Markets Week Ahead: Central banks to guide markets, ASX eyes a fast start inspired by tech

Markets Week Ahead: Central banks to guide markets, ASX eyes a fast start inspired by tech

After another bumper performance from the Dow Jones and S&P 500, as well as returning interest in tech stocks, the Australian market looks set to play catch-up with a strong open to the trading week. 

With US shares already entering the long weekend on a high note thanks to infrastructure stimulus, Good Friday’s blowout jobs report also added momentum to begin a week where central bank policy and fresh economic data will be the focal point.

 

Economic calendar and news

This week’s primary event will be the April Reserve Bank of Australia Board meeting, due to conclude later today. That will also tie-in with the central bank’s six-monthly Financial Stability Review

Despite Australia’s economic recovery far exceeding all expectations, flat wage growth means no change in rhetoric is expected from the RBA, which would mean interest rates being pinned at rock-bottom levels for some years. The current bond-buying program, scheduled to run til October, is another area where commentary may be scrutinised, with both the bond market and Australian dollar finding some stability.

Other data-sets to be released include job advertisements, construction activity and final services activity, each for March, as well as final data on building permits for February.

In the US, the economic calendar consists of the latest readings for factory orders, services activity, job openings, consumer inflation expectations, the balance of trade including exports and imports, and producer price information

Minutes from the Federal Reserve’s most-recent policy meeting will also be published, and there will be scheduled speeches from Fed Reserve officials including Chairman Jerome Powell.

 

 

Major movers

Local tech shares are probably looking at finding some support, at least to start the week, with the Nasdaq roaring back to life in recent trading sessions. Names like Afterpay (ASX: APT), Xero (ASX: XRO) and Appen (ASX: APX) were among those to perform strongly on Thursday last week, and with tech momentum continuing to build since, represent those most-leveraged to any further strength. 

Following the end of lockdown restrictions in Brisbane, as well as COVID cases being contained, there may be some attention for travel stocks like Qantas (ASX: QAN) and Flight Centre (ASX: FLT) this week. The New Zealand government is today expected to announce a date for the opening of quarantine-free travel from Australia. Adding to the fold is some surprisingly upbeat travel data out of Queensland, with Deputy Premier Steven Miles indicating that flight and hotel occupancy levels were circling 90% of those from the 2019 Easter period.

Trading ex-dividend this week are three of the listed investment companies (LIC) from Wilson Asset Management, being WAM Research (ASX: WAX), WAM Alternative Assets (ASX: WMA) and WAM Microcap (ASX: WMI). They will be joined by the likes of ARB Corporation (ASX: ARB) as the stream of ASX dividends slowly draws to a close.

The woes of A2 Milk (ASX: A2M) shareholders have yet to be placated, with the stock dropping to another multi-year low last week before the Easter break. TPG (ASX: TPG) also succumbed to a 52-week low of its own. That is in stark contrast to building materials supplier Boral (ASX: BLD), which touched a yearly high after selling its share in USG Boral and launching an on-market share buy-back. 

The IPO of flower grower and wholesaler Lynch Group Holdings (ASX: LGL) will proceed this morning after it was delayed last week. The company raised more than $200 million at $3.60 per share. Another IPO locked-in for tomorrow is gold and copper explorer TechGen Metals (ASX: TG1), which raised $6 million at $0.20 per share. A number of other names including Iceni Gold, Propell Holdings and 92 Energy are potential candidates to list, however, at the time of writing the ASX has not yet given final listing approval.

 

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