Spectre of earnings confession adds to market risk

“There’s just seven sessions left in the financial period, which means sometimes people decide to crystalise any losses they’ve had this financial year,” Ms Lee said.

“So we could see a bit of selling this week for firms that have not done well.”

Ms Lee said ASX 200 stragglers hurt during the coronavirus slump – including the likes of Southern Cross Media, oOh! Media, G8 Education, Flight Centre, and Webjet – were particularly vulnerable.

The potential for negative corporate updates and re-ratings was also high, she said.

“The scenario is that a lack of bad news – as opposed to good news – is going to be a positive thing for the market.

“There are huge expectations for negative revaluations of property trusts, and bricks and mortar retail, so anything better than that will be seen as a plus for many.”

Wall Street will provide a weak lead for local stocks on Monday after the Dow Jones lost 0.8 per cent and the S&P 500 fell by 0.5 per cent on Friday.

The ASX 200 had earlier limped into the weekend but still managed to rise 1.6 per cent for its seventh weekly rise in eight.

The trickle of earnings reports continues on Monday with IGA supermarket supplier Metcash due to publish its full-year results, potentially offering an insight into the impact of panic buying and hoarding during the height of the coronavirus pandemic.

Building firm CSR is also due to host its annual general meeting on Wednesday in what may offer a glimpse of how the construction industry is holding up.

On the economics front, Reserve Bank governor Philip Lowe Governor Lowe is due to speak on Monday morning at the ANU Crawford Leadership Forum on the global economy and COVID-19.

“There, he may also share insights from the economic experience abroad, and will likely, in our view, call for a tapering of fiscal stimulus that ensures the recovery is not put at risk,” NAB’s markets research team said in a note.

Preliminary merchandise trade data will be published by the Australian Bureau of Statistics on Tuesday, with ANZ expecting the goods balance surplus to drop a touch on the previous month.

Commonwealth Bank will also release its weekly card spend data, while the bureau’s latest business survey on Wednesday will show how firms fared in mid-June following the easing of social distancing restrictions.

CBA expects job vacancy data on Thursday to decline, given the recent deterioration in the labour market, though it said the timing of the survey – the third Friday in May – could complicate the result.

NAB has flagged it will also update its consumer spending and business cashflow report this week.

Offshore, and the Reserve Bank of New Zealand meets on Wednesday. It is expected to leave its policy settings unchanged.

In the US, durable goods orders for May will show how business spending is faring amid the ongoing rise in unemployment.

The country’s personal income and spending report for May is tipped to reveal some recovery in spending amid a further slowing in core inflation.

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