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FY13 Earnings Season Is Upon Us! Up First, REITs & Trusts!
Forward, Tradeable | 13 January 2014
By: Justin Harper
Articles (23) Profile
By: Simeon Ang
Articles (125) Profile

Over the weekend we had to contemplate the possibility that the US economic recovery would be just as sputtery as the Chinese economy. The release of disappointing job figures seem to add some uncertainty as to whether the US is really recovering. This is particularly important given that the Federal Reserve is commencing its bond purchase programme tapering.

Investors seem to have taken the poor jobs figures well considering how Asian markets are rising in morning trade. The Straits Times Index is currently sitting on the fence, swinging between early gains and subsequent losses.

Basic materials and technology stocks are faring a little bit better than the broader STI, while healthcare, and oil and gas stocks are dipping into negative territory.

This week also marks the beginning of 4Q13’s earnings season! Be prepared as most REITs and trusts will usually be the first in line to report earnings for FY13.

Read on to find out more of what’s in store for the trading week ahead!

What to Look Out for in the Next 7 Days…

In Singapore…

  • November retail sales
  • Non-oil domestic exports for December
  • December balance of trade

Singapore saw a few wobbles in economic data towards the end of 2013 but on the whole it was a healthy year for the economy with GDP growth of 3.7 percent.

Among those wobbles were retail sales which dipped 9.4 percent in October. This was mainly attributed to lower car sales. With fluctuating COE prices ahead of some changes coming in on 1 February, many drivers have postponed new car purchases for the time being.

November’s print is out on Wednesday and will hopefully show some cheer for the local economy, although car sales could drag down the final reading.

Non-oil exports also slipped at the back end of last year, shrinking 8.8 percent in November, due to weaker demand for both non-electric and electronic goods. Observers will be hoping for a pick-up in NODX figures for December, along with Singapore’s balance of trade which is due out on Friday.

Around the World…

In the US, look out for,

  • December retail sales
  • Consumer prices index for December
  • December housing starts
  • Industrial production (December)

Traders will be looking for clues from the US economy as early as possible in 2014 to set the tone for the year ahead. We are still working our way through December’s data which may provide some hints as to what to expect from the world’s biggest economy this year.

First up are retail sales which are the lifeblood of the US economy. Retail sales gained 0.7 percent in November and are expected to rise again for December, given the Christmas shopping uplift.

Inflation figures in the form of CPI, are also due out. They showed a fairly flat rate of increase in November (up 1.2 percent). December’s print is expected to show a slightly higher rise of 1.4 percent. CPI is important given the low interest rate environment. Should inflation start to creep up, interest rates might need to follow suit.

Housing starts will also been closely watched as a bellwether for the US economy. November’s reading was the best in more than five years, rising an impressive 22.7 percent, and breaking through the one million homes mark.

While a similar rise is highly unlikely for December’s print, the hope is the momentum will continue. To cap off a busy week in the US data department we have industrial production numbers out on Friday.

November’s figures saw a sharp rise of 1.1 percent which was another reason to be optimistic about the US economy, and more weight for the argument to taper Fed asset-buying. Expectations for December’s reading are lower at 0.5 percent but there is a chance of a surprise.

Europe:

  • November industrial production

The eurozone continues to be a mixed bag with faint hopes of a sustained recovery still some time off. Germany continues to drive the economic region’s fortunes but sadly this isn’t enough to affect the poor factory output data as of late. October’s reading was 1.1 percent down on the previous month which was below expectations.

Scroll down to our Calendar below to find out more about the exact dates of these figures release as well as other important economic data.

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This is a co-written article of Shares Investment, which lays out the analytical ideas and thoughts of the authors, who are well versed in investments and market concepts.


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