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Australian shares look likely to open little changed ahead of a big week of corporate earnings.
ASX SPI200 index futures edged up seven points or 0.1 per cent to 6962 despite a soft end to the week on Wall Street. A four-day rally in the US gave way to end-of-week profit taking as strong jobs data boosted the dollar. The falls mirrored weakness here on Friday when the ASX 200 eased 27 points or 0.4 per cent.
Australian exporters may find support in a softening dollar after the US jobs report lit a fire under the greenback, pushing the Aussie down to an 11-year-low. The Aussie opened this morning at 66.71 US cents, around its lowest level since 2009.
The tumbling dollar adds another variable as the interim company reporting season gets into full swing this week. Updates are due today from retailer JB Hi-Fi, property investor GPT Group and rail freight operator Aurizon. The rest of the week brings reports from: Suncorp and Beach Energy (tomorrow); Commonwealth Bank, CSL, IAG and Transurban (Wednesday); and National Australia Bank, Telstra, AMP, AGL, Newcrest and Woodside (Thursday).
US stocks retreated from record levels despite another knockout jobs report. The S&P 500 gave back 18 points or 0.54 per cent but still finished 3.2 per cent ahead for a week when Wall Street shrugged off concerns about the spread of the coronavirus. The rise was the index’s best weekly return in eight months.
The Nasdaq trimmed its tally for the week to 4 per cent after easing 52 points or 0.54 per cent. A fall of 277 points or 0.94 per cent reduced the Dow’s weekly gain to 3 per cent.
Wall Street built steadily during the week as several economic reports signalled a strong January jobs report was coming. So it proved, with Friday’s update revealing the economy created 225,000 jobs last month, comfortably above the 165,000 economists expected. Wage growth remained well contained. The jobless rate ticked up a notch to 3.6 per cent from a 50-year low of 3.5 per cent, but even that was seen as a positive, with more people entering the workforce.
China reported yesterday that the death toll from the coronavirus has reached 811, passing the number killed by the SARS outbreak in 2002-03. More than 37,000 cases have been confirmed in China, most around the Hubei province where the virus originated.
Tech and materials were Wall Street’s worst performers. Miners fell as commodity prices were pressured by the surging US dollar. BHP’s US-listed stock declined 2.78 per cent and its UK-listed stock 2.74 per cent. Rio Tinto shed 2.98 per cent in the US and 2.41 per cent in the UK. The spot price for iron ore landed in China edged up 50 cents or 0.6 per cent to $US82.65 a dry ton.
Oil sealed a fifth straight losing week with further weakness on Friday. Brent crude settled 46 cents or 0.8 per cent lower at $US54.47 a barrel. The international benchmark gave up 3.8 per cent last week, according to Dow Jones Market Data.
Industrial metals declined as gains in the greenback raised the prices of dollar-denominated commodities for holders of other currencies. Benchmark copper on the London Metal Exchange declined 1.3 per cent to $US5,648.25 a tonne. Aluminium lost 0.8 per cent, nickel 2.2 per cent, lead 1.8 per cent, zinc 3.1 per cent and tin 3.1 per cent.
Gold held up well in the face of the strengthening dollar, as falls in risk assets encouraged some haven buying. Gold for April delivery settled $3.40 or 0.2 per cent ahead at $US1,573.40 an ounce.
A light economic calendar this week gives the spotlight to corporate earnings. Business confidence figures are due tomorrow, and consumer sentiment on Wednesday. Today’s only potential mood-changer looks to be the January inflation update from China at 12.30 pm EST. Wall Street also has a slow start to the week, with no major reports scheduled tonight.
