As investors contend with a highly uncertain outlook for business conditions, results in the week ahead will be significant for the sharemarket and confidence.

Results from the two of the major banks will be closely watched for commentary on how developments in Victoria are hitting the nation’s lenders.
Commonwealth Bank’s results will also be closely watched for management’s dividend decision after the financial services regulator walked back capital preservation guidance.
As the country’s banks grapple with net interest lending margin pressure and higher bad debts, CBA is expected to deliver a cash net profit after tax of $7.643 billion on Wednesday, according to UBS estimates, which would mark a 10 per cent decline on the prior year’s result.
And any dividend payout ratio for the final dividend markedly below the 50 per cent guidance ceiling set by the Australian Prudential Regulation Authority is likely to be received frostily by shareholders.
Last year the bank paid a final dividend of $2.31 per share, which UBS expecs to be halved more than halved this year to 95¢ a share.
As two of the country’s largest public-use, fixed-asset owners, full year results and outlook commentary from Telstra and Transurban will also scrutinised as widely-held stocks that also offer insights into changes in economic activity.
Telstra is expected to hand down a net profit result of $2.12 billion. The telecommunications compny has provided a shelter from some of the worst of the economic upheaval, with the UBS estimate for profit just 4.3 per cent short of the prior year.
Toll-road owner Transurban is tipped to announce a net profit result of $98 million after a drop off in traffing volumes in the early stages of pandemic before recovering as communters preferenced private transport. In 2019 the company delivered a net loss of $95 million but a free cash flow of $476 million over the year.
A key focus over the week will be corporate Australia’s assessment of the heightened restrictions in Victoria and how the uncertain outlook for business conditions will influence growth and investment plans.
Quarterly results from ANZ and National Australia Bank due in the week following will also be significant to gauging the outlook for company earnings.
“We expect satisfactory expense, credit quality and capital outcomes in [third quarter results],” Morgan Stanley analysts said in analysis previewing ANZ’s report.
“However, developments in Victoria make commentary on the outlook important and additional provisions more likely.”
ANZ is expected to report a 5 per cent increase in non-performing loans in the June quarter, rising from 94 basis points of total loans in the half year ended March 30, to 98 basis points.
Morgan Stanley does not expect management teams to have a full enough picture to provide full year earnings estimates.
“On guidance, we do not envisage many companies being prepared to give much in the way of full-year direction,” the investment bank’s equity strategist Chris Nicol said.
“Perhaps the trend this year will be to guide first half 2021 in the context of the current crisis setting. Indeed, when we surveyed our analysts, only 35 per cent of our Industrials coverage is expected to give guidance and this is heavily skewed to telcos and defensives.
The labour market report for July due on Thursday will provide investors with further evidence of the state of the economy and household incomes, although it will not include the affects of the latest round of containment measures in Victoria.