The ASX will start the week lower, despite the S&P 500 hitting another fresh all-time high thanks to bumper earnings from megacap tech stocks.
ASX 200 futures are trading 54 points lower, down -0.71% as of 8:30 am AEDT.
Last week, the ASX200 closed 1.91% higher at 7,699.4, fuelled by cooler-than-expected Q4 inflation in Australia, solid US earnings results and key central banks suggesting their next move would be rate cuts.
All 11 sectors closed higher last week, led by Real Estate up 6.06, Energy up 3.80% and IT which was 2.97% to the green. Utilities (+0.80%), Industrials (+1.06%) and Materials (+1.13%) underperformed relative to the index.
“This week’s key economic event in Australia will be Tuesday's RBA Board Meeting," IG Markets analyst Tony Sycamore said.
"A run of cooler data in recent months indicates that the RBA’s 13 rate hikes between May 2022 and November 23 are having the desired effect and will see the RBA keep rates on hold this month at 4.35%.
"While it’s too early for the RBA to perform a dovish pivot, we expect two rate cuts in the second half of 2024, which will take the cash rate back to 3.85%,”
What happened last week?
Here’s what we saw (source Commsec)
US markets
Rose sharply on Friday as strong company earnings and a hotter-than-expected January jobs report boosted confidence in the US economy, even while lowering the likelihood that the US Federal Reserve will cut interest rates any time soon.
Facebook (NASDAQ:META) parent Meta Platforms surged 20.3% to a record high after issuing its first dividend and announcing a US$50 billion share buyback program. Amazon (NASDAQ:AMZN) jumped 7.9% following a fourth-quarter revenue beat as new generative artificial intelligence features in cloud and e-commerce businesses spurred robust growth.
Apple (NASDAQ:AAPL) trimmed its slide to 0.5% as investors looked past a deepening slump in its China business. Oil supermajor Chevron (NYSE:CVX) gained 2.9% after beating analyst estimates.
- The Dow Jones index rose by 135 points or 0.4% and the S&P 500 index gained 1.1%, both closing at record highs.
- The Nasdaq index lifted 267 points or 1.7%.
- For the week, the Dow and the S&P 500 both lifted 1.4% and the Nasdaq added 1.1%.
It was the fourth week in a row of gains for the major benchmarks.
European markets
Were little changed on Friday. Autos added 1.1% to lead gains while oil and gas stocks fell by 1.4%.
BP (LON:BP) dipped 1.5% after the oil giant shut its biggest hydrocarbon refinery in the US Midwest region. But Danske Bank jumped 8.1% after the Danish lender reported fourth-quarter results and announced a share buyback program.
- The continent-wide FTSEurofirst 300 index ended flat but edged up 0.1% over the week.
- In London, the UK FTSE 100 index dipped 0.1%, logging a 0.3% weekly loss.
Currencies
Were weaker against the US dollar in European and US trade.
- The Euro fell from US$1.0896 to US$1.0779 and was near US$1.0785 at the US close.
- The Aussie dollar dipped from US66.09 cents to US65.02 cents and was near US65.10 cents at the US close.
- The Japanese yen slid from 146.36 yen per US dollar to JPY148.55 and was near JPY148.35 at the US close.
Commodities
Global oil prices fell around 2% on Friday and posted weekly losses after US jobs data shrank the odds of imminent interest rate cuts in the world's largest economy, which could dampen crude demand.
- The Brent crude price fell by US$1.37 or 1.7% to US$77.33 a barrel.
- The US Nymex crude price slid US$1.54 or 2.1% to $72.28 a barrel.
- Crude lost over 7% on the week.
Base metal prices fell on Friday as the US dollar strengthened.
What about small caps?
The S&P/ASX Small Ordinaries closed 1.95% higher to 2,972,30 on Friday. It was 2.47% higher for the week.
It has been a solid start on the news front today. You can read about the following and more throughout the day.