Look out for local housing & Chinese data, US reporting season this week

Local housing market data, a deluge of Chinese economic data and the start of the US earnings season are among the likely key drivers this week.

That follows another week in which the local share market continued to outperform, the Top 50 Index gaining 0.33% while the key Australian and US indices fell more than 1.2%.

The Top 50 Index has now gained 6.4% this year.

The head of wealth research at Craigs Investment Partners, Mark Lister, says Orion Health [NZX: OHE]  was last week’s biggest winner with its shares rising 12.9% after the announcement it had signed a contract with Queensland’s largest health service, Metro North.

Air New Zealand [NZX: AIR] was another big gainer, up 6.9% on speculation it might be able to sell its stake in Virgin Australia at near the market price.

On the negative side, Sky City [NZX: SKC] shares fell 8% on the news its chief executive, Nigel Morrison, is leaving at the end of the month.

On the data front locally, perhaps the most significant figures will be those from the Real Estate Institute.

Mr Lister says the market will be looking to see whether the Auckland market has recovered from its recent weakness and whether the strength seen in much of the rest of the country continues.

China numbers
But the big data this week will be from China, including its March quarter GDP figures.

The market is expecting the pace of growth in China to slow to 6.7% from 6.8% in the December quarter and that will be the third consecutive quarter of sub-7% growth and the lowest rate of growth since the first quarter of 2009 in the depths of the global financial crisis.

Retail sales, inflation and production figures from China are also expected.

The US reporting season kicks off this week with some key financial companies such as JP Morgan, Bank of America, Wells Fargo and Citigroup all reporting, as well as Unilever and Blackrock.

“Earnings expectations for the S&P500 have come down further over the last week with the market now expecting an aggregate decline in earnings per share of 7.9%, relative to the same quarter a year ago,” Mr Lister says.

That compares with expectations at the beginning of this year that March quarter earnings would grow 1.2%.

“Seven out of 10 sectors are forecast to experience an earnings decline,” he says.

Energy companies are expected to suffer most with earnings down 105% while those expected to increase earnings are consumer discretionary, up 11%, telcos, up 5% and healthcare, up 3%.

The S&P500 Index is up 0.18% since the start of this year.

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