Markets Week Ahead: Will the US retail short-squeeze continue?

Markets Week Ahead: Will the US retail short-squeeze continue?

The local share market is set for a weak start this morning, as Wall Street ended sharply lower on Friday evening. Big names like Apple, Microsoft and Tesla dragged the index, however, attention was centred on the battle between retail investors and hedge funds in once-unloved stocks. That skirmish is set to continue over the coming days, while a busy RBA could also shape the ASX. 

 

Economic calendar and news

Manufacturing and services data is on show this week, as are exports and imports, retail sales from December, plus the latest job advertisements figures from ANZ, courtesy of its monthly survey. The Reserve Bank of Australia also takes centre stage this week.

The central bank will meet for the first time this year on Tuesday, where the official cash rate is not anticipated to move from 0.1%. Governor Philip Lowe will speak the following day at the National Press Club of Australia Conference. His remarks will be watched closely for insights as to the nation’s economic recovery, as well as any hints regarding the bank’s commitment to bond-buying. 

Rounding out the week, the RBA will also unveil its Statement on Monetary Policy, a quarterly assessment of current economic conditions, both domestic and international, along with the outlook for Australian inflation and output growth.

The US economic calendar sees a deluge of news this week, with a focus on manufacturing and services activity, construction spending, economic optimism, mortgage data, crude oil holdings, jobless claims, the balance of trade, and employment data for January. Forecasts suggest there may have been a small number of jobs created across the economy last month, but the unemployment rate may edge fractionally higher.

 

 

Major movers

As was the case last week, mega-tech stocks are lining up to report over the coming days, with Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOGLE) the biggest names on the radar of investors. 

Elsewhere, Pfizer (NYSE: PFE), Exxon Mobil (NYSE: XOM) and Merck (NYSE: MRK) will also release their quarterly earnings, as will Alibaba (NYSE: BABA). It comes at a critical juncture for the market, with the S&P 500 index dipping below its 50-day moving average, a level of support that is often considered important among technical traders.

Regardless of broader movement in the market, however, there will no doubt be significant attention diverted to heavily-shorted stocks that are the subject of the tussle between retail investors and institutions. This includes names like GameStop (NYSE: GME), in addition to AMC Entertainment Holdings (NYSE: AMC).

Locally, debt collection business Credit Corp (ASX: CCP) is scheduled to publish its half-year results for FY21 on Tuesday. The company recently upgraded its guidance following the acquisition of Purchased Debt Ledgers (PDLs) from one of its ASX-listed peers. Not alone in kicking off reporting season, the company will be joined by the likes of Amcor (ASX: AMC) and REA Group (ASX: REA).

Shareholders in Saracen Mineral Holdings (ASX: SAR) can look forward to their stock trading ex-dividend tomorrow, with the gold producer set to pay a fully-franked dividend of 3.8 cents per share on February 11. 

Wrapping up this week’s coverage with some of the current momentum stocks on the ASX, and there were new all-time highs for ARB Corporation (ASX: ARB), Domain Holdings Australia (ASX: DHG), Pointsbet Holdings (ASX: PBH), and Genesis Energy (ASX: GNE).

 

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