The ASX finished the week relatively unchanged – with the ASX 200 just 0.8% down – and is set to start this week in the green following the S&P 500’s fourth straight week of gains.
The best-performing ASX sectors last week were Energy, Financials and Materials. The worst-performing sectors were Utilities and Real Estate, both down more than 2%, followed by Consumer Staples, down over 1%.
Best-performing stocks in the ASX top 100 were Bellevue Gold Ltd (ASX:BGL), up over 8%, followed by Downer EDI Ltd and AMP Ltd, both gaining more than 5%. The worst-performing stocks were Region Re Ltd, Virgin Money (LON:VM) UK CDI and Lendlease Group, all down over 6%.
This week all eyes will be on the release of retail sales (Tuesday) and the monthly CPI indicator (Wednesday), which is expected to slow to 5.2%.
The numbers will influence the Reserve Bank of Australia’s next rates decision.
“While the RBA is not expected to hike rates again before year-end, the rates market is assigning a 45% chance the RBA will hike rates in February by 25bp to 4.60%,” IG Markets analyst Tony Sycamore said.
Key economic data is also due in the US.
“This week, the key economic event in the US is the release of the Fed's preferred measure of inflation, Core PCE (Friday morning), which may influence the market's pricing of the expected timing of the Fed's first “adjustment” rate cut,” Sycamore said.
“The consensus expectation is for Core PCE to increase by 0.2% in October, which would see the annual rate ease to 3.5% from 3.7%, the lowest rate since April 2021. Headline PCE is expected to rise by 0.1% in October, which would allow the annual rate to moderate to 3.1% from 3.4% - on track to fall to 2.5% in the months ahead.”
What happened last week?
Here’s what we saw (source Commsec):
US markets
Were mixed in Thanksgiving holiday-shortened trading on Friday. Major retail shares rose slightly as Black Friday kicked off the holiday shopping season.
Walmart (NYSE:WMT), Macy's (NYSE:M) and Target (NYSE:TGT) rose between 0.2% and 0.9%, while Amazon (NASDAQ:AMZN) ticked higher by 0.02%. Johnson & Johnson (NYSE:JNJ) and Walt Disney (NYSE:DIS) led the Dow Jones index higher, up about 1% each. Apple (NASDAQ:AAPL) dipped 0.7% after Reuters, citing data from Counterpoint Research, said the iPhone maker saw a decline in smartphone sales during China Singles Day shopping season. Nvidia slid 1.9% on a news report the company has told customers in China it’s delaying the launch of an artificial intelligence chip.
- The Dow Jones index rose by 117 points or 0.3%.
- The S&P 500 index gained 0.1%.
- The Nasdaq index fell by 15 points or 0.1%.
- For the week, the Dow gained 1.3%, the S&P 500 lifted 1% and the Nasdaq added 0.9%. All three indexes notched their fourth consecutive weekly gains.
European markets
Edged up on Friday as investors focused on the prospect of interest rate cuts. The chemicals sector rose by 0.8% as Germany's BASF climbed 1.8% after Bloomberg News reported Abu Dhabi National Oil Company is exploring a potential acquisition of its Wintershall Dea unit.
The continent-wide FTSEurofirst 300 index gained 0.3% and was up 1% for the week. In London, the UK FTSE 100 index edged higher by 0.1% but dipped 0.2% for the week.
Currencies
Were mixed against the US dollar in European and US trade.
- The Euro rose from US$1.0900 to US$1.0948 and was near US$1.0940 at the US close.
- The Aussie dollar lifted from US65.55 cents to US65.90 cents and was near US65.80 cents at the US close.
- The Japanese yen eased from 149.19 yen per US dollar to JPY149.65 and was near JPY149.45 at the US close.
Commodities
Global oil prices fell on Friday after struggling for direction in a low-volume session as OPEC+ tries to resolve a disagreement over output quotas that forced the group to postpone a pivotal meeting. Hamas released 24 hostages held in Gaza under a four-day truce agreement with Israel, eroding the risk premium generated by the war.
- The Brent crude price fell by US84 cents or 1% to US$80.58 a barrel.
- The US Nymex crude price slid US$1.56 or 2% to $75.54 a barrel.
- Crude prices were little changed over the week.
Base metal prices climbed on Friday.
- Copper futures gained 0.8% and were up 1.6% over the week, helped by efforts to support the property market in China.
- Aluminium futures lifted 0.6% and posted a 1% gain for the week.
- The gold futures price rose by US$10.20 or 0.5% to US$2,003 an ounce. Spot gold was trading near US$2,002 an ounce at the US close. Bullion rose by 0.9% over the week.
- Iron ore futures gained US32 cents or 0.2% to US$130.16 a tonne on Friday. Iron ore rose for a fifth consecutive week, up 0.9% of its longest sretch of advances since January on China stimulus optimism.
What's next for Australian market?
Wealth Within chief analyst Dale Gillham explains what to expect from the ASX in the coming days and weeks.
Early last week, the All Ordinaries Index was edging its way higher up around 0.5%, in what was a promising start to the week. However, as has occurred many times this year and indeed something that has become more common in recent years, the market reversed.
This suggests that market psychology is still more negative and quite nervous; however, as an educator and trader, these conditions get me excited.
Most investors shy away when markets are not overly bullish. However, this is where you can grab many bargains when the inevitable rise occurs.
All too often, investors wait for strong, bullish markets and, in doing so, miss a lot of the gains. Now is a great time to skill up and do the research to set your portfolio up. So, while we still can’t confirm the down move is over, what we can do is get prepared for the next rise.
While I am more positive about our market, I am still cautious, given we need to see the All Ordinaries Index continue to rise. That said, a fall of one to two down weeks from now will not be too much of a concern.
What about small caps?
The S&P/ASX Small Ordinaries fell 0.011% on Friday to 2,683.80. Over the week it lost 0.92%.
It was a quiet day on the newsfront on Friday and that has followed through to this morning.
You can read about the following and more throughout the day.