Markets Week Ahead: Bond yields circle a 14-month high, Crown takeover bid emerges

Markets Week Ahead: Bond yields circle a 14-month high, Crown takeover bid emerges

Another mixed finish to the week for Wall Street has done little to shore up confidence for the start of the new trading week, with ASX futures suggesting a muted opening this morning. 

Rising bond yields remain a hot topic in global financial markets, while locally, a pull-back among the heavyweight iron ore miners has kept the ASX in a holding pattern, despite broader signs of improvement in the local economy.

 

Economic calendar and news

A quiet agenda on the local front sees just manufacturing and services activity data due for release this week.

Overseas, however, the Federal Reserve will once again be in focus as a slew of key representatives speak throughout the course of the week. Headlining these speeches will be Fed Chair Jerome Powell, who is scheduled to testify before US Congress twice over the coming days.

Other data up for scrutiny includes existing home sales, durable goods orders, fourth-quarter corporate profits, personal income and spending, and a final reading into Q4 GDP

The importance of the income and spending data on show later in the week is that it will be accompanied by Personal Consumption Expenditure (PCE) inflation figures, the key metric used by the Fed to gauge broader inflation in the economy.  

Last week, bond yields continued to test the nerves of the market, as 10-year Treasury yields hit a 14-month high of 1.75% despite rhetoric from the Fed Reserve’s seeking to calm jitters in the bond market.

 

 

Major movers

Late on Sunday, news emerged that Crown Resorts (ASX: CWN) was the subject of a takeover bid from private equity group Blackstone. The bid, worth $11.85 per share, or a total of $8 billion, has been confirmed by the company this morning. It is also subject to a range of conditions, including but not limited to regulatory approval that Blackstone would be deemed a “suitable person” to own and operate the casino’s licences.

Having stuttered in recent weeks over concerns out of China, iron ore stocks will hold a major sway over the ASX in the coming days. Iron ore prices have seen a modest drop from recent highs, including another dip on Friday evening, with the impact of policy change on demand still being quantified by many.

Meanwhile, weaker oil prices also took their toll on the local energy sector last week, with crude prices at one stage shedding around 10%. Woodside Petroleum (ASX: WPL) saw a downbeat finish to the week, however, with crude paring some of its losses after the ASX closed on Friday, there may be a small rebound at play if that recovery holds up.

There were new records last week for a host of local ASX names, such as Reece (ASX: REH), Uniti Group (ASX: UWL), Chalice Mining (ASX: CHN), Piedmont Lithium (ASX: PLL) and Collins Foods (ASX: CKF). Each of these hit a new all-time high and enter the new trading week full of momentum. The same could not be said for construction contractor Cimic Group (ASX: CIM), which fell to a 52-week low despite announcing a series of major project wins.

Elsewhere, dividend season is still trickling through, with a number of stocks trading ex-dividend over the coming days. This starts today courtesy of Blackmores (ASX: BKL) and NRW Holdings (ASX: NWH), before Carsales (ASX: CAR) and Cochlear (ASX: COH) follow on Tuesday and Thursday respectively. A host of others like Healius (ASX: HLS) and Seven Group (ASX: SVW) will also join the fold.

This morning also sees Medallion Metals (ASX: MM8) begin its new life as a listed entity after completing a $12.5 million IPO. The gold explorer raised capital at $0.25 per share to fund its Ravensthorpe Gold Project 550km south-east of Perth.

Another float that was scheduled to join Medallion as a new ASX company today was that of highly-anticipated Airtasker (ASX: ART). The online task-outsourcing marketplace operator will instead debut on the ASX tomorrow, having raised more than $80 million amid significant interest from the investment community.

Finally, in the US, Adobe (NASDAQ: ABE) and GameStop (NYSE: GME) will likely attract higher-than-normal interest as both prepare to hand down their latest quarterly earnings on Tuesday, US-time. 

 

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