Smart Look At The Week: Ahead All Eyes On J Powell

2020-07-13     thesmartinvestor
Smart Look At The Week: Ahead All Eyes On J Powell

There is more economic data related to COVID-19 for the market to digest and perhaps scare itself witless next week.

On Tuesday, Fed chair, Jerome Powell, will testify before the Senate Banking, Housing, and Urban Affairs Committee on matters relating to the Coronavirus Aid, Relief, and Economic Security Act. When Powell last spoke, markets lost ground after he warned of many unknowns ahead. He also said the economic path is subject to significant downside risk.

China will set its Loan Prime Rate on Wednesday. In April, it lowered the benchmark rate by 0.2% in an effort to shore up the flagging economy. It is expected to sit on its hands this time.

Other central banks that are pencilled in for in interest-rate decisions include Turkey, Indonesia, Thailand and South Africa. Bank Indonesia is expected to trim its reverse repurchase rate by 0.25%.

Elsewhere, the Bank of Thailand could also reduce its policy rate by 0.25% to 0.75% in response to the deterioration of the domestic economy. The GDP numbers for the first quarter, which are due next week, are expected to indicate that the Thai economy shrunk 4.2% in the first three months of the year. It would be the worst economic performance in eight years.

Japan will report first-quarter GDP, which is expected to show a 5% annualised contraction. In the fourth quarter of 2019, the Japanese economy contracted 7.1% on an annualised basis. It was largest shrinkage since the second quarter of 2014.

The UK will report retail sales for April, which is forecast to show a 22.7% drop. In March, it registered its biggest-ever decline of 5.8%, after many stores closed as a result of the lockdown.

And finally, a handful of reports from some Straits Times Index (SGX: ^STI) should wrap up the first-quarter earnings season. They include UOL Group (SGX: U14), Singtel (SGX: Z74), City Developments (SGX: C09) and Sembcorp Industries (SGX: U96).

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Disclosure: David Kuo does not own any of the shares mentioned.

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