Australian stocks edged lower today, despite predictions of a rise on the back of last week’s buoyant US market, which was led up by big tech – not a sector that claims as much market share here.
Of course, the other big difference for Australia is that our central bank isn’t finished turning the rate screws yet, unlike the Fed. But more of that later.
The S&P/ASX200 slipped 22.10 points or 0.32% to 6,954.40. Over the last five days, the index has lost 0.34% and 2.84% over the last 52 weeks.
Apart from Utilities, up 0.49%, all sectors were down. Energy was in deeper red territory than most, down 0.75%.
eToro market analyst Josh Gilbert said: "The ASX200 finished in the red last week after the RBA resumed its hiking cycle and raised the cash rate to 4.35%. Energy was the biggest loser of the week as crude oil lost ground, falling below AU$80 a barrel.
“US stocks continued their strong run, with the magnificent-seven doing what they do best – in particular; Microsoft (NASDAQ:MSFT) hit a new record high, and Nvidia made gains for eight straight sessions.
Chinese economy in focus
“China’s economy will remain in focus this week, with a wealth of economic data on the calendar following its fall back into deflation last week. Unemployment, retail sales and industrial production will all be in focus, as well as Joe Biden’s meeting with Xi Jinping.
" Alibaba (NYSE:BABA) and Tencent also hand down earnings. In positive signs for a recovery in the Chinese consumer, both Alibaba and JD.com said they saw strong sales from Singles Day, with JD saying sales volumes were at record highs.
“US Inflation will also be in focus following a more hawkish tone from Jerome Powell last week. That stern tone may be felt across the vast list of Federal Reserve speakers this week, which may put markets on the back foot.
“The expectation is for both headline and core inflation to decline again this week, which would further solidify the market’s expectation that the Fed is finished with hiking rates.
Bitcoin and crypto on the up
“Bitcoin and crypto continued their ascents over the weekend, with bitcoin tipping over $37,000, making it four weeks of gains for the largest crypto asset.
“A lot of optimism is coming from the growing expectation that a bitcoin spot ETF is on the way. This opens the door to institutional funds that have so far sat on the sidelines, and that investment simply can’t be underestimated. The ETF expectation is the top of a growing list of catalysts, which gives the current rally further legs.
“The Federal Reserve looks to have finished its hiking cycle, with rate cuts on the horizon as early as May or June, and March’s always-important ‘halving’ is set to tighten supply further."
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