The atrocities in Paris and the G-20 meeting in Turkey, the third quarter Japanese GDP data (later today) and more weak financial and sales reports from big US retailers, will dominate markets already whacked by last week’s sell-off.
That will be on top of another bout of weakness in major commodity prices, especially oil on Friday night which will hit miners and energy companies locally today and then through Asia.
The G20 leaders’ summit in Turkey will no doubt generate lots of coverage, especially after the events in Paris, but really talkfests like this have little or no impact on markets.
The Brisbane G20 meeting a year ago had little impact on Australia or anywhere else – the 2% boost to growth over the next four years has gone – in fact global growth has slowed sharply since then.
The first estimate of Japanese third quarter GDP will be out later today and is expected to be negative for a second successive quarter, leading to a lot of talk about recession, when really all it will represent is more weak growth.
In Australia, the minutes of the last Reserve Bank board meeting are out tomorrow and won’t tell us much more than we have already learned from the post meeting statement from Governor Glenn Stevens, the final Statement on Monetary Policy for the year and that major speech in Melbourne by Governor Glenn Stevens.
Late today the October data on new vehicle sales will be issued by the Australian Bureau of Statistics. The data will confirm that new vehicle sales were at record highs in the year to October.
The big data release of the week is the Wage Price Index for the September quarter which is expected to show continuing weak real growth because of low inflation, not rising wages.
There are a few annual meetings and profits – Orica is one company reporting full year earnings this week. James Hardie is due to report its September quarter and first half figures as well. Appliance rental group Thorn is also due to report.
The most important annual meeting will be from the Commonwealth Bank tomorrow, while BlueScope Steel holds its AGM later in the week.
BHP shareholders meeting in Perth on Thursday – will the dividend be trimmed after the Brazil disaster and weakening commodity prices?
Besides the Japanese GDP report today, the Bank of Japan meets Thursday. The expected weak GDP report (which will be revised in a month’s time) will place the central bank under pressure to undertake further monetary easing.
Asian data this week will also include more detail on Chinese house prices for October. In the year to September house prices were down 0.9%, but prices were rising in a few major cities.
In the US, the minutes from the last Fed meeting are out Wednesday night (our time) will be watched closely regarding prospects for a December rate hike but they have been superseded by the strong October jobs report (with the market still seeing a 66% probability of a hike by year end) and quite a few Fed members talking up a possible rise.
Meanwhile, we can expect a weak US October consumer price inflation report on Tuesday night, our time, (around 0.1% year on year for headline and 1.8% year on year for core), a weak industrial production report (thanks to the weak oil and gas outlook), a fall in housing starts last month, but a rise in building permits (both Wednesday).
The Empire State manufacturing survey from the Fed is out tonight our time and the Philadelphia Federal Reserve survey is out on Thursday.
The third quarter earnings season is almost ended and this week major retailers Wal-Mart (tonight, our time) and Target (Wednesday) will dominate.
After the surprisingly weak reports from Macy’s and Nordstrom last week, investors are not all that confident about this week’s releases, especially when Wal-Mart has already warned of weak sales and earnings for the next two years.
Others to report include hardware and home improvement groups Home Depot and Lowe’s, Williams Sonoma, Fresh Market, Gap, Abercrombie & Fitch, L Brands and Best Buy.
