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Australian shares looked set to start a new week little changed as a recovery in the dollar and declines in key commodities offset gains on Wall Street.

ASX futures eased three points or 0.04 per cent, signalling a flat start following Friday’s 61-point rebound on the S&P/ASX 200.

Big Tech steered Wall Street to solid gains on Friday. The Australian dollar recovered from one-month lows. Iron ore and oil declined.   

A busy schedule of annual general meetings this week includes updates from some of the biggest names in Australian tech, including Afterpay, Altium and WiseTech. 

Wall Street

US stocks rallied, but fell short of reversing losses earlier in the week triggered by worries over inflation. Technology outperformed as investors favoured growth stocks over value sectors.  

The S&P 500 climbed 34 points or 0.72 per cent. The Dow Jones Industrial Average gained 179 points or 0.5 per cent. The Nasdaq Composite put on 157 points or 1 per cent.

A mid-week slump sealed the S&P 500’s first losing week in six. The broadest of the major indices lost around 0.3 per cent. The Dow shed 0.6 per cent and the Nasdaq 0.7 per cent.

Investors took in their stride evidence Americans were increasingly worried about surging inflation. The University of Michigan’s consumer sentiment index sank to a decade-low as rising prices cut into incomes. The index declined to 66.8 this month from 71.7 in October. The last time Americans were this pessimistic was during the recovery from the Great Financial Crisis.

“One-in-four consumers cited inflationary reductions in their living standards in November, with lower income and older consumers voicing the greatest impact,” Richard Curtin, the survey’s director, said.

A record number quitting their jobs suggested strong pressure on companies to raise wages. The Labor Department reported 4.4 million Americans left their jobs in September.

“The quits number continues to move higher, which tells us that people are still confident that they can get higher-paying jobs,” Victoria Fernandez, chief market strategist of Crossmark Global Investments, told CNBC.

Big Tech provided much of Friday’s momentum. Microsoft, Apple, Alphabet, Meta Platforms (formerly Facebook) and Amazon all gained at least 1.3 per cent. Chip stocks also advanced. Small caps declined.

Tesla fell 2.83 per cent as Elon Musk continued to offload shares. The electric car maker declined more than 15 per cent last week from record levels. Johnson & Johnson firmed 1.2 per cent after announcing plans to split the company in two.

Australian outlook

A muted start looks likely, with futures traders apparently deciding the market front-ran Friday’s US gains. The S&P/ASX 200 bounced 61 points or 0.82 per cent on the last session of the week to reverse all but 14 points of last week’s four-session losing run.

The rebound brought the index back into the 7440-7480 area that has hardened into a resistance zone. The benchmark has had several pushes towards 7500 over the last few weeks, but each time has pulled up short, closing no higher than 7477.

The dollar rallied off one-month lows on Friday, rising around 0.5 per cent to 73.33 US cents. BHP and Rio Tinto declined in  US and European trade as iron ore unwound Thursday’s relief rally.

Nine of eleven US sectors advanced, led by communication services (Facebook, Google) +1.68 per cent, technology +1.19 per cent and industrials +0.81 per cent. Materials gained 0.71 per cent. Financials inched up 0.18 per cent.

Energy stocks dipped 0.26 per cent. Utilities shed 0.18 per cent.

Any surprises in China‘s monthly economic update at 1pm AEDT will have an effect on how today’s session plays out. Economists anticipate slowdowns in growth in industrial production, retail sales and asset investment. The question is by how much.

A busy week for the Reserve Bank starts with testimony today by Assistant Governor Luci Ellis before a House committee. Governor Philip Lowe is scheduled to deliver a speech on inflation tomorrow. Also tomorrow, the release of the minutes from this month’s policy meeting. Ellis addresses an online event on Thursday.

Elsewhere on the economic calendar this week: weekly consumer confidence (Tuesday); wages data (Wednesday); and labour force figures (Thursday).

In the US, earnings updates from retailers are likely to set the tone. Among those reporting this week are Walmart, Home Depot, Target, Macy’s, Kohl’s and Tyson Foods. Updates from Nvidia and Cisco Systems are also ahead. 

Back home, the annual general meeting season gets back underway tomorrow with updates from Mirvac, Pilbara Minerals and Lifestyle Communities. Wednesday brings meetings for shareholders in Afterpay, SEEK, Seven Group, Cromwell Property, A2 Milk, Platinum Asset Management and Liberty Financial Group.

Thursday: Goodman Group, Sonic Healthcare, Altium, BlueScope Steel, Western Areas, IGO, Northern Star, Mineral Resources, New Hope, AMA Group, Virtus Health, Cettire, Medibank and Freedom Foods. Friday: WiseTech, NextDC, Nanosonics, PEXA and Monash IVF Group (source: ASA).

IPOs: a full week ahead. First cab off the rank is Evolution Energy Minerals tomorrow. The rest of the week currently looks like this: Kalgoorlie Gold Mining, Lycaon Resources, My Rewards International (Wednesday); Tissue Repair, Parabellum Resources (Thursday); and Ventia Services Group, Cadence Opportunities Fund and Cooper Metals (Friday).

Commodities

Spot iron ore sank back under US$90 a tonne to seal a fifth straight losing week. The spot price for ore landed at Tianjin dropped US$4.45 or 4.7 per cent to US$89.75 a tonne, unwinding a rebound on Thursday after Evergrande averted a default on its debt. For the week, ore lost US$3 or 3.2 per cent.

BHP and Rio Tinto turned lower in overseas trade. BHP’s US-listed stock fell 0.98 per cent and its UK-listed stock shed 0.72 per cent. Rio Tinto gave up 1.05 per cent in the US and 0.75 per cent in the UK.

Gold sealed its best week since May with a seventh straight rise, supported by hedging over inflation. Gold for December delivery settled US$4.60 or 0.3 per cent ahead at US$1,868.50 an ounce. The NYSE Arca Gold Bugs Index added 0.64 per cent.

The yellow metal’s seven-session win streak is the longest since July 2020. Prices gained almost 2.9 per cent last week.

Colin Cieszynski, chief market strategist at SIA Wealth Management, told MarketWatch gold, silver and platinum “all staged big breakout rallies [last week], as their role as a store of value and a hedge against rising inflation came to the forefront, after both the U.S. and China reported inflation pressures increasing even more than expected.”

Oil retreated as the US continued to use the threat of releasing strategic reserves as a tool to contain soaring prices. White House press secretary Jen Psaki said the US would examine “every tool in our arsenal”. Brent crude settled 70 US cents or 0.8 per cent lower at US$82.17 a barrel.

LNG prices in the US extended their loss for the week beyond 13 per cent with a fall of almost 7 per cent on Friday to US$4.791 per million British thermal units.

Copper extended Thursday’s rebound. December copper firmed 1.1 per cent on Comex to US$4.45 a pound.

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