The Australian sharemarket is set to open higher on Monday, with ASX futures pointing to a gain of 33 points, or 0.4%, as investors take their lead from record highs on Wall Street and stronger gold and oil prices.
Attention will also turn to the Reserve Bank of Australia (RBA), which meets on Tuesday to decide on interest rates, while the domestic reporting season gathers pace.
CAR Group is due to report today, followed by Commonwealth Bank of Australia (ASX:CBA) and Seek on Wednesday.
ASX ends week just below record
The Australian sharemarket finished Friday slightly below the record close reached a day earlier, with weakness across the major banks offsetting gains in technology and gold stocks.
The S&P/ASX 200 slipped 8 points to 9,263.6, while the Australian dollar was steady around US70.35 cents.
Gold miners were among the strongest performers as bullion held above US$4,200 an ounce during the session.
Dual-listed Newmont Corporation (NYSE:NEM, TSX:NGT, ASX:NEM, XETRA:NMM) rose 2.68% and Northern Star Resources added 2.3%, although Evolution Mining fell 3.08%.
The major diversified miners were mixed. BHP was broadly steady and Rio Tinto edged higher, while Fortescue lost 2.33% as iron ore prices weakened.
BHP and Rio Tinto executives have reportedly been invited to meet US President Donald Trump at the White House over the weekend as the administration looks to reduce US dependence on supply chains dominated by China.
Financial stocks weighed on the index, with all 4 major banks finishing lower.
Commonwealth Bank fell 1.03%, National Australia Bank declined 1.1%, Westpac dropped 1.56% and ANZ gave up 1%.
Energy stocks advanced as oil prices rose following reports Iran had attacked “hostile targets” in the Strait of Hormuz and was seeking to restrict US shipping through the key waterway as part of negotiations involving Oman.
Woodside Energy and Santos both finished modestly higher.
Technology stocks were mixed, although several major names recorded strong gains. WiseTech Global jumped 4.27%, Xero rose 1.47% and TechnologyOne added 0.61%, while NEXTDC (ASX:NXT) declined 1.47%.
Wall Street closes at record high
US sharemarkets advanced on Friday after weaker-than-expected employment data reduced expectations that the Federal Reserve would raise interest rates at its September meeting.
The Dow Jones Industrial Average gained 0.3%, the S&P 500 rose 0.6% to a record close and the Nasdaq climbed 1.3%.
US nonfarm payrolls fell by 23,000 jobs in July, well below market expectations, while employment gains for the previous 2 months were revised sharply lower.
The unemployment rate eased to 4.1% from 4.2% in June.
Expectations for a Federal Reserve rate increase at its next meeting fell to around 44%, according to CME FedWatch, from about 55% in the previous session.
Technology and growth stocks led the market higher.
SpaceX surged 16% following the expiry of the first of several share lock-up restrictions linked to its June public offering.
Atlassian (NASDAQ:TEAM) soared 35% in its largest-ever 1-day percentage gain after forecasting quarterly revenue above market expectations.
Microchip Technology jumped 14%, recording its strongest daily performance in more than 15 months, after also issuing a stronger-than-expected revenue outlook.
Airbnb gained 17% after second-quarter revenue beat forecasts, making it the strongest performer in the S&P 500.
The Trade Desk moved sharply in the opposite direction, falling 22% after forecasting third-quarter revenue below expectations.
US government bond yields declined following the employment report. The 10-year Treasury yield fell 1 basis point to 4.66%, while the 2-year yield dropped 4 basis points to 4.20%.
European markets extend record run
European sharemarkets rallied to a fourth consecutive record close on Friday, supported by technology stocks, positive company earnings and the softer US employment data.
The continent-wide FTSEurofirst 300 index and the UK's FTSE 100 both finished 0.3% higher.
Technology stocks gained 1.9%, tracking strength on Wall Street, while healthcare stocks rose 1.2%.
Genmab climbed 6.5% after the cancer drugmaker reported higher first-half revenue and lifted its full-year outlook.
Novo Nordisk (NYSE:NVO) rose 3.9% and Abivax added 3.5%.
Building materials group Kingspan surged 18% after upgrading its profit forecast, citing strong demand associated with data centre development.
Currencies
Major currencies strengthened against the US dollar following the weaker employment data.
- The euro was trading at US$1.1561.
- The Japanese yen stood at ¥157.69 per US dollar.
- The Australian dollar strengthened to around US70.64 cents.
Commodities
Global oil prices rose as uncertainty continued around negotiations involving Iran.
Brent crude futures settled 1.3% higher at US$83.55 a barrel, while West Texas Intermediate remained above US$78 a barrel after gaining almost 3% in the previous session.
Gold futures reached a 7-week high as weaker US employment data reduced expectations for higher interest rates. Gold settled 2.3% higher at US$4,400 an ounce.
Base metals were weaker, with copper futures falling 1.8% following the US jobs report and aluminium slipping 0.2%.
Iron ore futures declined 0.9% to US$94.45 a tonne after Chinese iron ore imports fell, with weaker steelmaking margins weighing on demand for the commodity.
Looking ahead
In Australia, the RBA will announce its latest interest rate decision on Tuesday, while corporate earnings will remain in focus as reporting season accelerates.
CAR Group reports today, with Commonwealth Bank and Seek scheduled to release results on Wednesday.
In the US, July consumer price index data is due on Wednesday, followed by retail sales figures on Friday.
Rocket Lab is also scheduled to report earnings today.