After an eventful weekend, local shares look set for an opening bounce when trading resumes this morning. While the US market finished flat on Friday evening, sentiment has been relatively strong in the wake of an election victory for Joe Biden, which looks set to be kept in check by the prospect of a split Congress.
Economic calendar and news
With the election fallout still likely to dominate financial markets for some time yet, investors may need to keep attuned to any developments that stem from court action or the like. There may also be renewed focus on what the economic outlook might look like under the Biden administration.
Nonetheless, in the meantime, the US Federal Reserve will maintain a strong presence in the week ahead, with a long list of the central bank’s representatives set to speak to various audiences. Outside of that, however, inflation data will be the main watch-point for economists, albeit expectations appear to be in alignment with last month’s readings.
Locally, investors will be digesting the latest figures relating to business confidence and consumer confidence. The latter has rebounded with strength across the last couple months, and with Melbourne’s lockdown now being wound back significantly, observers will be looking to gauge how much pent-up demand there is in discretionary sectors such as retail, travel and hospitality.
After the Reserve Bank of Australia cut interest rates last week to 0.1%, and also commenced a $100 billion round of quantitative easing, there may be further focus on these factors, which were overshadowed by last week’s election developments.
ASX major movers
Bank shares could hold some sway over the direction of the broader market this week, with three of the ‘Big Four’ trading ex-dividend this week. Given the weight that the banks hold over the ASX, price adjustments accounting for the dividends could slow the momentum of the market, albeit this year’s batch of dividends are markedly lower compared with prior periods.
First, ANZ (ASX: ANZ) is trading ex-dividend today, having declared a $0.35 fully-franked dividend that will be paid to shareholders on December 16. Next, Westpac (ASX: WBC) will follow suit, with its shares set to trade ex-dividend on Wednesday, offering a $0.31 dividend that will be paid on December 18. Finally, NAB (ASX: NAB) will round out the action on Thursday, paying the lowest dividend among the bunch, at $0.30 per share.
Gold shares finished on a high last week, with the price of the precious metal building towards the back-end of the week. That momentum carried through after the local market closed on Friday afternoon, with prices hovering around US$1950/oz. This could help ASX-listed gold miners and explorers start the week on a bright note.
Holding their annual general meetings this week are Sims (ASX: SGM), Breville Group (ASX: BRG), Nine Entertainment Co (ASX: NEC) and aerial imagery company Nearmap (ASX: NEA). In recent weeks there has been some volatility surrounding stocks that have updated investors at their respective annual general meetings, providing traders no shortage of opportunities.
Closing things out, there were multiple stocks that achieved new all-time highs last week, with the tech sector proving a particular point of focus for investors looking to capitalise on the upbeat sentiment across the market. Some of the high-profile names setting records last week included REA Group (ASX: REA), Xero (ASX: XRO) and NextDC (ASX: NXT), while there were also yearly highs for WiseTech Global (ASX: WTC) and Vocus (ASX: VOC).
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