News on coronavirus will continue to dominate the coming week around the world as markets attempt to assess whether it is being contained or not and the size of the impact on global growth.
Some US and Australian December quarter and half year reports could contain some early leads on the impact (as well as the impact from the bushfires).
There’s some early economic data from China such as bank lending and car sales for January which could also contain some leads as to the impact of the virus crisis on top of the normal reduction in activity caused by the Lunar New Year holiday.
In the US CPI inflation on Wednesday is forecast to have remained steady at 2.3% in January while January retail sales growth on Friday is also forecast to have remained steady at 0.3%.
Data on small business optimism, job openings, and industrial production will also be released.
US Fed chair Jay Powell will also give his first semi-annual testimony to US Congress for the year.
The US Presidential primaries continue with New Hampshire Democrat poll set down for February 11.
US December quarter earnings results will continue to flow and the coronavirus impact will be watched closely, especially from reporters such as Deere and Co, Yum Brands, the Hilton and Hyatt hotel chains and MGM resorts (gambling). Yum Brands China controls China’s biggest takeaway food chain, KFC. It has already warned of a possible loss for the March quarter.
Chinese data for January is expected to show CPI inflation (Monday) rising to around 5% but core inflation remaining weak around 1.5%, producer prices to again be weak as well and growth in money supply and credit remaining strong.
Car sales data for January will also be weak because of the Lunar New Year holiday and possibly the start or the coronavirus crisis.
In Australia, we can expect a further rise in housing finance commitments for December (tomorrow) but the NAB business survey for January (also Tuesday) is likely to show a further deterioration in conditions and confidence reflecting the bushfires and start of the coronavirus fears.
RBA Governor Lowe will participate in a panel discussion on Thursday but it’s hard to see how he could say much that is new after all the RBA commentary of the past week.
The Australian December half earnings reporting season accelerates this week with 46 major companies due to report including Bendigo and Adelaide Bank, JB HiFi, GPT, (final), Suncorp, Transurban, CSL and Comm Bank, Telstra, IAG, AMP, and Woodside.
The AMP’s Dr. Shane Oliver says earnings growth is expected to be running around 2-3% led by tech, telco, gaming, health care, and consumer staple stocks, with resources earnings up around 3.5% but banks lagging with just 1% earnings growth.
Elsewhere GDP numbers for Japan, the UK and Germany are out this week and should show both European economies avoided sliding into contraction, but that Japan slipped into decline.
Japan’s fourth-quarter GDP may well show the economy sliding into a downturn as weakened demand resulting from October’s sales tax hike was exacerbated by typhoon disruptions.
Malaysia will also publish its fourth-quarter GDP performance.
