It's reporting season again and most ASX-listed companies are set to announce their first half or full year results in the next few weeks. Here's a look at what to expect and a few stocks to watch.
RESOURCES STOCKS UNDER PRESSURE
From coal and iron ore to oil and gas, resources companies have had a horror 12 months as commodities prices continue to slide.
Profits will be under pressure and investors will be watching closely to see what actions companies take to navigate through the difficult environment.
That could include asset writedowns, further cost-cutting and possible capital raisings.
IG market strategist Evan Lucas says investor expectations are already very low and there's a decent chance of positive surprises, but overall the sector will probably continue to struggle.
"You'll probably get one or two that will do really well, but on the whole you'd probably be better off steering clear of it," he said.
Stocks to watch:
BHP Billiton
Rio Tinto
Fortescue
Santos
Woodside
Oil Search
DIVIDENDS (STILL) RULE
If there's been a sure-bet on the ASX since the global financial crisis, it's investing in a relatively strong, stable company with an attractive dividend yield.
That's likely to hold true again this month as investors look for solid returns in an uncertain economic environment.
Dividend-paying stocks could also get a boost if growing expectations of an interest rate cut on Tuesday - which would make term deposits even less attractive - prove true.
But Mr Lucas says companies will need to lift, rather than simply maintain, dividends to keep investors on-side.
"If you've got yield growth, you're going to do pretty well," he said.
Stocks to watch:
AMP
Commonwealth Bank
Westpac
National Australia Bank
ANZ
Telstra
FALLING DOLLLAR, RISING EARNINGS
The Australian dollar is currently trading at around 77 US cents, which is down from more than 90 US cents a year ago.
That'll give an easy earnings boost to any company that does a lot of their business overseas.
Stocks to watch:
CSL
ResMed
Macquarie Group
Westfield
RETAILERS' TURN TO SHINE?
Retailers have done it tough since the global financial crisis as would-be customers started saving more money and the high Australian dollar made buying from overseas websites more attractive.
But with the Aussie dollar down and sliding petrol prices putting more money into the pockets of consumers, there are hopes this is the year many retailers will finally turn around.
The early signs have been mixed: Harvey Norman shares soared in January on reports of a surge since Christmas, while JB Hi-Fi on Monday announced a two per cent slide in its first half earnings.
Stocks to watch
Woolworths
Wesfarmers
Harvey Norman
The Reject Shop
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