The local stock market looks set for a flat start to the week, coming off the back of the ASX’s best weekly performance since April this year. Investor sentiment is likely to be shaped by September’s local jobs data, as well as political and economic events out of the US. This includes the latest readings into the upcoming US presidential election, and negotiations surrounding a stimulus injection into the world’s largest economy.
Economic calendar and news
The latest Australian employment data will headline the local economic calendar this week. After a surprise fall in the unemployment rate to 6.8% when data was published last month, expectations this time around suggest the rate is likely to drift higher amid an estimated 35,000 jobs lost across September. Consensus forecasts suggest the rate may hit 7.1%, however, recent data has shown that such predictions are not always reliable.
Also on Thursday, RBA Governor Philip Lowe will speak at the Citi Australia and New Zealand Annual Investment Conference. Market pundits will be on the lookout for any clues as to whether a rate cut will follow at next month’s Board meeting, with bond yield targets suggesting the move is anticipated by the broader market. Elsewhere, we’ll also have the latest consumer confidence data.
Overseas, China will be back in full swing after Golden Week wrapped up, reporting on loan activity, money supply, exports and imports, as well as inflation. The US will also publish inflation data, plus retail sales, however, investors will be keeping an eye on the election trail following the cancellation of the second presidential debate.
ASX major movers
Iron ore prices have firmed heading into the new week, which could give some support to the majors such as Rio Tinto (ASX: RIO), BHP (ASX: BHP) and Fortescue Metals Group (ASX: FMG). The segment was somewhat starved of news in relation to the commodity last week with China’s factory activity on halt amid the near-week-long public holiday.
Bank stocks may see some movement in light of this week’s employment data and RBA speech. Much of the concern in relation to the leading banks has been the risk of bad debts following loan deferrals, and with institutions now making efforts to get on top of the matter, employment data could paint a picture as to the extent of the battle that may lie ahead.
AGM season also kicks into gear, with Commonwealth Bank (ASX: CBA), Telstra (ASX: TLS) and CSL (ASX: CSL) all hosting their respective events this week. Perpetual (ASX: PPT) is also hosting its 2020 Annual General Meeting on Thursday, 15th October. The company may provide some progress regarding its recent acquisition of US specialist ESG investment firm, Trillium, as well as general business operations.
Meanwhile, concrete block and brick manufacturing company Brickworks (ASX: BKW) will trade ex-dividend on Wednesday, 14th October. The company previously declared a 39 cent fully-franked dividend, which is scheduled to be paid on November 25.
Many of the stocks that entered last week trading at all-time highs extended their strong run, including but not limited to Xero (ASX: XRO), Reece (ASX: REH), Netwealth (ASX: NWL), Codan (ASX: CDA) and Hub24 (ASX: HUB). They are joined by new names this week, including tech trio NextDC (ASX: NXT), Carsales (ASX: CAR) and Data#3 (ASX: DTL). Faring less favourably, however, is AGL Energy (ASX: AGL), which enters the trading week circling a 52-week low.
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