S&P 500 notches up best week since November: Aus shares to edge higher

Market Reports

by Anna Napoli

The Aussie market is set to edge higher following a solid finish to the week on Wall Street. The S&P 500 hit another record high last week, up 4.7 per cent for the week to notch up its best 5 day run since early November. What seemed to lift Wall Street was disappointing jobs numbers which investors are hoping will help increase the chances of further stimulus. The US earnings season is also well underway, of the 184 companies that have reported earnings to date 84 per cent of them have already beaten analyst expectations. Uber, Lyft and Disney are all set to report this week. Back home this week the all eyes will be on developments with the fiscal stimulus out of the US. Luna new year will see Chinese markets closed for a week which could see the iron ore price staying relatively flat. If the local bourse can lift by 12 points we will hit the best levels in 11 months. Friday closed out the best end to a week for the Aussie market since September. There is no major eco news today and not too many companies with results to move the needle. But in coming days we will hear from the likes of Telstra, CBA and Newcrest Mining.

US Economic news

Labor Department

- US added 49 000 jobs in January
- Below ecconomists expectations of 50 000
- Unemployment rate fell to 6.3%
- Beating expectations of 6.7%

Local Economic news

The week kicks off on Tuesday with the weekly readings of consumer confidence and CBA credit and debit spending. The National Australia Bank (NAB) issues the January business survey with readings on confidence and activity levels. On Wednesday, Westpac and the Melbourne Institute release the February consumer confidence report. Also on Wednesday, the Australian Bureau of Statistics issues the regional or ‘small area’ data on building approvals for December.

Markets

Wall Street closed higher on Friday: The Dow Jones Industrial Average added 0.3 per cent to close at 31,148, the S&P 500 gained 0.4 per cent to close at 3887 and the NASDAQ closed 0.6 per cent higher at 13,856.

European markets closed mixed on Friday: London’s FTSE lost 0.2 per cent, Paris added 0.9 per cent and Frankfurt closed 0.03 per cent lower.

Asian markets closed mixed on Friday: Tokyo’s Nikkei gained 1.5 per cent, Hong Kong’s Hang Seng added 0.6 per cent and China’s Shanghai Composite closed 0.2 per cent lower.

Back home, the SPI futures are pointing to 0.1 per cent gain. On Friday, the Australian share market closed 1.1 per cent higher at 6841.

Broker moves

Macquarie has upgraded Wesfarmers to outperform from neutral. Macquarie believes 2021 is likely to see continued strength in consumer spending buoyed by high asset prices, high savings rates and improving confidence. Shares in Wesfarmers (ASX:WES) closed 1.16 per cent higher at $55.64 on Friday.

Ex-Dividends

Australian Foundation Investment (ASX:AFI) is paying 10 cents fully franked
Centrepoint Alliance (ASX:CAF) is paying 4 cent fully franked

Currencies

One Australian Dollar at 8:00 AM was buying 76.68 US cents, 55.89 Pence Sterling, 80.77 Yen and 63.69 Euro cents.

Commodities

Iron Ore has lost 0.6 per cent to US$157.01.
Iron Ore futures suggest a 0.8 per cent gain.
Gold was up $21.80 to US$1813 an ounce.
Silver has gained $0.79 to US$27.02 an ounce.
Oil was up $0.62 to US$56.85 a barrel.