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ASX this week: Yellen's speech and US corporate earnings

ASX this week: Australian shares at 19-month high

Investors will keep an eye on speeches from several US Federal Reserve officials this week, including Fed Chair Janet Yellen, while US listed companies start releasing their results for the final three months of 2016.

Australian shares rose in all four trading days last week, bringing the S&P/ASX 200 index 1.6% higher to 5,755.6. The benchmark stock gauge hit a 20-month high this morning, trading at 5,789 at 11am Sydney time.

On Friday:

  • Brent oil added 0.4% to US$57.10 a barrel, up 0.5% for the week
  • WTI crude rose 0.4% to US$53.99 a barrel; up 0.5% for the week
  • Iron ore with 62% content delivered to Qingdao, China, tumbled 3.4% to US$76.25 a dry metric tonne; down 3.3% for the week
  • Spot gold lost 0.6% to US$1,172.63 an ounce; up 2.2% for the week
  • Australian dollar traded at 73.01 US cents, gaining 1.3% over the week; the currency strengthened 0.1% to 73.18 US cents by noon Sydney time today

What to watch this week

Several US Federal Reserve officials, including Fed Chair Janet Yellen, will speak this week. Yellen will host a town hall meeting in Washington at 7pm Eastern Time on Thursday, or 11am Sydney time on Friday.

Her speech, and comments at the subsequent questions and answers session, could impact financial markets, according to CommSec. The meeting follows the release of US employment data last week, which showed the world's largest economy added 156,000 jobs in December.

That "adds to expectations rates will rise further in 2017", CommSec said, noting the market has priced in a 93% chance of a hike in US interest rates this year.

Meanwhile, listed companies in the US will start handing in their fourth-quarter financial results. Companies scheduled to make announcements this week include Alcoa (Monday) and JPMorgan Chase, Wells Fargo and Bank of America (Friday).

CommSec said, quoting Factset, that fourth-quarter earnings from S&P500 companies are expected to increase 3.2% from a year earlier.

The Dow Jones Industrial Average, which advanced 13% in 2016 and rose 1% so far this year, closed at 19,963.8 on 6 January.

"Should US equities break 20,000, markets could keep rising," said CommSec.

Meanwhile, key economic data scheduled for this week include Australia's November retail trade and China's inflation and trade balance, both for December.

Stock movers

Below are the five best- and worst-performing ASX 200 stocks for the week ended Friday, 6 January.

Company/Index

ASX code

Weekly price change

Aconex

ACX

+11.8%

St Barbara

SBM

+10.3%

Saracen Mineral Holdings

SAR

+10.1%

Vocus Communications

VOC

+9.8%

Syrah Resources

SYR

+7.5%

S&P/ASX 200

XJO

+1.6%

A2 Milk Company

A2M

-3.9%

iSentia

ISD

-4.2%

Ardent Leisure

AAD

-4.7%

Orocobre

ORE

-7.9%

Corporate Travel Management

CTD

-15.7%

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.