ASX Set to Rise After Wall Street Rebound; Oil Prices Decline
This week, sharemarket volatility is anticipated as local investors brace for inflation data that could lead to an interest rate hike from the Reserve Bank, while also keeping a close watch on moves from other major central banks.
Futures indicate a strong start on Monday for the local bourse, with the S&P/ASX 200 expected to open up 0.8%, spurred by Wall Street's solid rebound. The rebound followed inflation data that increased expectations of a US Federal Reserve interest rate cut by September.
This comes after last week’s turbulent sharemarket, marked by a significant sell-off in the US tech sector that impacted markets globally. Despite a rally on Friday, the ASX 200 ended the week down 0.6% and has dropped 1.7% since reaching a record high in mid-July.
Australia’s June quarter inflation data, to be released Wednesday, will be crucial for determining local interest rates. Consensus forecasts predict a 1% quarterly rise and a 4% annual increase in trimmed mean inflation, but higher numbers could make it difficult for the RBA to maintain the cash rate at 4.35%.
The tech sector sell-off will face another test as Amazon (NASDAQ:AMZN), Meta Platforms (owner of Facebook (NASDAQ:META)), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT) report their June quarter earnings this week. Australia's profit season begins with Rio Tinto’s half-year earnings on Wednesday.
Stocks to Watch:
- Fletcher Building (ASX:FBU) expects a NZ$30 million ($26.9 million) hit to FY 2025 earnings due to operational issues with a third-party cement transporter.
- Pacific Smiles Group (ASX:PSQ) received a revised proposal from Genesis Capital to acquire all shares via a scheme of arrangement for $1.90 per share, offering shareholders the option for partial or full consideration in scrip. The board and its advisers are currently evaluating the proposal.