ASX Today: ASX caps off worst week since GFC with more losses
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The share market looks set to open a potentially volatile week with slender gains following a mixed finish on Wall Street.

Australian index futures edged up 18 points or 0.3 per cent ahead of a week likely to be dominated by US politics in the run-up to next Tuesday's presidential election.

Wall Street

US stocks closed mixed and little changed on Friday as investors awaited clarity on the prospects for a pre-election stimulus package. The S&P 500 overcame mid-session losses to finish 12 points or 0.34 per cent ahead. The Nasdaq Composite gained 42 points or 0.37 per cent. The Dow Jones Industrial Average eased 28 points or 0.1 per cent following a 10.6 per cent dive in Intel after the PC chipmaker missed revenue expectations.

Friday's lacklustre showing sealed weekly losses for all three benchmarks. The S&P 500 shed 0.5 per cent, the Dow almost 1 per cent and the Nasdaq 1.1 per cent.

“I think everyone is in wait-and-see mode,” Mike Katz, partner at Seven Points Capital, told CNBC. “There’s a lot of back and forth on stimulus and every headline makes the market move a little bit, but there’s no follow-through because we don’t have a clear picture on that front.”

A third of S&P 500 companies are due to report quarterly earnings this week, including tech giants Apple, Microsoft, Amazon and Facebook, and Dow heavyweights Boeing and Caterpillar. But a market addicted to stimulus appears likely to pay more attention to negotiations in Washington and the possibility of a "blue wave" next Tuesday (a Democrat sweep).

“The market is going to focus on the state of stimulus. It’s going to focus on whether the polls are tightening or widening with regard to the probability of having an unclear outcome, contested outcome or both,” Julian Emanuel, head of equities and derivative strategy at BTIG in the US, said.

The market appeared largely oblivious to a rise in coronavirus cases in the US and Europe last week, but may pay more attention following a record-breaking number of new US infections reported over the weekend. The US recorded more than 80,000 cases on both Friday and Saturday, surpassing the previous high of 77,300 in mid-July.  

Australian outlook

With Election Day in the US just eight days away, domestic matters seem likely to take a back seat for a second week. The S&P/ASX 200 eased 0.2 per cent last week as the sugar hit from the Federal Budget faded and the market fell back into lockstep with Wall Street. 

There is little on the domestic calendar this week to divert attention from the US. Wednesday's quarterly inflation report may firm up the argument for a cut to the cash rate next month if it shows inflation did not rebound as much as economists expected as the economy re-opened.

Sector analysis of Friday's US action offers few leads for the day ahead. Communication services (+1.1 per cent) and consumer discretionary (+0.9 per cent) were the best performers. Energy stocks declined 0.6 per cent. The tech sector retreated 0.1 per cent, mainly due to the response to Intel's earnings report.

The dollar started the week on the upswing, rising 0.06 per cent to 71.37 US cents.


The nation's most important export, iron ore, dropped sharply on Friday. The spot price for ore landed in China dived $4.20 or 3.5 per cent to US$15.55 a tonne to seal a weekly loss of $3.50 or 2.9 per cent. BHP's US-listed stock turned lower with the falling price, shedding 0.66 per cent after its UK-listed stock gained 0.34 per cent. Rio Tinto gave up 0.5 per cent in the US after adding 0.69 per cent in the UK.

The resumption of exports from Libya helped drag oil lower. Libya's National Oil Corporation lifted 'force majeure' on its major ports, signalling a return to shipping following an eight-month blockade. Brent crude settled 69 cents or 1.6 per cent in the red at US$41.77 a barrel. The US benchmark closed below US$40 a barrel for the first time in almost three weeks at US$39.85.

US gold stocks dipped as the yellow metal settled barely changed. Gold for December delivery finished 60 cents or less than 0.1 per cent ahead at US$1,905.20 an ounce after trading as high as US$1,917.30 and as low as US$1,895.20. The NYSE Arca Gold Bugs Index eased 0.7 per cent.

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