By Craig James

Business investment in focus 

The week kicks off on Tuesday with an eclectic spattering of statistics. The Bureau of Statistics (ABS) issues preliminary quarterly readings on goods and services trade – an input to forthcoming Balance of Payments figures. The ABS also issues additional data on producer prices and detailed data on household income and wealth for the 2013/14 financial year.

Also on Tuesday usual weekly consumer confidence survey is issued by ANZ and Roy Morgan. 

On Wednesday, the ABS issues preliminary Construction Work Done figures. The data covers residential, commercial and engineering construction, but it is the residential building figures which act as an input to the national accounts. 

On Thursday, the ABS releases its survey of business investment – Private Capital Expenditure. The survey effectively has two parts – the measures of actual spending and the estimates of future spending for the 2015/16 year. 

After falling by 4.4% in the March quarter, we expect that spending on new equipment and buildings may have eased a further 6% in the June quarter, reflecting the wind back of mining investment. 

It’s important to note that this is just one aspect of business spending, it may not fully pick up the post-Budget spending by small business or general day-to-day spending of Australia’s 2.1 million businesses. 

In terms of the expectations component of the ABS business survey, the third estimate for spending in 2015/16 is usually revised higher from the second estimate – in fact the upward revisions have been anything from 3.4% to 17.8% over the last decade. 

If expected business investment for the 2015/16 year is revised up by around 5% to $110 billion, it would be regarded as a “good” result in current circumstances.

Another busy week of US economic data releases 

The week kicks off in the US on Monday with the release of the National Activity index. In China the Caixin “flash” manufacturing index is released – an early gauge on manufacturing production activity in August. 

On Tuesday, there is raft of economic indicators in the US. Both the CaseShiller and Federal Housing Finance Agency surveys on home prices are released with consumer confidence, new home sales and the influential Richmond Federal Reserve survey. The usual weekly chain store sales figures are also issued.

US home prices are around 5-6% higher than a year ago. Economists tip a rise in consumer confidence from 90.9 to 93.2. And new home sales may have rebounded by near 8% after falling 6.8% in June. 

On Wednesday, the July data on durable goods orders is released – goods designed to last three years or more. Economists tip a flat result with orders down 0.5% and non-transport goods up 0.2%. The weekly reading of housing finance is also issued on Wednesday. 

On Thursday the second reading (preliminary) of June quarter economic growth is released in the US together with pending home sales and the Kansas City Federal Reserve manufacturing survey. Economists now expect that the US economy rebounded in the June quarter, posting annualised growth around 3.1%. The regular weekly data on claims for unemployment insurance is also issued. 

And on Friday, data on personal income and spending is released together with the final estimate of August consumer sentiment, reported by the University of Michigan. Economists expect that income and spending both rose by 0.4% in July. 

Sharemarket, interest rates, currencies and commodities 

The Australian profit-reporting season moves into the final week. Overall it is clear that the economy was in something of a “holding pattern” over the past year. Both revenue and expenses of Australia’s largest companies grew by around 3% with profits flat. Companies have still been keen to lift dividends, cutting high cash levels to do so. In aggregate, dividends rose around 8% with a number of special dividends being paid.

On Monday, earnings results include Lend Lease, UGL, Beach Energy, Spark Infrastructure, nib Holdings, AWE Limited, Fortescue, APN Property and BlueScope Steel. 

On Tuesday, earnings are scheduled from BHP Billiton, Amcor, Oil Search, Ingenia, Independence Group, Scentre Group and Healthscope. 

On Wednesday, amongst those scheduled to issue their profit results are BC Iron, Drillsearch Energy, Charter Hall, NEXTDC, APA Group, WorleyParsons and Prime Media. 

On Thursday, earnings are expected from Horizon Oil, Flight Centre, Perpetual, Ramsay Health Care, Nine Entertainment, Southern Cross Media, Evolution Mining, Boral, Westfield, Cromwell Property and Kingsgate Consolidated. 

On Friday, scheduled earnings results include those from Northern Star Resources, Woolworths, Sandfire Resources and Harvey Norman.