Futures for the Australian share market are pointing to a subdued start to the new trading week, despite US markets erasing the bulk of their pre-market losses on Friday and ending the week with mixed results. Local tech names are front and centre this week as Afterpay, Zip, WiseTech, Appen and Seek all hand down earnings over the coming days.
Economic calendar and news
The local economic calendar is light on news this week, with the only real data being published focusing on construction work done, private capex and private sector credit.
Out of the US, there will be new readings on home sales and prices, durable goods orders, personal income and spending, and a second estimate of GDP growth from the fourth quarter.
However, each of these events are likely to be overshadowed by testimony from Federal Reserve Chairman Jerome Powell, who will speak before the Senate Finance Committee and House Financial Services Committee on Tuesday and Wednesday, US-time. As part of his bi-annual commitments, he will discuss matters including the economy, interest rates and inflation.
Economic stimulus will also remain in discussion, despite US retail sales showing significant growth last week and pointing to an improvement in the broader economy.
Also on watch will be US 10-year Treasury yields, which hit a 12-month high last week as the vaccine roll-out and rapid decrease in new COVID cases lead to economic optimism and the prospect of reflation.
While a diverse range of names step up to report their latest earnings this week, the discernable theme on show will certainly be tech stocks, with some of the market’s favourite names due to provide updates.
This begins with Seek (ASX: SEK) on Tuesday, with the job advertisement portal racing to all-time highs last week as the employment landscape in Australia picks up dramatically, far exceeding expectations. One of the key catalysts to look out for in Seek’s report will be the growth of its China operations, historically one of the key driver’s behind the stock’s lofty valuation.
The following day will see WiseTech Global (ASX: WTC) and Appen (ASX: APX) up for scrutiny. The fortunes of the two stocks entering reporting season could not be more different, with WiseTech still plotting its post-COVID recovery, whereas Appen has been trending lower and last week touched its lowest level since April, 2020. Appen flagged some of its current headwinds amid the pandemic in a December trading update, so barring any surprises, the key watchpoint may well be how trading has fared in the early parts of 2021.
Thursday will see results from the two big guns from the buy-now pay-later segment as Afterpay (ASX: APT) and Zip Co (ASX: Z1P) publish their half-year reports for FY21. The duo have been in hot demand lately as the strong growth in this segment continues to play out, including at an international level. With Afterpay now one of the largest stocks across the entire ASX, its results are sure to reverberate across the market.
Beyond tech, however, there are a number of other large-cap stocks set to report that will shape the direction of the market this week. These include Woolworths (ASX: WOW), A2 Milk (ASX: A2M), Qantas (ASX: QAN), Sydney Airport (ASX: SYD), Oil Search (ASX: OSH) and Ramsay Health Care (ASX: RHC) to name a few.
With many companies having already reported their results, dividends will also be on offer to shareholders in a number of stocks. Some of the names trading ex-dividend this week are:
- Monday: Ansell (ASX: ANN) and Tabcorp (ASX: TAH);
- Tuesday: Amcor (ASX: AMC), Santos (ASX: STO) and Wesfarmers (ASX: WES);
- Wednesday: AGL (ASX: AGL), Codan (ASX: CDA) and Telstra (ASX: TLS);
- Thursday: JB Hi-Fi (ASX: JBH) and Woodside Petroleum (ASX: WPL);
- Friday: Coles Group (ASX: COL)
It’s also worth keeping an eye on currency movements this week as the Australian dollar had a big showing on Friday night, powering to a near 3-year high. This trend will have an impact on exporters and companies that earn in USD, examples of which are CSL (ASX: CSL), BHP (ASX: BHP) and Northern Star Resources (ASX: NST).
Last but not least, some stocks to watch in the US include big-names like Nvidia (NASDAQ: NVDA) and Salesforce (NYSE: CRM), plus investor favourites in Beyond Meat (NASDAQ: BYND) and Airbnb (NASDAQ: ABNB), each of which report earnings in the week ahead.
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