The Australian sharemarket is expected to open lower this week, as traders prepare for a critical week of earnings reports from major US companies. Market participants are keen to see if results from firms such as Intel and Tesla can sustain the recent bull run. S&P/ASX 200 Index futures indicate a weaker start, down 8 points, or 0.1 per cent, to 9002, extending Friday’s modest sell-off. The local bourse had previously hit record highs.
US markets presented a mixed picture, with the S&P 500 Index closing 0.5 per cent higher on Friday and the Nasdaq 100 gaining 0.7 per cent. Attention is now focused on the second week of the US earnings season, with key reports due from Coca-Cola and Netflix on Wednesday, followed by Tesla and IBM on Thursday, and Intel and Ford on Friday. TSMC experienced a 1.6 per cent dip in New York trading despite raising its revenue growth forecast for the second time this year, highlighting concerns about stretched valuations.
Meanwhile, precious metals experienced a downturn, with gold falling 1.7 per cent and silver sinking 6 per cent on the last day of trading. Despite this, Australian gold mining company Newmont has seen its stock price increase nearly 150 percent this year. Demand for gold remains strong, driven by central bank buying and inflows to exchange-traded funds.
Domestically, Reserve Bank of Australia (RBA) governor Michele Bullock is scheduled to speak on Friday in Sydney, following a recent labour force report showing a rise in the jobless rate to 4.5 per cent. This has increased expectations of a potential RBA rate cut at the next board meeting. Money markets are currently pricing in a roughly 70 per cent chance of the RBA lowering the cash rate by a quarter of a percentage point.
