The ASX is set to open flat this morning. ASX 200 futures are trading flat as of 8:20 am AEDT.
A slow start comes following a lower finish last week, which saw the ASX200 down 0.71% at 7,644.
While it was a shaky start to the week last week, near recent record highs ahead of earnings reports from companies including CSL, CBA, Telstra, Wesfarmers, Origin Energy and Whitehaven picked the index up.
Of the sectors, Health Care (1.32%), IT (0.91%), Financials (+0.73%) and Real Estate (+0.43%) led the way higher, while Energy (-3.44%), Materials (-3.03%), Consumer Staples (-1.73%) and Consumer Discretionary (-0.93%) were weakest.
The best-performing stocks last week were Zip (+30.94%), Novonix (+25.69%), Nick Scali (+21.66%) and Liontown Resources (ASX:LTR) (+14.36%).
Biggest losers were Silver Lake Resources (-15.42%), Deep Yellow ( -10.12%), Whitehaven Coal (-8.67%) and Santos (-7.34%).
This week, the markets are likely to be moved by a range of economic data.
“This week's key local economic event will be Thursday's employment data. Last month, the Australian economy lost a sizeable 65,100 jobs in December versus the 15,000 gain expected,” IG Markets analyst Tony Sycamore said.
“The unemployment rate remained unchanged at 3.9% due to a significant drop in the participation rate from 67.1% to 66.8%.
"This month, the market is looking for the economy to add 37,500 jobs and for the participation rate to increase to 66.9%. This would see the unemployment rate rise to 4.0%, the highest since February 2022 and keep intact our view for two 25bp rate cuts in 2024, the first in August.”
There is data in the US coming as well.
“This week's key economic events will be inflation data for January,” Sycamore said.
“Headline CPI is expected to rise by 0.2% MoM, allowing the annual rate to fall to 2.9% YoY from 3.4% prior. Core inflation is expected to increase by 0.3% MoM, which would see the annual rate of core inflation ease to 3.7% from 3.9% YoY.
"Earnings season continues with reports from companies including Coca-Cola, Airbnb, Lyft, Cisco, Robin Hood, AMD, Dropbox and Coinbase.”
What happened last week
Here’s what we saw (source Commsec):
US sharemarkets
Were mixed on Friday. The S&P 500 index closed above 5,000 for the first time and the Nasdaq index briefly traded above 16,000, with boosts from megacaps and chip stocks, as investors bet on artificial intelligence (AI) technology and eyed strong earnings reports. A revision lower in December’s US consumer price index also helped sentiment.
Nvidia gained 3.6% and hit a record high after Reuters reported it was building a new business unit focused on designing bespoke chips for cloud computing firms, including advanced AI processors.
Tech giants Microsoft, Amazon.com and Alphabet also contributed to index gains, up between 1.6% and 2.7%. But PepsiCo fell 3.6% after its fourth-quarter revenue fell short of market expectations as multiple price increases crimped demand for its juices and Lay's crisps. Expedia shed 17.8% after fourth-quarter bookings disappointed Wall Street.
- The Dow Jones index fell by 55 points or 0.1%.
- The S&P 500 index gained 0.6%.
- The Nasdaq index jumped 197 points or 1.3%.
- For the week, the S&P lifted 1.4%, while the Nasdaq gained 2.3%. The Dow finished flat.
European sharemarkets
Closed slightly lower on Friday. Tech stocks were 1.3% higher, while food and beverage dropped 1.8%.
L'Oreal slipped 7.6% after the French cosmetics company reported underwhelming fourth-quarter sales growth. But Hermes shares rose 4.8%, notching a record high after the Birkin bag maker said it would further raise prices as its sales outpaced luxury competitors at the end of 2023.
- The continent-wide FTSEurofirst 300 index dipped 0.1%, though logging a 0.2% advance for the week.
- In London, the UK FTSE 100 index fell by 0.3% and was down 0.6% over the week.
Currencies
Were stronger against the US dollar in European and US trade.
- The Euro rose from US$1.0761 to US$1.0794 and was near US$1.0780 at the US close.
- The Aussie dollar lifted from US64.89 cents to US65.32 cents and was near US65.25 cents at the US close.
- The Japanese yen firmed from 149.57 yen per US dollar to JPY149.06 and was near JPY149.30 at the US close.
Commodities
Global oil prices settled higher on Friday, up over 6% on a week-on-week basis, as worries about supply from the Middle East mounted and as reining outages tightened refined products markets.
- The Brent crude price rose by US56 cents or 0.7% to US$82.19 a barrel.
- The US Nymex crude price gained US62 cents or 0.8% to US$76.84 a barrel.
Base metal prices fell on Friday.
- Copper futures slid 0.5% to near three-month lows as US speculators unleashed bearish bets despite news that China had bolstered its economy with financing measures. Aluminium futures dropped 0.4%. For the week, copper lost 3.5% with aluminium down 0.7%.
- The gold futures price fell by US$9.20 or 0.4% to U$2,038.70 an ounce on Friday, pressured by elevated US Treasury yields.
- Spot gold was trading near US$2,024 an ounce at the US close.
- Bullion fell 0.7% over the week.
- Iron ore futures dipped US32 cents or 0.2% to US$128.75 a tonne on Friday as trading activity slowed to a crawl ahead of China’s lunar new year break. The steel-making ingredient was up just 0.1% over the week.
JB Hi-Fi beats estimates
"JB Hi-Fi beat profit and sales estimates today as the household retailer continues to show resilience despite a pullback in consumer spending but the bad news is that profits fell by 20% from the same period a year ago,” eToro market analyst Josh Gilbert says.
“As a result, JB Hi-Fi cut its dividend to A$1.58 from AU$1.97, which may not come as a surprise but will disappoint some shareholders, given that the cut was more significant than expected.
“There are some positives for investors to take away, though. Sales have topped estimates amidst a tricky environment for retailers, and we didn’t see a sharp slowdown in sales in January that many had expected. Profits have slipped, but this was always to be expected.
“These results won’t blow the market away and investors should know that it will be a challenging end to the fiscal year for JB as retail sales slow further, with decade-high interest rates continuing to take their toll on households.
"However, management has shown they can navigate tough periods and coming interest rate cuts as early as June will remain a positive tailwind."
On the small cap front
The S&P/ASX Small Ordinaries (XSO) fell 0.25% on Friday to 2,960.60. The index lost 0.39% over the week.
There has been a steady flow of news this morning. You can read about the following and more throughout the day.
- Far East Gold Ltd (ASX:FEG, OTC:FEGDF) has mobilised a drill rig to start a new phase of scout drilling at its Woyla Copper-Gold Project. This new phase of scout drilling is being carried out at the Victory vein at the highly prospective and previously undrilled Aloe Rek prospect area.
- Alkane Resources Ltd (ASX:ALK, OTC:ALKEF) has released more results from its drilling program at the Northern Molong Porphyry Project in Central New South Wales. The current program extends over three kilometres from Kaiser to Boda and down to Boda 2-3. The company believes this system has the potential to be a large, tier-one gold-copper project.
- Iondrive Ltd (ASX:ION) has appointed Dr Ebbe Dommisse as its new chief executive officer. The appointment builds upon Dr Dommisse’s early success with progressing the pre-feasibility study for the company’s lithium battery recycling technology.
- Infinity Lithium Corporation Ltd (ASX:INF) has lodged an Exploitation Concession Application (ECA) at the San José Lithium Project with the Regional Government of Extremadura and its Dirección General de Industria, Energía y Minas (Mines Department). The ECA submission for the fully integrated project includes the rights to mine lithium at San José and the accompanying on-site lithium chemical conversion.
- Volt Resources Ltd (ASX:VRC, OTC:VLTRF) announced the US Department of Energy's (DOE) approval of Concept Paper for the 'Integrated Production of Natural Graphite Anode via Innovative Process' for much larger non-dilutive funding of over US$100 million. The above is in addition to the DOE’s previous approval of US$ 1.0 million non-dilutive funding announced on February 7, 2024, by Volt for review of Concept Paper on Critical Materials project.