Key takeaways:

• Commonwealth Bank headlines this week’s round of ASX earnings reports

Slowing jobs growth in the US, and a sharp sell-off in Apple shares led benchmark indexes lower on Friday evening, with ASX futures also suggesting a slow start to the new trading week.

Economic Calendar and News

All of this week’s major economic developments are likely to come out of the United States, which was hit with an unexpected credit rating downgrade from Fitch last week. The ratings agency downgraded the world’s largest economy from its top-tier sovereign credit status to a rating of AA+.

Looking forward, the latest iteration of the Consumer Price Index (CPI) will be released on Thursday.

According to preliminary estimates, consumer prices likely rose 0.2% last month, which would be in alignment with the rate from June. On an annual basis, growth is expected to come in at 3.3%, up from the 3% seen a month prior. 

In terms of core inflation, which excludes food and energy costs, the reading is expected to remain unchanged at 4.8%, the slowest pace in nearly two years. On a monthly view, that figure could be 0.2%, which would correspond with the two smallest consecutive figures in more than two years.

A day later, the Bureau of Labor Statistics will publish the Producer Price Index (PPI), which assesses inflation for manufacturers and wholesalers. Producer prices are tipped to have increased by 0.2% last month, after rising 0.1% in June. Year-over-year, they potentially grew at a rate of 0.7%, compared with an annual gain of 0.1% in June.

Stocks on watch

The major talking point this week will be Commonwealth Bank (ASX: CBA), the nation’s largest lender. With its full-year results due on Wednesday, the consensus view in the market is that the bank’s cash earnings rose 4.4% to an estimated $10.1 billion. Based on broker forecasts, the bank’s total dividends for FY23, including the interim dividend earlier this year, could be $4.32 per share.

CBA’s results will be scrutinised closely for the first real clues on how Australian households are coping on the back of a series of rate hikes that have pushed the official cash rate to 4.10%. 

While there is a growing view that we could be near the RBA’s terminal cash rate, the so-called ‘fixed-rate borrowing cliff’ looms as a risk for lenders and the economy at large. That refers to the significant volume of mortgages set to roll over from low variable rates to fixed rate loans with much higher repayments. As well as key data on arrears and credit growth, the bank’s margins, amid intense competition, will also be in focus, as will its outlook for the Australian economy.

Insurance firm Suncorp (ASX: SUN) is another name on the calendar to report earnings this week. On Friday the company was advised by the ACCC that its proposed $4.9 billion transaction to sell its banking division to ANZ was blocked amid concerns regarding competition. 

While the two parties will appeal that ruling, Suncorp’s earnings, due Wednesday, will likely garner attention for another reason – insurance premiums. It is the same reason that QBE Insurance (ASX: QBE) may also find itself a talking point when it reports its half-year results a day later. Significant increases in insurance premiums have provided a tailwind for the industry.

Investors will be looking for further commentary from AGL Energy (ASX: AGL) about its efforts to transition away from fossil fuels when the company reports this Thursday. Several weeks ago the business announced an upgrade to its FY23 earnings forecast, guiding for a profit of between $255 million to $285 million, compared with a prior forecast of between $200 million and $280 million. 

AGL management also stated that the company expects to deliver its biggest profit in three years in 2024, somewhere between $580 million and $780 million. Observers will take a close look at how the company plans to spend or distribute its earnings.

A selection of other high-profile names with earnings scheduled for the week ahead include gold miner Newcrest Mining (ASX: NCM), property listing portal REA Group (ASX: REA), diversified financials firm AMP (ASX: AMP), plus building materials suppliers James Hardie (ASX: JHX) and Boral (ASX: BLD).

Escalating conflict off the coast of occupied Crimea could put the spotlight on crude oil prices, which were already circling a four-month high late last week. A Ukrainian drone targeted a Russian oil tanker over the weekend, representing the second strike on a Russian ship in two days. Such uncertainty could prompt oil traders to make a move, which might have implications for ASX-listed energy plays like Woodside (ASX: WDS), Santos (ASX: STO), and Beach Energy (ASX: BPT).

US earnings over the coming days include but are not limited to Palantir (NYSE: PLTR), BioNTech (NASDAQ: BNTX), Alibaba (NYSE: BABA), Barrick Gold (NYSE: GOLD), Rivian (NASDAQ: RIVN), Walt Disney (NYSE: DIS), and Eli Lilly & Company (NYSE: LLY).