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ASX this week: Market concerned as Trump era begins

ASX this week: Market concerned as Trump era begins

US President Trump's post-inauguration plans, Australian inflation data and the upcoming Lunar New Year break are some of the key events that could impact financial markets this week.

Australian shares slumped for a second week last week, with the benchmark S&P/ASX 200 index losing 1.2% over five days to 5,654.8.

The financial sector, which has the heaviest weighting on the index, tumbled 2.8% over the week.

On Friday:

  • Brent oil gained 2.5% to US$55.49 a barrel; up less than 0.1% for the week.
  • WTI crude increased 2% to US$52.42 a barrel; up 0.1% for the week.
  • Iron ore with 62% content delivered to Qingdao, China, dropped 0.7% to US$80.41 a dry metric tonne; down 0.2% for the week.
  • Spot gold rose 0.5% to US$1,210.32 an ounce; up 1.1% for the week.
  • Australian dollar traded at 75.55 US cents, strengthening 0.7% over five days; the currency gained 0.2% to 75.73 US cents at 2:33pm Sydney time today.

What to watch this week

Donald Trump's plans as the new President of the United States and his final cabinet line-up are likely to remain a focus of investors following the inauguration ceremony last Friday, CommSec said.

The Dow Jones Industrial Average fell for three straight days last week from Tuesday, before rebounding to end Friday 0.5% higher. Over the four-day trading week, the index was down 0.3%.

The US earnings reporting season is underway, with company announcements likely to impact share movements. Those scheduled to release their latest financial results this week include McDonald's, Yahoo!, Verizon and Tesla.

Meanwhile, production reports from Australian miners and energy companies this week will serve as a good guide for the ASX profit reporting season that starts next week, according to CommSec.

On the economy front, the most important Australian data will be the Consumer Price Index (CPI), out on Wednesday. CommSec said indicators showed that another low reading of inflation is on the cards.

"We are tipping a 0.7% lift in the headline rate of inflation, lifting the annual inflation rate to near 1.6%," it said.

The ASX will be closed this Thursday for Australia Day, while the Lunar New Year, which starts on Saturday, 28 January, will keep many markets across Asia closed for a few days. In particular, markets in mainland China will be closed from 27 January to 2 February.

Stock movers

Below are the five best- and worst-performing ASX 200 stocks for the week ended Friday, 20 January.

Company/Index

ASX code

Weekly price change

Bega Cheese

BGA

+20.9%

CSL

CSL

+13.4%

St Barbara

SBM

+10.2%

Infigen Energy

IFN

+9.9%

Resolute Mining

RSG

+6.8%

S&P/ASX 200

XJO

-1.2%

South32

S32

-5.7%

Seven Group Holdings

SVW

-5.7%

Primary Health Care

PRY

-6%

Sigma Pharmaceuticals

SIP

-8.1%

BT Investment Management

BTT

-9.7%

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.