We are likely to see a dip in trading this morning brought on by weak overseas leads and several companies trading ex-dividend.
Those companies include Fortescue Metals Group (ASX:FMG) Limited, which is expected to have a big impact on today’s move into the red, following a $2.11 per share payout. The mining giant’s shares are expected to drop by around 10%.
Others trading ex-dividend include Ramsay Health Care Limited (ASX:RHC), ASX Ltd (ASX:ASX), Northern Star Resources Ltd (ASX:NST) and Orora Ltd.
Oil majors and banks are also tipped to decline.
Here’s what you should know:
- SPI futures are pointing to a 0.3%, or 23 point, drop at the open,
- The Australian dollar is higher at US74.58c.
- The Brent crude price fell by US42 cents or 0.6% to US$72.61 a barrel on Friday. Over the week, Brent crude fell by US9 cents or 0.1%.
- Tin fell 1.5%
- Lead lost 0.8%.
- Nickel rose 1.6%
- Aluminium rose by 1.1%.
- Over the week, tin, lead and zinc fell by up to 2.4% while other metals rose by 4.1%, led by nickel.
Australian markets
The ASX200 finished the week with a gain, rising 37 points or 0.5% to 7,522.9 with mining companies and biotech firms halting a two-day slide.
However, as noted, we are looking at a slow start to the week.
We asked Wealth Within Chief Analyst and international bestselling author of How to Beat the Managed Funds by 20%, Dale Gillham, what happened in the market last week and what to expect next. Here’s what he had to say …
“The best performing sectors included Information Technology up over 2% followed by Communication Services and Energy, both up over 1%. The worst performing sectors included Utilities down over 2% followed by Consumer Discretionary and Healthcare, which were both down over 1%.
“The best performers in the ASX/S&P top 100 stocks included Alumina up over 11% followed by S32 up over 10% and NextDC up over 7%. The worst performing stocks included Altium down over 10% followed by Wesfarmers down over 7% while BHP Group and AGL Energy (ASX:AGK) were both down over 6%.”
What's next for Australian share market?
According to Gillham, “Last the Australian stock market almost repeated the trend of the prior week given that it traded up early in the week before turning down late. This is a reminder that it’s important to wait for confirmation of direction before making a decision.
“Previously, I indicated that while the market was technically bullish, it is searching for a two year high and if the All Ordinaries Index trades down this week, it may be starting its move down into the low that is expected in September or October.
“Technically, the market confirmed an up move last week, which may be a sign that the bulls have not finished with the current uptrend that started with the COVID low in March 2020. As I continue to say, we need confirmation that a move is unfolding before we react, as the market could easily start to trade down this week into the low. My advice right now is to wait until we have confirmation of a move in either direction and to remember that now is not the time to speculate.”
Looking ahead: the Reserve Bank holds its monthly board meeting on Tuesday, while consumer sentiment will also be closely watched.
Interesting fact: Total assets overseen by ethical investment funds on behalf of Australian investors leapt 30% in 2020 to be worth $1.28 trillion.
This accounts for 40 cents of every professionally managed dollar!
Australian indices
- ASX 200 lifted 0.50% to 7,522.90
- ASX24 futures slipped 0.3% to 7,483
- S&P/ASX Small Ordinaries rose 1.05% to 3,594.10.
- All Ordinaries was up 0.55% to 7,826.70.
US markets
Wall Street stocks finished the week mixed as the market took into account a potentially slower phasing down of monetary stimulus.
Just 235,000 jobs were added last month, far lower than expected and down on previous months.
The drag on hiring from COVID’s Delta variant is still having an impact with the leisure and hospitality sector the worst hit.
“The numbers came in softer than expected. On one side of the equation it is somewhat negative because it suggests the Delta variant is starting to restrain overall economic growth,” CommSec chief economist Craig James said.
“On the other hand it’s positive because it means the Fed won’t start paring back purchases of bonds, so stimulus will stay in place for a little longer.”
Despite the slowdown, the unemployment rate fell to a pandemic low of 5.2%.
Overall, there were no big swings at the end of the trading week, with Wall St closed on Monday for the Labor Day holiday.
US indices
- Dow Jones fell 0.2% to 35,369.09
- S&P 500 finished at 4,535.43
- Nasdaq rose 0.2% to 15,363.52
European markets
Euro markets also eased. The US jobs data also weighing the markets down, particularly with regard to retail and travel stocks.
European indices
- STOXX 600 fell 0.56% to 471.93
- German Dax fell 0.4% to 15,781.20
- UK FTSE fell 0.4% to 7,138.35