The Week Ahead: It’s Earnings Season Again

It seems that no sooner has one earnings season ended than another one starts.

Next week sees the first Straits Times Index (SGX: ^STI) company kick off a period of quarterly reports. Singapore Press Holdings (SGX: T39), the owner of The Straits Times, is pencilled in for third-quarter figures on Friday. In April it posted a fall in quarterly profits. But that was largely due to the absence of an exceptional profit.

There are core inflation numbers, headline inflation figures and US retail sales for June on tap next week. This week, the Bureau of Labor Statistics said 287,000 were created. That was much better than market expectations. The unemployment rate stood at 4.9%, which is lower than the historical average. Unless the inflation numbers suggest something to the contrary, it could be hard for the Federal Reserve to explain away anything other than a rate hike next time around.

On the other side of the Pacific, China will report Balance of Trade figures for June. The import and export figures could provide some useful clues on China’s success in rebalancing its economy. China will also report its economic growth rate for the second quarter. This has slowed from around 7.5% a year ago to 6.7% in the last quarter.

The Bank of England has an important interest-rate decision to make next week. Currently it stands at 0.5%, following a unanimous vote last month to keep interest rates unchanged. But what will the Monetary Policy Committee decide to do now, given that the UK has decided to leave the European Union and sterling is wallowing at a 31-year low against the US dollar?

And finally, the health of the Singapore economy will be on show when Statistics Singapore will announce advanced estimates for the second quarter. Over the last three quarters, the economy has grown at an annualised rate of 1.8%. The Department of Statistics will also report retail sales for May. Interestingly, spending by consumers has been resilient with sales of motor vehicles driving much of the growth. That could be good news for motor dealers that include Jardine Cycle & Carriage (SGX: C07).

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