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ASX this week: energy and US election in focus

ASX this week: energy and US election in focus

US election and global energy debates will be key events investors will watch closely this week.

Australian stocks rebounded last week after five straight weeks of decline, with the S&P/ASX 200 index gaining 2.5% over five days to 5,431.3 on Friday, September 23.

On Friday:

  • Brent oil fell 3.7% to US$45.89 a barrel, paring its weekly increase to 0.3%
  • WTI crude dropped 4% to US$44.48 a barrel; up 3.4% for the week
  • Iron ore rose 0.8% to US$56.79 a dry metric tonne; up 1.5% for the week
  • Spot gold was little changed at US$1,337.56 an ounce; up 2.1% for the week
  • Australian dollar was trading at 76.23 US cents and was virtually flat on Monday morning

In the US, the Dow Jones Industrial Average slipped 0.7% on Friday but was 0.8% higher for the week. Both the S&P 500 and Nasdaq advanced 1.2% over the week.

What to watch this week

Governmental and corporate officials and industry experts gather at the International Energy Forum in Algiers, Algeria, this week to address issues facing the global energy sector.

The three-day forum starting today could impact financial markets, especially on oil prices, according to CommSec.

“In April, a deal to freeze oil output among OPEC [Organization of the Petroleum Exporting Countries] members and Russia fell through because Saudi Arabia wanted Iran to take part in the deal,” said CommSec.

Iran signalled today, as it did then, that it would only consider a deal once it manages to get oil production back to pre-sanction levels of 4 million barrels a day, CommSec added. “A deal to cut production on Wednesday would see oil prices rally.”

CommSec said financial markets will closely watch a televised first debate between US Presidential candidates Hillary Clinton and Donald Trump on Monday night US time (Tuesday morning in Australia).

“Recent weeks have seen Clinton lose ground in the polls. A strong result in the debate for Trump could see markets grow more wary,” it stated.

The US will release a series of economic data this week, including revised figures for gross domestic product on Thursday, which could have a bearing on interest rate expectations that could in turn impact equity markets, CommSec said.

Stock movers

Below are the best- and worst-performing ASX 200 stocks for the week ended Friday, September 23.

Company/Index

ASX code

Weekly price change

Japara Healthcare

JHC

+14.8%

Western Areas

WSA

+12%

Independence Group

IGO

+12%

WorleyParsons

WOR

+11.7%

ALS

ALQ

+11.3%

S&P/ASX 200

XJO

+2.5%

Vocus Communications

VOC

-9.4%

Orocobre

ORE

-11.2%

OFX Group

OFX

-16.7%

Galaxy Resources

GXY

-19.7%

TPG Telecom

TPM

-22.8%

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.