Investor Signposts 21 Jan 19: Chinese economic growth and jobs data in focus
CommSec Chief Economist Craig James previews the economic data scheduled for the week ahead including the monthly employment report, Chinese GDP and the IMF global growth forecasts.
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Australia: Jobs data in focus
• In the coming week the monthly job figures (released Thursday) dominate the statistical schedule.
• The week kicks off on Monday when Commonwealth Bank releases its measure on economy-wide sales for December.
• In addition on Monday the Australian Bureau of Statistics (ABS) issues the final edition of Lending Finance. The report covers not just home loans, but also personal, business and lease loan commitments. The new report to be released in February will combine the detailed Housing Finance publication with Lending Finance.
• On Tuesday, ANZ and Roy Morgan release the weekly consumer confidence data. Consumers remain remarkably upbeat, no doubt reflecting the strength of job markets as well as lower petrol prices.
• On Wednesday, the Department of Jobs and Small Business will release the Skilled Vacancies data for December – a key leading index on the job market. Vacancies have flattened out at a healthy level.
• On Thursday, the ABS releases the December jobs report. The job market is in great shape. In November, 37,100 jobs were created with the jobless rate at 5.1 per cent. In addition a record proportion of Australians are in the workforce with the trend participation rate at record highs.
• In December, we expect that jobs lifted by 20,000 with the jobless rate at 5.0 per cent.
• Also on Thursday, CBA releases the “flash” survey results purchasing managers in manufacturing and services.
Overseas: Chinese economic growth data in focus
• Chinese economic growth and activity data are amongst the highlights in the coming week.
• In the US, the economic release schedule is subject to change – a victim of the government shutdown. A bevy of indicators were to be released in the coming week but are now delayed.
• The week begins on Monday in China with economic growth data for the December quarter. In addition, the final estimates for 2018 are issued for retail sales, industrial production and investment. The Chinese economy likely grew by 6.5 per cent over 2018 (6.4 per cent in the December quarter), hitting official targets. But growth of 6.0-6.5 per cent is more likely in 2019.
• In addition, Chinese retail sales is tipped to have grown at a 8.2 per cent annual pace in December with production up 5.3 per cent and investment up 6 per cent.
• The International Monetary Fund (IMF) releases new economic forecasts on Monday. The data is likely to show a modest downgrade to growth expectations in 2019, currently estimated at 3.7 per cent. However it’s likely that IMF economists will factor in more Chinese economic stimulus and some resolution to the US-China trade dispute.
• On Tuesday in the US, data on existing home sales is released. Economists tip a 0.6 per cent fall in December sales after a 1.9 per cent lift the previous month. Sales stand at 3-month highs. Also the usual weekly data on chain store sales is released on Tuesday.
• On Wednesday the influential Richmond Federal Reserve manufacturing index is expected to be released with the House Price index and weekly data on mortgage applications. Over the last seven months US house prices have been rising 0.2-0.4 per cent per month.
• In the US on Thursday the weekly data on new claims for unemployment insurance is released together with the leading index and the Kansas Federal Reserve manufacturing index. The leading index rose by a modest 0.2 per cent in November after a 0.3 per cent decline in October and 0.6 per cent increase in September…
• Also on Thursday in the US the Markit ‘flash’ services and manufacturing indexes are issued. And similar ‘flash’ surveys are issued in France, Germany, Eurozone and Japan.
• On Friday in the US, so far no indicators are set down for release. Previously, data on durable goods orders and new home sales were scheduled to be issued.
US earnings season
• The US profit-reporting (earnings) season gets into full swing in the coming week. S&P 500 companies are expected to report a 14.3 percent rise in fourth-quarter earnings, lower than the 20.1 percent growth forecast in October, according to IBES data from Refinitiv. So far, the earnings season is progressing well with sharemarkets supported by better-than-expected results from global investment banks.
• Amongst companies reporting on Tuesday: IBM; Johnson & Johnson, Haliburton.
• Wednesday: Procter & Gamble; Ford Motor.
• Thursday: American Airlines; E*Trade; Intel; ResMed.
• Friday: Colgate-Palmolive.
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