For the third week in a row, futures suggest the open of the local market this morning could be a muted affair. US markets performed robustly on Friday evening, with tech a particular strong point and potentially a lead for action to start the week, while inflation data could prove influential for global equities and the commodities boom.
Economic calendar and news
Expect the biggest news to come out of the US this week, with a number of influential data-points set to be released.
While neither job opening numbers nor the Balance of Trade, including exports and imports, are expected to sway the market to any meaningful degree, there may be more impact from data on crude inventories and inflation.
As far as inflation goes, economists are tipping that the number could come in as high as 4.7% year-on-year. This takes into account the subdued recording 12 months ago when the pandemic led to downwards pressure on prices. More importantly, forecasts point to an expected rise of 0.5% for month-on-month inflation, which would compound the last reading and potentially put pressure on the Federal Reserve ahead of its mid-month meeting.
Local economic data this week will include figures from ANZ on job advertisements, home sales, building permits, business confidence and consumer confidence, plus an influential speech from RBA Assistant Governor (Financial Markets), Christopher Kent.
Stocks on watch
Tech shares are on watch to start the week, but will also become a barometer later in the week as well. To start with, names like Altium (ASX: ALU) and Xero (ASX: XRO) may signal whether tech strength in the US to end last week bodes well for local tech names.
Once US inflation data comes out, however, it may pay to keep a close eye on the likes of Tesla (NASDAQ: TSLA), and other high-growth names like Apple (NASDAQ: AAPL), which have traded subdued amid concerns over high inflation potentially leading to taper talk. Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL) and Facebook (NASDAQ: FB) could draw extra attention on the back of weekend news concerning the G7’s agreement on minimum global corporate tax rates.
The price of gold had a minor setback last week, coming unstuck before paring some of its losses on Friday evening. That momentum could set up local gold producers like Northern Star Resources (ASX: NST) for a strong start to the week, albeit these names could be susceptible to the week’s inflation data and any impact it has on trading in the price of the precious metal.
Energy stocks were last week’s biggest movers, both home and abroad. Names such as Santos (ASX: STO) and Exxon Mobil (NYSE: XOM) underscored the rally across the sector as oil prices touched US$70 per barrel. Data on crude inventories may be one of the factors that shapes performance among the shares in the energy sector over coming days.
Elsewhere, Reddit favourite AMC Entertainment (NYSE: AMC) had a blistering week and has attracted a frenzy of trading interest. The stock soared 83.4% last week, and 116.2% the week prior. This sharp move higher comes despite the company selling 11.55 million shares to raise $587.4 million in fresh capital. It would seem investors appear pleased the proceeds can be used to reduce the company’s debt profile, while also pushing growth across European and Middle East markets.
Last but not least, keep an eye out for a number of IPOs this week, with card-issuing and payments infrastructure supplier Marqeta, which serves the likes of Square and DoorDash, looking to complete a raise for US$1 billion and list on the Nasdaq under the ticker ‘MQ’.
Closer to home, local IPO names due to hit the ASX include:
- Industrial lighting developer, FOS Capital (ASX: FOS);
- Junior mining explorer, Arcadia Minerals (ASX: AM7);
- Property technology firm, Openn Negotiation (ASX: OPN);
- Listed Investment Company (LIC), Salter Brothers Emerging Companies (ASX: SB2);
- Gold explorer, Torque Metals (ASX: TOR);
- Life sciences instruments developer, Trajan Group Holdings (ASX: TRJ);
- Brain tissue therapeutics business, Argenica Therapeutics (ASX: AGN)
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