The ASX is expected to rise today, following on from the S&P 500’s 19-month high.
ASX 200 futures are trading 16 points higher, up 0.22% as of 8:20 am AEDT.
“The ASX200 finished 121 points (1.72%) higher last week at 7,194, following the dovish RBA on-hold decision and sub-par GDP growth, resulting in expectations of RBA rate cuts for the second half of 2024,” writes IG Market analyst Tony Sycamore.
The best-performing sectors were Real Estate (+3.53%), Consumer Staples (+2.59%) and IT (+2.14%). Energy (-1.30%) and Utilities (-0.76%) were the only two sectors to lose ground last week.
US stock markets closed higher for a sixth straight week, despite a strong US employment report. Stronger numbers pushed back the timing and extent of 2024’s mooted Federal Reserve rate cuts.
Non-farm payrolls increased by 199,000 in November versus the expected 183,000. The unemployment rate fell to 3.7% versus an expected 3.9%. Average hourly earnings rose by 0.4% MoM versus 0.3% expected and the participation rate ticked higher to 62.8%.
“The run of data that proceeded Friday's NFP data has mostly been softer and equity markets appeared willing to overlook NFP as an outlier. However, the equity market is unlikely to be so forgiving if it gets another fright this week from either CPI, the FOMC meeting, or retail sales,” Sycamore noted.
Here’s what we saw:
- Dow Jones +0.36%;
- S&P 500 +0.41%;
- NASDAQ +0.45%;
- Russell 2000 +0.67%;
- Gold -1.53% at US$2,014.5/oz;
- WTI Oil +2.22% at US$71.23/bb;
- Iron Ore +1.90% at US$135.45/t; and
- AUD -0.32% to 0.6583 US cents.
What's next for Australian stock market?
Wealth Within chief analyst Dale Gillham runs the ruler over what to expect from the Australian market in the coming days and weeks.
“There is a saying that all good things come to those who wait, and over the past few weeks and months, I have urged everyone to be patient as the time to buy some great stocks will come.
"While I was positive, I was still being very cautious given how many false triggers we have seen in the past few years. However, this week, our patience has been rewarded as we have seen the All Ordinaries Index rise over 1% to its highest level in eleven weeks.
"I previously mentioned that for me to be more positive, the price needed to continue to rise this week above 7,334 points, which is what has occurred. But what I am even more excited about is that this current move is being driven by the big end of town, with the Financials and Materials sectors both rising over 1%.
“We need to remember that the top 20 stocks in our market make up around 50% of the market capitalisation, so for our market to gain momentum in a particular direction we need to see these stocks move.
"Right now, there are many stocks in the top 20 looking great including CBA and WES. While it is a little too early for CSL Limited (ASX:CSL), Macquarie Group Ltd and Coles Group Ltd, these stocks are worth putting on your watch list.”
What about small caps?
The S&P/ASX Small Ordinaries closed out Friday 0.21% higher. It finished 1.28% higher for the week.
It has been slow on the news front this morning, however, you can read about the following and more throughout the day.