You’ll need to update your browser so you can continue to log on to your online banking from 28th February. Update now.

Close

News

What to watch on the ASX this week

What to watch on the ASX this week

US jobs data and central bank rate movements are expected to be the focus this week as Australia's earnings reporting season ends.

A plunge in Telstra shares and overall weakness in the energy and materials sectors dragged down the Australian stock market last week, with the benchmark S&P/ASX 200 index falling 0.2% over five days to 5,515.5.

Telecommunication services stocks tumbled 3.2%, the worst-performing sector, after Telstra lost 5.5%. Shares in the company began trading ex-dividend last Wednesday, which means shares bought from this date won’t be entitled to the final dividend declared for the 2016 financial year.

Energy and materials companies slid 2.6% and 1.4% respectively, as prices of oil futures, iron ore and gold declined last week.

Consumer staples had the largest gain of 2.6%, followed by utilities (+1.8%) and healthcare (+0.9%).

Over a week to August 26:

  • Brent oil declined 1.9%
  • WTI crude dropped 1.8%
  • Iron ore slumped 3%
  • Spot gold slipped 1.5%
  • Australian dollar weakened 0.8% against the US dollar

What to watch this week

Janet Yellen, US Federal Reserve chairwoman, said last Friday in Wyoming that “the case for an increase in the federal funds rate has strengthened in recent months”.

Her belief was based on the continued solid performance of the US labour market, and the Federal Open Market Committee’s outlook for economic activity and inflation, according to her speech.

“At the end of the day, investors and analysts will go back to watching the data with the next major test being the non-farm payrolls or employment data on Friday,” CommSec economists said in a note on Sunday.

CommSec said in a separate note today that the US may have created 164,000 more jobs in August. “Stronger-than-expected job gains together with higher wages would lift speculation about a December [rate] hike.”

Meanwhile, movements in the US markets may also be affected by the ‘back to school’ season as the summer holidays in the northern hemisphere comes to an end, CommSec said today.

“Back to school means back to work for the government, businesses and the markets,” it said.

In Australia, the August earnings reporting season comes to the final three days. Results that investors are likely to watch include Ramsay Health Care (Tuesday) and retailer Harvey Norman (Wednesday).

In terms of economic data, the Australian Bureau of Statistics will release July data on retail sales this Thursday. Spending may have risen 0.3% as consumers sought to tread cautiously over the election period, CommSec said.

Stock movers

Below are the best- and worst-performing ASX 200 stocks for the week ended Friday, August 26.

Company/Index

ASX code

Weekly price change

Altium

ALU

+27%

GWA Group

GWA

+25.6%

iSentia Group

ISD

+16.1%

Southern Cross Media Group

SXL

+12.9%

Retail Food Group

RFG

+10.9%

S&P/ASX 200

XJO

-0.2%

Aconex

ACX

-14.3%

Monadelphous Group

MND

-17.6%

Western Areas

WSA

-19.6%

Blackmores

BKL

-21.7%

APN Outdoor Group

APO

-35.6%

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.