Monday Market Minutes: Futures Hinting at Softer Start

By Glenn Dyer | More Articles by Glenn Dyer

There’s a soft start ahead for the ASX at the start of the final week of February and the December half and full year reporting season.

The pointers from offshore on Friday were mixed as the Aussie dollar crunched the 78 US cent level and headed for 79 US cents.

While Eurozone shares gained 0.9% on Friday, on Wall Street the S&P 500 gave up early gains to end down 0.2% as bond yields continued to rise on more silly fears about inflation.

In line with the soft US lead ASX 200 futures fell 11 points, or 0.2%, pointing to a weak start for the ASX today.

After last Friday’s 1.3% loss and 0.2% loss for the week, today’s start will not inspire, especially as the earnings mix is likely to be less convincing than the resources dominated reporting last week.

Results from Woolworths and Harvey Norman are likely to be good, but investors are now watching for outlook and guidance statements (where the companies are game enough to issue them) after Coles’ realistic warning of a slowdown in sales growth and weaker earnings over the next year.

On Wall Street the Dow edged up 0.98 points, or 0%, to end the week at 31,494.32 and the Nasdaq added 9.11 points, or 0.07%, to 13,874.46. The S&P 500 dipped 7.26 points, or 0.19%, to 3,906.71.

For the week the Dow hit an intraday all time high on Friday, then sagged and ending up losing 1% by Friday’s close; the S&P 500 fell 0.7% and Nasdaq dropped 1.6% as investors rotated out of big stay at home stocks like Apple, Microsoft, Netflix and Amazon.

For the week, Eurozone shares gained 0.2%, Japanese shares rose 1.7% and Chinese shares fell -0.5%.

Australian shares were boosted early in the week to their highest level in nearly a year by strong earnings, but reversed course to end the week down 0.2% as concerns around rising bond yields weighed with the week seeing sharp falls in utility, consumer staples, real estate, industrial and energy stocks.

Bond yields rose further with the 10 year yield finishing at 1.43%.

Copper rose strongly to new near decade highs, iron ore rose over an interrupted week and oil and gold prices weakened.

 

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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