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ASX this week: Investors keep Trump's tax revamp on radar

ASX this week: Investors keep Trump's tax revamp on radar

Investors are watching for detailed announcements on tax reform in the US, as well as the country's employment data for February.

Australian shares fell last week, with the S&P/ASX 200 index shedding 0.2% over five days to 5,729.6, dragged down by the telecommunication services and energy sectors. All four companies in the telco sector - Spark New Zealand, Telstra, TPG Telecom and Vocus Communications - had losses of between -4.8% and -0.3%.

On Friday: 

  • Brent oil gained 1.5% to US$55.90 a barrel; down 0.2% for the week.
  • WTI crude climbed 1.4% to US$53.33 a barrel; down 1.2% for the week.
  • Iron ore with 62% content delivered to Qingdao, China, slumped 1.1% to US$91.32 a dry metric tonne; up 0.9% for the week.
  • Spot gold added less than 0.1% to US$1,234.81 an ounce; down 1.8% for the week.
  • Australian dollar traded at 75.96 US cents, weakening 1% over the week; the currency dropped 0.3% to 75.74 US cents at 11:35am Sydney time today.

What to watch this week

Financial markets are continuing to keep an eye out for the impending tax overhaul in the US, after President Donald Trump gave little details about his plans for tax reform.

In his address to Congress last week, Trump said there will be a "massive tax relief for the middle class" and reduced tax rates for businesses.

CommSec said an announcement could come this week, which could impact market movements.

The Dow Jones Industrial Average rose past the 21,000 mark to set a new record high of 21,115.55 after Trump spoke to Congress. However, the 30-stock index pared its gains the following day, ending the week at 21,005.71.

Meanwhile, the US will release its February non-farm payrolls report on Friday, 10 March. 

Jobs may have risen by 175,000 in the US last month, while unemployment rate eased to 4.7% from 4.8%, CommSec said.

The US Federal Reserve Chair Janet Yellen suggested that interest rates in the world's largest economy were likely to rise this month, provided there's no negative surprise in the upcoming employment data.

Locally, the Reserve Bank of Australia will make a call on the official cash rate tomorrow at its March board meeting.

"It is a pretty safe bet that interest rates will be left unchanged," said CommSec. "Financial market volatility remains subdued, oil prices are steady; and the Aussie dollar has lifted - albeit marginally."

Stock movers

Below are the five best- and worst-performing ASX 200 stocks for the week ended Friday, 3 March.

Company/Index

ASX code

Weekly price change

WorleyParsons

WOR

+30.2%

Nanosonics

NAN

+13.7%

Corporate Travel Management

CTD

+9.9%

South32

S32

+9.8%

Costa Group

CGC

+8.8%

S&P/ASX 200

XJO

-0.2%

Spotless Group

SPO

-12.3%

St Barbara

SBM

-15.9%

Syrah Resources

SYR

-17.3%

Orocobre

ORE

-19.8%

Resolute Mining

RSG

-23.9%

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.