The ASX is set to rise today. ASX 200 futures are 0.8% higher at 7,781 points. It follows a stronger close for Wall St on Friday, where the S&P 500 and Nasdaq gained 0.5% on the day and the Dow Jones closed 0.1% stronger.
A positive start could see a reversal of fortune for the ASX this week. The ASX 200 ended last week down 165 points (-2.08%) at 7,777, as concerns over the unwinding of the Japanese yen "carry trade" and fears of a US recession shook global markets.
Energy (-4.92%), Information Technology (-3.64%), Financials (-2.57%) and Materials (-2.54%) were the key sectors dragging the index lower. Meanwhile, Utilities (+0.04%), Health Care (-0.01%), Consumer Staples (-0.90%) and Telecommunications (-1.25%) sectors managed to outperform.
Among individual stocks, Audinate (-37.59%), Cettire (-14.50%), Pacific Smiles Group (-10.95%) and Novonix (ASX:NVX) (-10.22%) faced significant declines, while Betmakers (+9.88%), AMP (+8.86%), Pilbara Minerals (+7.34%) and Appen (+5.88%) posted solid gains.
“This week, the key event on the local data calendar is Thursday's Labour Force report. Last month (June), the Australian economy added 50,200 jobs, and the unemployment rate increased to 4.1% from 4.0% prior,” IG Markets Tony Sycamore said.
“This month, the market expects the economy to add 25,000 jobs and for the unemployment rate to remain at 4.1%. The Australian interest rates market starts the week with a 25bp RBA rate cut almost fully priced before year-end and two rate cuts fully priced by April 2025.
“Elsewhere, the Australian June half-profit reporting season picks up speed, with earnings reports scheduled from companies including JB HiFi, CSL, CBA, Cochlear and Telstra.
Calmer weather in the US
Wall Street concluded a volatile week on a calmer note with Friday's session marked by relative stability and the absence of significant economic reports or earnings announcements.
The week commenced under the shadow of recession fears and the unwinding of the Yen carry trade, which exerted downward pressure on markets. However, better-than-expected ISM services PMI data and initial jobless claims alleviated recession concerns, leading to a relief rally heading into the weekend.
Over the week, the S&P 500 closed marginally lower by 0.04%. The Dow Jones Industrial Average declined by 239 points (0.60%), while the Nasdaq 100 recorded a modest gain of 0.39%.
“This week is poised to be another eventful week with US CPI, retail sales and a plethora of Fed speeches on the calendar,” Sycamore said.
“Retail sales will be under the microscope and are a potential flash point if weaker than expected. The all-important retail control group which flows through into GDP is expected to rise by 0.2% MoM in July easing from a robust rise of 0.9% in June.
"Q2 2024 earnings season continues with reports scheduled from companies, including Home Depot (NYSE:HD), Walmart (NYSE:WMT), Cisco (NASDAQ:CSCO) and Alibaba (NYSE:BABA). The rates market starts the week, pricing in 37bp of Fed rate cuts for September and 103 bp cumulative by year-end.”
European share markets
Closed higher on Friday, with the healthcare sector among the top gainers, rising 1.7% and marking its fourth consecutive session of gains. Novo Nordisk (CSE:NOVOb) (NYSE:NVO), Europe’s largest company by market value, surged 6.3%, extending its recovery after a disappointing profit outlook triggered a sell-off earlier in the week.
In economic data, Germany's annual consumer prices rose by 2.6% in July, in line with expectations, while Italy's EU-harmonised consumer prices increased by 1.6%, slightly below the forecast of 1.7%.
- The FTSEurofirst 300 index gained 0.6%, closing the week 0.4% higher.
- In London, the UK FTSE 100 index edged up 0.3% on Friday, though it declined 0.1% over the week.
Currencies mixed against US dollar; oil prices rise
Currencies
Experienced a mixed performance against the US dollar in European and US trading. The Euro strengthened, moving from US$1.0909 to US$1.0930, settling near US$1.0915 at the US close.
Conversely, the Australian dollar weakened, falling from US66.04 cents to US65.66 cents, ending near US65.70 cents. The Japanese yen firmed from JPY147.28 to JPY146.31 per US dollar, closing near JPY146.60.
Commodites
Global oil prices saw an uptick on Friday, driven by positive economic data and remarks from US Federal Reserve policymakers suggesting a potential interest rate cut in September. These developments eased demand concerns, while ongoing fears of a widening conflict in the Middle East heightened supply risks.
Brent crude rose by US50 cents or 0.6% to US$79.66 per barrel and US Nymex crude increased by US65 cents or 0.9% to US$76.84 per barrel. For the week, Brent gained 3.7% and Nymex rose 4.5%.
Base metal prices also climbed, with copper futures rising 0.9% due to US jobs data alleviating growth slowdown fears, alongside falling inventories in China.
- Aluminium futures increased by 0.7%.
- Copper fell 2.5% for the week, while aluminium gained 1.3%.
- Gold futures advanced by US$10.10 or 0.4% to US$2,473.40 per ounce, buoyed by a dip in longer-term US Treasury yields.
- Spot gold was near US$2,431 per ounce at the US close, marking a 0.1% gain for the week.
- Iron ore futures rose by US51 cents or 0.5% to US$101.26 per tonne, though concerns over demand and high supply pushed prices down 2.6% over the week.
What about small caps
The S&P/ASX Small ordinaries (XSO) finished even on Friday at 2,925.70, however, was down 3.24% for the week.
It has been a steady start on the news front and you can read the following and more throughout the day.
- Sovereign Metals Ltd (ASX:SVM, OTC:SVMLF, AIM:SVML) has started an infill drilling program at its Kasiya Rutile-Graphite Project in Malawi to support ongoing technical studies. A resource upgrade is expected in early 2025.
- Predictive Discovery Ltd (ASX:ASX:PDI, OTC:PDIYF) has released additional drilling results from the NEB and BC area of its 5.38-million-ounce Bankan Gold Project in Guinea. Results are from resource definition drilling programs at Gbengbeden, BC and 800W, which are aiming to further define mineral resources and establish a new deposit at 800W, as well as additional exploration drilling at the SB target.
- Cobre Ltd (ASX:CBE) announced the results from a recently completed 1,920-metre diamond drilling program at its wholly owned Okavango Copper Project (OCP) in the Kalahari Copper Belt (KCB), Botswana.
- Yandal Resources Ltd (ASX:YRL) advised that a preliminary review of regional soil sampling results from across the northwest portion of the Ironstone Well-Barwidgee (IWB) Gold Project is complete. In addition to this, the company announced that the 2024 diamond program across the IWB Gold Project is also complete, with the two EIS co-sponsored diamond holes successfully drilled to target depth.
- Iondrive Ltd (ASX:ION) has signed a collaboration agreement with the chair of Production Engineering of E-Mobility Components of RWTH Aachen University (PEM) and PEM Motion GmbH (PEM Motion). This collaboration aims to advance sustainable battery recycling technologies by leveraging PEM’s extensive expertise in battery technology and recycling, along with Iondrive’s innovative Deep Eutectic Solvents (DES) Sustainable Battery Recycling process.