US tech giants due to report earnings this week: ASX to edge higher

Market Reports

by Melissa Darmawan

The Australian share market is to edge higher this morning. Wall St closed mostly lower over the week despite its bounce back on Friday. Investors mulled on the news of President Biden proposing an increase in capital gains tax by almost double for high income earners amid the jitters of the growing number of coronavirus cases globally. Across the Atlantic, European markets followed the weak lead from the US closing almost lower with its counterpart in Japan closing in the red. Back home, the Australian share market on Friday closed higher led by Financials, Telecommunications and Materials. Its performance over the week saw the index slip into the red breaking its four week winning streak. On the commodities front, oil prices fell, gold mostly closed flat while the Aussie dollar remained unchanged against the falling greenback.

Figures from around the globe

Wall Street closed higher on Friday: The Dow Jones Industrial Average added 0.7 per cent to close at 34,043, the S&P 500 gained 1.1 per cent to 4,180 and the NASDAQ closed 1.4 per cent higher at 14,017.

European markets closed mostly lower: London’s FTSE closed flat, Paris lost 0.2 per cent and Frankfurt closed 0.3 per cent lower.

Asian markets closed mixed, Nikkei lost 0.6 per cent, Hong Kong’s Hang Seng added 1.1 per cent and China’s Shanghai Composite closed 0.3 per cent higher on Friday.

Taking all of this into equation, the SPI futures are pointing 0.1 per cent gain.

On Friday, the Australian share market added 5 points or 0.1 per cent to close at 7,061.

Local economic outlook

The week starts off on Tuesday with the Weekly Consumer Sentiment from ANZ-Roy Morgan. On Wednesday, eyes will be on the Consumer Price Index report released by the Australian Bureau of Statistics for the March quarter. Westpac economists are forecasting a 1.0 per cent lift which will see the annual growth rate rise from 0.5 to 1.5 per cent. Also on Wednesday there are two other reports coming out which are the Weekly Payroll Jobs and Wages report for week ending 10 April and the Preliminary International Trade figures for March by the ABS . On Thursday, International Trade Price Indexes for export and import prices are scheduled by the ABS. On Friday the Australian Bureau of Statistics is set to release the Business Conditions & Sentiments report.

US economic outlook

The earnings season ramps up this week the likes of Apple, Facebook, Microsoft, eBay, Starbucks and Amazon to release their quarterly performance figures. On Thursday, the central bank will meet to decide on monetary policy with the first quarter GDP figures scheduled to be released followed by jobless claims data.

Broker moves

Macquarie rates Evolution Mining (ASX:EVN) as a neutral from outperform with a price target of $4.80. The downgrade last Friday followed the company posting a weak March quarter with production down 9 per cent on the broker’s forecast with costs up 18 per cent. Red Lake mine in Canada continued to perform above expectation but their Queensland mine in Mt Rawdon was impacted by heavy rain. The broker says that the company’s guidance for FY21 implies a strong end to the year with higher copper credits driving a reduction in overall cost guidance. The studies at the Cowal gold operation west of Sydney plus their Red Lake mine could provide upside but the broker's expectation of a lower gold price could weigh on this. Shares in Evolution Mining closed 1.04 per cent lower at $4.78 on Friday.

IPOs

There are five companies scheduled to ring the bell this week on the ASX. Keep an eye out tomorrow for car dealership company Peter Warren Automotive (ASX:PWR) Holdings One. On Wednesday, Australasian Gold (ASX:A8G) and mining exploration company Black Canyon (ASX:BCA) are pencilled in on Wednesday. Lastly two companies on Friday, Albion Resources (ASX:ALB) and Metal Tiger (ASX:MTR).

Currencies

One Australian Dollar at 8:00 AM was buying 77.53 US cents, 55.83 Pence Sterling, 83.64 Yen and 64.08 Euro cents.

Commodities

Iron Ore has gained 1.4 per cent to US$186.25.
Iron Ore futures suggest a 2.87% per cent gain.

Gold has lost $4.20 to US$1778 an ounce.
Silver has fallen $0.10 US$26.11 an ounce.
Oil has added $0.71 to US$62.14 a barrel.