A busy week in the US and here in Australia as the countdown to the end of the year approaches.
Here the 3rd quarter growth estimates and the minutes from the RBA's
last Board meeting are likely to leave different impressions.
GDP in the September quarter is likely to show growth
of just 0.2%-0.4% in the quarter (or 0.5%-0.7% over the year) with
positive contributions from inventories, public demand and housing
being offset by weakness in net exports, consumer spending and business
investment.
Some economists, including the AMP's Dr Shane Oliver, warn that a small fall in GDP cannot be ruled out.
"However, it would be dangerous to read too much into a soft September
quarter GDP outcome as the pick up in October and November in business
and consumer confidence, business investment plans, approvals to build
new houses and public spending plans all point to strong growth over
the year ahead," Dr Oliver said.
Groups like the NAB see growing of 1% or more this quarter a strong chance.
Reserve Bank Deputy Governor, Ric Battellino, is due to speak in Sydney
30 minutes after the release of he GDP figures on Wednesday, which is
interesting timing.
He will be able to comment immediately and directly on the growth outcome and drive commentary and debate.
Bank annual meetings will dominate the week.
The National Australia Bank holds its AGM in Brisbane.
We can expect a lot of talk about how the NAB is putting customers first (compared to Westpac, of course).
Westpac shareholders meet in Melbourne the day before the NAB.
That will be a stormy affair given all the self-generated adverse
publicity from the bank about its controversial rate rise and
subsequent defence.
And shareholders in the ANZ gather on Friday for their AGM in Melbourne.
(AWB is the only known AGM at this stage for the week leading up to Christmas. The meeting is on December 23.)
Shareholders in consumer products and mining services and explosives group, Orica, also meet this week.
In Japan the important Tankan survey of sentiment among major companies will be released by the Bank of Japan later today.
Unlike China and South Korea, where the economy and confidence is
rising, the Tankan could actually show a worsening in confidence in
coming months among Japan's biggest companies.
In the US the Fed is expected to leave interest rates
on hold near zero and reinforce the message that interest rates are
likely to remain low for an extended period.
While the Fed is change, the wording of its post meeting statement will
reflect a bit more confidence in the economic outlook, its concern
about ongoing headwinds to the recovery (described last week by
chairman, Ben Bernanke as " formidable") is likely to ensure that it
will leave interest rates on hold near zero and continue to signal that
interest rates can remain exceptionally low for an “extended period”.
It's the wording of the phrase including "extended period" will be watched closely by the market.
Rates to remain on hold at 0%-0.25%.
Besides the Fed's meeting, we will also get data for inflation,
industrial production, housing starts, a survey of home builders and a
couple of business surveys.
The Fed will have figures on November's industrial production, along
with the November Producer Price Index, housing starts and the November
Consumer Price Index before its meeting finishes up Wednesday
afternoon, our time.
US earnings reports will see some significant companies announcing quarterly figures.
They will include the huge electrical and consumer goods group Best
Buy, express delivery and logistics group FedEx Corp, Nike Inc and
Oracle, the big computer software and services group,.
Fed Ex last week upgraded its second quarter forecast as more companies
and consumers use its services. Best Buy and Oracle will give us up to
date reports from retailing and from the tech sector.
Management services group and consultants, Accenture also reports,
along with packaged food maker General Mills and drugstore chain Rite
Aid Corp. Smartphone makers Research In Motion Ltd and Palm also report.
Their products are in the hottest sector for any sort of tech product at the moment.
All in all a good cross section of companies to give us a slice of
current thinking on the health of much of the US economy, especially
consumer demand.
One non-financial report to watch for from the US is the expected flight of Boeing's new 787 airliner.
After more than two years of delays, Boeing says the Dreamliner might
fly for the first time as early as tomorrow night, our time.
The Dreamliner's first flight has been delayed numerous times by technical and manufacturing problems.
If it flies successfully, it will be a major milestone for Boeing and
customers, such as Qantas and Jetstar in Australia which have a number
on order.
President Barack Obama tonight meets top bankers to talk about the
economy, lending and financial regulation and later flies to
Copenhagen for the final stretch of the United Nations climate summit.
And markets will be watching the vote on Thursday night, our time in
the US Senate's Banking Committee on the confirmation of Federal
Reserve Chairman Ben Bernanke for a second four-year term.
It's expected to be a strong 'yes' vote, but markets will be watching
to see how many oppose his re-appointment and from which party.
That will send a message as to whether the Fed will have its
considerable clout neutered in new financial regulation bills moving
through the US Congress (the House of Representatives approved its
version on Friday).
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