While US markets hit record highs on Friday evening, the ASX is looking at a flat start to begin the new trading week. The coming days are set to be a test of the optimism that has swept over the market these last few months as key names like Commonwealth Bank, Telstra, Transurban and Newcrest Mining headline a busy flow of results.
Economic calendar and news
Throughout the week we’ll receive the latest business confidence and consumer confidence readings, with both running hot amid the economic recovery playing out across Australia.
After last week’s dovish commentary from the RBA with respect to fiscal policy, the Australian dollar will remain in watch. Initially the currency slipped after Governor Philip Lowe extended the central bank’s bond-buying activity and indicated its preference for a lower currency, however, the AUD/USD rallied into the weekend after the US dollar fell in the wake of weak job numbers.
Some greater clarity around the forex rate will also come to the fore this week courtesy of US inflation data for January, although expectations point to a largely similar result as that of December.
CBA headlines earnings season; Source: CommBank
ASX reporting season is about to heat up as a host of blue-chip names prepare to hand down their earnings.
Financial services companies are the prevailing theme with third-quarter results from Macquarie Group (ASX: MQG) and half-year results from Commonwealth Bank (ASX: CBA) set to be the biggest tests for the week ahead. In particular, analysts will be looking at the size of CBA’s dividend now that APRA has lifted the cap on bank dividends, while the prospect of a share buyback is also an outside possibility.
There will also be results from diversified financials and investment firms in Suncorp (ASX: SUN), Challenger (ASX: CGF), IAG (ASX: IAG), AMP (ASX: AMP), Magellan (ASX: MFG) and ASX (ASX: ASX).
Telstra (ASX: TLS) rounds out the big names, heading into Thursday’s earnings call around the same share price as that of six months ago after it handed down a disappointing full-year result for FY20.
Elsewhere, gold stocks will also be among those in discussion as the price of the precious metal circles a key level. After the ASX closed on Friday the commodity managed to edge back above US$1800/oz, however, for some of the key miners and producers in this space like Evolution Mining (ASX: EVN) and Northern Star Resources (ASX: NST), which were on the receiving end of a sell-down last week, shareholders will be hoping that gold prices work higher to offset currency appreciation.
Shares in ResMed (ASX: RMD) trade ex-dividend on Wednesday, the same day that Milton Corporation (ASX: MLT) will also trade without its fully-franked dividend entitlement.
Finally, Afterpay (ASX: APT) enters the new trading week full of momentum, reaching a new all-time high last week as it easily surged through the $150 per share mark. Some other names notching up records of their own included Wesfarmers (ASX: WES), Seek (ASX: SEK), Nine Entertainment Co (ASX: NEC), Breville Group (ASX: BRG) and Domain Holdings Australia (ASX: DHG).
In the US, Cisco (NASDAQ: CSCO) is among the names to report this week, however, they will likely be overshadowed by two favourites in the investment community, Walt Disney (NYSE: DIS), which unveils Q1 FY21 earnings, and PayPal (NASDAQ: PYPL), which hosts its Investor Day event.
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