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ASX this week: China economy, US corporate earnings

ASX this week: China economy, US corporate earnings

China's quarterly economic growth data, alongside the start of US earnings reporting season, may dictate Australian share market movements this week.

Australian stocks, as measured by the benchmark S&P/ASX 200 index, declined 0.6% last week to end Friday at 5,434.03, their first weekly loss since September 16.

On Friday:

  • Brent oil dropped 0.2% to US$51.95 a barrel, and was little changed for the week
  • WTI crude fell 0.2% to US$50.35 a barrel; up 1.1% for the week
  • Iron ore with 62% content delivered to Qingdao, China, advanced 1.1% to US$57.28 a dry metric tonne, gaining 2.5% for the week
  • Spot gold traded at US$1,251.03 an ounce; down 0.5% for the week
  • Australian dollar traded at 76.18 US cents, and weakened 0.3% to 75.97 US cents at noon Sydney time on Monday

What to watch this week

China, Australia's largest trading partner, will release various economic data this week, but it is the nation's economic growth for the third quarter that will dominate attention, according to CommSec.

The world's second-largest economy will announce its gross domestic product, along with monthly readings on retail sales, production and investment, on Wednesday.

"Predictably, growth will ease further in coming years to reflect maturation of the economy's development," CommSec said. "In terms of the other activity indicators, retail sales should have continued its run of double-digit annual growth."

China's economy grew 6.7% year-on-year in the June quarter.

Meanwhile, US corporates start to report their latest financial results this week. Some of the biggest listed companies scheduled to make announcements in the next five days include Bank of America, General Electric, Goldman Sachs, Microsoft and Verizon.

CommSec said, quoting the S&P Global Market Intelligence unit, that third-quarter earnings in S&P 500 companies might have fallen 1% from a year ago, led by the energy sector.

Losses were also expected at real estate and industrial companies, while material and financial stocks may deliver "more upbeat results", CommSec added.

Locally, the Australian Bureau of Statistics has September employment data scheduled for release on Thursday.

"We tip job growth of around 15,000 in the month and the jobless rate to lift modestly to 5.7%. A soft employment result and a super-low inflation outcome at the end of October could open the door for a November rate cut," CommSec said.

Stock movers

Below are the five best- and worst-performing ASX 200 stocks for the week ended Friday, October 14.

Company/Index

ASX code

Weekly price change

BT Investment Management

BTT

+10.5%

Monadelphous Group

MND

+10%

Greencross

GXL

+8.3%

Beach Energy

BPT

+7.7%

Gateway Lifestyle Group

GTY

+5.5%

S&P/ASX 200

XJO

-0.6%

OFX Group

OFX

-9.9%

APN Outdoor Group

APO

-10.7%

Iluka Resources

ILU

-10.8%

NextDC

NXT

-11.2%

Estia Health

EHE

-12.7%

Past performance is not a reliable indicator of future performance. Source: Bloomberg

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. The inclusion of companies in this article does not constitute a recommendation and it’s vital to remember that the value of shares in any company can fall as well as rise, which means you could lose money by investing in them. Investors should consult a range of resources, and if necessary, seek professional advice, before making investment decisions in regard to their objectives, financial and taxation situations and needs because these have not been taken into account. Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and a Participant of the ASX Group and Chi-X Australia.