Expectations for a weak earnings season in the US shouldn’t affect today’s expected ASX rise.
Interestingly, bank stocks rallied on stronger-than-expected earnings from JPMorgan (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC), however, other S&P 500 companies are gearing up for sharp profit falls.
ASX 200 futures are 0.2% higher at 7,390, pointing to a solid day of trading.
The markets are likely to be influenced by earnings commentary as well as a speech by Federal Reserve Bank of Richmond president Thomas Barkin, governor Michelle Bowman and New York Fed president John Williams.
Meanwhile, the Reserve Bank of Australia (RBA) will release the minutes of its April monetary policy meeting.
In Australia, Rio Tinto Ltd (ASX:RIO) will release its first quarter results on Thursday along with gas giant Santos. This will be followed on Friday by mining giant BHP (ASX:BHP) Group Ltd (LSE:BHP, ASX:BHP)’s quarterly as well as quarterlies from Whitehaven Coal (ASX:WHC) Ltd and Australia’s biggest listed energy player, Woodside Energy Group Ltd (ASX:WDS, LSE:WDS, OTC:WOPEF).
Investors will also be keeping a keen eye on inflation figures from New Zealand, Malaysia, Canada and the Eurozone.
Looking at China as WA Premier Mark McGowan heads over there, it will release its monetary policy stance on Monday and data on the strength of its economy on Tuesday.
We are likely to see Chinese GDP figures show a sharp acceleration in growth as it now emerges from the damage caused by its lengthy lockdowns.
Analysts polled by AFP expect an average of 3.8% year-on-year growth in the period from January through March.
“The recovery is real, but still in its early stage,” Larry Hu, chief China economist at the investment bank Macquarie, said.
Hu said a rebound “will be gradual, largely due to the weak confidence” of consumers, which in turn makes companies “reluctant” to hire more staff.
Here’s what we saw (source Commsec):
- European sharemarkets firmed on Friday. Upbeat earnings results from US banks drove the European banks index higher by 3.0%.
- Shares in luxury retailer Hermes rose 1.5% to a new record high after the firm's first-quarter sales beat market expectations.
- The continent-wide FTSEurofirst 300 index rose by 0.5% and the UK FTSE 100 index rose by 0.4%.
- The blue-chip STOXX 50 index rose 0.6% to 22-year highs.
- US sharemarkets fell by around 0.4% on Friday.
- Investors booked profits at the end of the week. US bank earnings beat market expectations.
- Economic data was mixed. After releasing earnings, shares in Citigroup rose 4.8%; JP MorganChase rose 7.6%; but Wells Fargo eased 0.1%.
- Seven of the 11 S&P 500 sectors ended lower led by real estate. Financial markets have priced in a 74% chance of a rate hike at the next meeting on May 2-3.
- The Dow Jones index fell by 143 points or 0.4%.
- The S&P 500 index fell by 0.2%.
- The Nasdaq index lost 43 points or 0.4%.
- Over the week the Dow rose 1.2%; the S&P 500 rose 0.8%; and the Nasdaq lifted 0.3%.
- Major currencies were weaker against the US dollar in European and US trade. The Euro fell from near US$1.1075 to US$1.0970 and was near US$1.1000 at the US close.
- The Aussie dollar fell from near US67.90 cents to US66.95 cents and was near US67.08 cents at the US close. And the Japanese yen eased from near 132.20 yen per US dollar to JPY133.80 and was near JPY133.77 at the US close.
- Global oil prices rose around 0.3% on Friday. In its monthly report, the International Energy Agency said world oil demand could grow by 2 million barrels per day in 2023 to a record 101.9 million bpd.
- The Brent crude oil price rose by US22 cents or 0.3% to US$86.31 a barrel.
- The US Nymex crude oil price rose by US36 cents or 0.4% to US$82.52 a barrel. Over the week Brent rose by US$1.19 or 1.4%. Nymex rose US$1.82 or 2.3%.
- Base metal prices were mixed on Friday. The copper futures price fell by 0.4% while aluminium futures rose by 0.6%. Over the week metals rose by 2.5-6.0% with copper up the least and nickel up the most.
- The gold futures price fell by US$39.50 or 1.9% to US$2,015.80 an ounce. Spot gold was trading near US$2,003 an ounce at the US close. Over the week gold rose US$3.90 or 0.2%.
- Iron ore futures fell by US58 cents or 0.5% to US$119.92 a tonne. Over the week iron ore fell by 5 cents.