The one thing we can be certain of next week is there will be a next week. Anything else is anyone’s guess.
The scorecard to date has the RBA cutting once, with more expected, and the Australian government putting fiscal stimulus in to play.
The Bank of England has double-cut and the UK government has swung firmly into action with its fiscal stimulus plans. The Fed has double-cut, and more is expected, as well as providing unlimited liquidity to short term credit markets.
As I write, it appears Congress has as yet been unable to agree on a fiscal response.
Last night ECB president Christine Lagarde announced a package of support for European businesses, banks and households that fell short of expectation. There was no “shock & awe” response, and nor did Lagarde take a leaf out of her predecessor’s book and pledge “whatever it takes”. Any fiscal response in the eurozone is down to 27 different governments.
Two things that all in the market agree on: This, too, shall pass, we just don’t know when; and among individual stocks there are babies being thrown out with the bathwater.
As I write, broker research is still coming in but currently there are 31 individual stock updates in The Daily Broker Call Report today and 12 of those include ratings upgrades, 8 to Buy. There is only one downgrade today.
This might tell us something, but it would still be to ignore human emotion. And these days, human emotion begets computer emotion.
The catch-cry in markets in 2008 was “Don’t try to catch a falling knife”. That catch-cry resonates today.
China will release February numbers for industrial production, retail sales and fixed asset investment next week on the Horror channel.
The US will also see industrial production and retail sales numbers, as well as housing sentiment and starts and existing home sales along with the Empire State and Philly Fed indices. The Fed meets next week and another -50 point is expected, at least.
The Bank of Japan meets next week.
New Zealand reports December quarter GDP, on the History channel.
The minutes of the March RBA meeting are out on Tuesday. March 3 seems an eternity ago (and -1450 index points). February jobs numbers are due on Thursday.
The S&P/ASX indices quarterly rebalance is set to be announced on Friday. I would not be surprised if it’s not.
Thursday brings the expiry of ASX March quarter derivatives. It’s not the sort of additional volatility we need right now, but I would wager that the bulk of index option positions are now so far away from the money it will not be much of a deal.
Synlait Milk ((SM1)) and Premier Investments ((PMV)) report earnings next week.
Sydney Airport ((SYD)) is scheduled to provide a trading update.
The ex-dividend season continues, not that anyone would notice.
