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ASX this week: All eyes on Trump's speech, Australian economy

ASX this week: All eyes on Trump's speech, Australian economy

US President Donald Trump will speak about tax cuts in his address to Congress, while data on Australia's economic growth in the final quarter of 2016 will be released.

Australia's S&P/ASX 200 index slumped 1.2% last week to 5,739, dragged down by diversified miners BHP Billiton (ASX: BHP) and Rio Tinto (ASX: RIO), as iron ore tumbled for three consecutive days. Meanwhile, an ongoing strike at BHP's Escondida mine in Chile has disrupted output at the world's largest copper mine.

On Friday: 

  • Brent oil dropped 1% to US$55.99 a barrel; up 0.3% for the week.
  • WTI crude fell 0.8% to US$53.99 a barrel; up 1.1% for the week.
  • Iron ore with 62% content delivered to Qingdao, China, shed 0.9% to US$90.50 a dry metric tonne; a total price loss of 4.6% from Wednesday to Friday pared iron ore's weekly gain to just 0.1%.
  • Spot gold increased 0.6% to US$1,257.19 an ounce; up 1.8% for the week.
  • Australian dollar traded at 76.76 US cents, strengthening 0.2% over five days; the currency fell 0.1% to 76.7 US cents at 11:12am Sydney time today.

What to watch this week

US President Donald Trump will address a joint session of Congress on Tuesday night, where he will speak about tax reforms that the new government will aim to complete by August, Bloomberg reported on Sunday, quoting Treasury Secretary Steven Mnuchin.

Mnuchin said Trump's upcoming budget for the 2018 fiscal year will focus on boosting long-term economic growth by cutting taxes, according to the news report.

The Dow Jones Industrial Average was up 1.3% last week to 20,821.76. The 30-stock gauge had advanced 5.4% so far this year.

Meanwhile, the Australian Bureau of Statistics (ABS) will release the National Accounts report on Wednesday, 1 March, which includes figures on gross domestic product.

"We expect that the economy bounced back in the December quarter, growing as much as 1% after the previous sector's fall of 0.5%," said CommSec.

On Thursday, the ABS will publish data on international trade and building approvals, all for January. 

The February earnings reporting season is in its final days. Results from ASX 200 companies so far "confirm that Corporate Australia is in good shape", CommSec economists Craig James and Savanth Sebastian said.

About 94% of the ASX 200 companies that have reported interim results so far have been in profit, the economists said. 

Stock movers

Below are the five best- and worst-performing ASX 200 stocks for the week ended Friday, 24 February.

Company/Index

ASX code

Weekly price change

Asaleo Care

AHY

+21.1%

NextDC

NXT

+17.9%

McMillan Shakespeare

MMS

+12.6%

Vocus Group

VOC

+12.3%

Estia Health

EHE

+10.6%

S&P/ASX 200

XJO

-1.2%

Blackmores

BKL

-12.8%

Sky Network Television

SKT

-13.9%

WorleyParsons

WOR

-19.5%

Ardent Leisure Group

AAD

-24.7%

iSentia Group

ISD

-40.8%

Past performance is not a reliable indicator of future performance. Source: Bloomberg

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. The inclusion of companies in this article does not constitute a recommendation and it’s vital to remember that the value of shares in any company can fall as well as rise, which means you could lose money by investing in them. Investors should consult a range of resources, and if necessary, seek professional advice, before making investment decisions in regard to their objectives, financial and taxation situations and needs because these have not been taken into account. Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and a Participant of the ASX Group and Chi-X Australia.