiet week is what they need as they approach the end of the 2012-13 financial year.
Results will start flowing in around three to four weeks, with August to see the bulk of filings from reporting companies.
Judging by the downgrades we have seen so far, it’s going to be a weak reporting period.
This week will see the usual spate of stories about how stocks and other investments have gone.
Well, gold will be one of the top flops – with the US front month futures price on Comex down just over $US300 an ounce in the financial year that’s coming to an end.
Gold YTD – Gold’s shake out continuing as 2012-13 comes an end
On June 29, 2012, the Comex front month closed at $US1604 an ounce (it lost 4% in the month). Last Friday it ended at $US1298, a fall of 19%.
That’s a big blow to all the gold bugs, especially with the slide since April of this year which has helped undermine the idea that gold is a good hedge when volatility rises and things get a bit fraught. Last Thursday’s 6% plunge was another salutary lesson for gold enthusiasts.
The strength of the US dollar and rising US bond prices are undermining the metal at the moment and companies like Newcrest and others in the sector, are hostage to those influences.
This week here we have some lower ranked statistics – ABS job vacancies (Thursday) and the Reserve Bank’s private credit data for May which will be released on Friday. That will show all forms of lending are still growing slowly.
Metcash’s full-year earnings will be out later today for the year to April. That looks like being the major corporate report this week.
Rivals Coles and Woolworths have been doing well from their basic supermarkets businesses.
Metcash has gone deeper into hardware with Mitre 10 and acquired an auto products retailer after the balance date in May.
In Canberra, there will be a lot of publicity from the Committee for the Economic Development of Australia’s State of the Nation briefing today and tomorrow which will see Prime Minister Julia Gillard delivering the keynote breakfast address today, while shadow treasurer Joe Hockey will deliver the main dinner address this evening.
Tomorrow, Treasurer Swan will deliver the keynote breakfast address.
Over the two days we will hear from Productivity Commission chair Peter Harris, ACTU secretary Dave Oliver and the new local chairman of Shell, Andrew Smith.
Offshore, data from Japan and the US will dominate.
In the US, the main stat to be released is the third estimate of March quarter economic growth at the end of the week.
We can also expect to a rise in durable goods orders, further solid gains in house prices for April and in May new home sales, a slight fall in consumer confidence (all Tuesday) and another rise in pending home sales (Thursday). Data for personal income and spending will also be released Thursday.
The latter will give us a snapshot of the Fed’s favourite inflation measure, which is emerging as a source of contention at the central bank about when the current quantitative easing should be reduced.
In Japan, data due Friday are expected to show further improvement in household spending, industrial production, manufacturing conditions and the labour market along with a further weakening in deflation.
In the eurozone, watch for more pressures coming from Greece where the progress of the country’s bailout and restructuring is slow.
Also in view is the eurozone’s business confidence indicators to see whether they continue the improving trend evident in business conditions surveys for June.
If there is an improvement, it will be a small bit of good news for the recessed area.
