{"id":10689,"date":"2024-06-10T11:38:13","date_gmt":"2024-06-10T11:38:13","guid":{"rendered":"https:\/\/economicherald.net\/?p=10689"},"modified":"2024-06-10T11:38:13","modified_gmt":"2024-06-10T11:38:13","slug":"traders-diary-everything-you-need-to-get-ready-for-the-week-ahead-16","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=10689","title":{"rendered":"Traders\u2019 Diary: Everything you need to get ready for the week ahead"},"content":{"rendered":"
<\/div>\n

What grabbed the headlines last week?<\/p>\n

\u00a0<\/p>\n

The Aussie benchmark index rallied over 2% last week, nestling it\u2019s brave little chin on the edge of semi-greatness and a new all-time high.<\/p>\n

Another 2% this week and we\u2019ll hit the 8,000 point milestone which will trigger some kind of psychological thingy. And a big light show in Sydney.<\/p>\n

But trading the ASX200 (XJO) index is no picnic.<\/p>\n

The strength should have encouraged the bulls, especially considering the market\u2019s ability to close on its highs for the week ahead of a key and fallible US Jobs Report.<\/p>\n

However, the market continues to deliver very mixed results on the stock and sector level, with the resources likely to take their turn in the \u201cnaughty corner\u201d on Monday after copper and gold tumbled on Friday night.<\/p>\n

\u00a0<\/p>\n

ASX Sectors Last Week<\/h2>\n

Via MarketIndex<\/p>\n

\u00a0<\/p>\n

Winners: Treasury Wine Estates (ASX:TWE)<\/strong><\/a> +6.5%, Insurance Australia (ASX:IAG)<\/strong><\/a> +5.8%, Ansell (ASX:ANN)<\/strong><\/a> +5.7%, Goodman Group (ASX:GMG)<\/strong><\/a> +5.3%, Commonwealth Bank (ASX:CBA)<\/strong><\/a> +5%<\/p>\n

Losers: Liontown Resources (ASX:LTR)<\/strong><\/a> -10.8%, Life360 (ASX:360)<\/strong><\/a> -9.8%, SiteMinder (ASX:SDR)<\/strong><\/a> -8.6%, Lovisa Holdings (ASX:LOV)<\/strong><\/a> -7.8%,Megaport (ASX:MP1)<\/strong><\/a> -6.9%, Xero (ASX:XRO)<\/strong><\/a> -4.2%,<\/p>\n

\u00a0<\/p>\n

US jobs and EU mobs<\/h2>\n

The May jobs report was hotter than expected. The latest print effectively nixed the chances for a July rate cut from the Fed. Non-farm Payrolls increased by 272,000 for the month, compared to consensus of 190,000 and well above April\u2019s gain of 165,000.<\/p>\n

Average hourly earnings rose 4.1% over the past year, a greater increase than tipped and a bummer for lovers of\u00a0 lower rates.<\/p>\n

Meanwhile, French and European markets fell on Monday in the wake of President Emmanuel Macron\u2019s shock decision to call snap parliamentary elections after his centrist alliance was trounced by Marine Le Pen\u2019s far-right movement in the European parliamentary vote.<\/p>\n

A sell-off in French stocks and bonds dragged down European-wide indices as investors reacted to political instability and the possibility of a far-right government.<\/p>\n

The country\u2019s Cac 40 stock index fell 2% to a near six-month low as banks and utilities sold off.<\/p>\n

The other big news during the week was the European Central Bank (ECB) cutting rate cuts, delivering on its well-telegraphed 25bp June cuts \u2013 good news \u2013 but don\u2019t get too excited about the local reserve bankers following suit anytime too soon.<\/p>\n

The RBA won\u2019t automatically follow Canada and the ECB into cutting rates as they are a bit further advanced in getting inflation back under control, according to AMP\u2019s chief economist Dr Shane Oliver.<\/p>\n

\u201cBut their move following other central banks is a further positive sign that global inflation pressures are coming under control, and this is a good sign for the RBA as Australian inflation lagged global inflation on the way up and is doing the same on the way down. So just as the RBA moved rates up with other global central banks, albeit with a lag versus some, it\u2019s likely to ultimately do so in terms of cutting rates too, again with a lag.\u201d<\/p>\n

EU Q1 GDP was as expected at 0.3% q\/q, but there\u2019s a clear blank when it comes to domestic demand. ECB Boss Christine Lagarde remained cautious and offered little guidance other than to go home, hug your family.<\/p>\n

On rates, small cap and homeowners hope this will all signal the tide has turned and we\u2019re heading downhill.<\/p>\n

However, even the latest (Friday) US jobs report had strength enough to send traders in reverse on their hopes for rate cuts in the US through 2024\/5.<\/p>\n

The surprisingly punchy job growth and wage increase added to the conviction the Fed will stay on hold through our winter and potentially beyond.<\/p>\n

More annoyingly, average hourly earnings rose 4.1% over the past 12 months, more than forecast or wanted.<\/p>\n

Regardless, Wall Street clocked new record highs last week, despite the Friday night non-farm falls.<\/p>\n

US shares rose 1.3% for the week and Eurozone shares rose 0.9%. Japanese shares rose 0.5% for the week, but Chinese shares fell 0.2%.<\/p>\n

Helped along by the positive US lead and with weaker economic growth boosting confidence in prospects for RBA rate cuts, the Australian share market rose 2.06% over the last week led by some very strong big banks, consumer stocks and property shares leading the rise.<\/p>\n

On Wall Street as I write, Nvidia\u2019s 10-for-1 stock split starts splitting.<\/p>\n

The move is a vote of confidence for CEO Jensen Huang and all this is NVDA and its apparently limitless upside.<\/p>\n

Even after the 150% gain to start the year, analysts say the move could bring near-term volatility, though the bull case remains intact.<\/p>\n

Elsewhere, the well-attended Roaring Kitty, Me and GameStop (GME) YouTube livestream happened on Friday.<\/p>\n

The theme was tedious (\u2018why I\u2019m so bullish \u2013 aside from money \u2013 about GME etc\u2019), but the self-aggrandising meme-stock own-lunchtime-legend shared his sandwiches with some 650k people so it\u2019s certainly a thing, although exactly what its nature is this time round is unclear. What will be remembered is that he wore sunglasses and swore and drank beer.<\/p>\n

\u00a0<\/p>\n

He\u2019s no Joker:<\/h2>\n

pic.twitter.com\/8Gpb9zQ1yF<\/a><\/p>\n

\u2014 Roaring Kitty (@TheRoaringKitty) June 10, 2024<\/a><\/p>\n\n

<\/h2>\n

The Week Ahead<\/h2>\n

While the Fed is widely expected to keep rates unchanged at the upcoming June meeting, in contrast to the European Central Bank, the Federal Open Market Committee (FOMC) meeting may well generate a lot of buzz given the market\u2019s hunt for clues regarding the timing of the next Fed move.<\/p>\n

Despite the consensus having pointed in the direction of a Fed cut toward the tail end of 2024, recent data have been mixed, notably with weaker growth signals for the second quarter combining with stubborn price signals, thereby fuelling uncertainty over when the Fed will eventually lower rates.<\/p>\n

The release of May CPI in the US, ahead of the FOMC meeting conclusion, will therefore provide another important data point to help guide the expectation for rates.<\/p>\n

Closer to home, the Bank of Japan will be another major central bank meeting to set policy in the week, though likewise with no changes to monetary policy expected imminently.<\/p>\n

Barclays Bank expects the BoJ to stand pat next week and will focus on any communications that set the stage for a rate hike in July (their base case).<\/p>\n

\u201cWe think the BoJ will clarify its normalization stance around rate hikes and QT and reconfirm its intention to adjust bond purchases flexibly under the current settings.\u201d<\/p>\n

Japanese manufacturers are facing the fastest rise in input costs among the economies tracked by S&P\u2019s PMI data, in part due to the currency impact.<\/p>\n

With anticipation also having gathered for the Bank of England to lower rates, the UK sees timely updates to both employment and monthly GDP for April. While it is unlikely for the BoE to cut rates prior to the general election on 4th July, markets will be assessing scope for an August rate cut, S&P adds.<\/p>\n

Other data to watch in the week include factory gate inflation out of mainland China, which follows the Caixin PMI updates, possibly offering some margin pressures for manufacturers.<\/p>\n

<\/h2>\n

\u00a0<\/p>\n

\u00a0<\/p>\n

The Economic Calendar<\/h2>\n

Tuesday June 11 \u2013 Friday June 14<\/strong><\/h2>\n

\u00a0<\/p>\n

TUESDAY
\nAustralia NAB Business Confidence (May)
\nUnited Kingdom Labour Market Report (Apr)
\nBrazil Inflation (May)
\nMexico Industrial Production (Apr)<\/p>\n

WEDNESDAY
\nSouth Korea Unemployment Rate (May)
\nChina (Mainland) CPI, PPI (May)
\nGermany Inflation (May, final)
\nUnited Kingdom monthly GDP, incl. Manufacturing, Services
\nand Construction Output (Apr)
\nThailand BoT Interest Rate Decision
\nIndia Industrial Production (Apr)
\nIndia Inflation Rate (May)
\nUnited States CPI (May)
\nUnited States Fed Interest Rate Decision
\nUnited States FOMC Economic Projections
\nUnited States Fed Press Conference<\/p>\n

THURSDAY<\/strong>
\nAustralia Westpac Consumer Confidence (Jun)
\nAustralia Employment Change (May)
\nAustralia Unemployment Rate (May)
\nChina (Mainland) M2, New Yuan Loans, Loan Growth (May)
\nEurozone Industrial Production (Apr)
\nBrazil Retail Sales (Apr)
\nUnited States PPI (May)<\/p>\n

FRIDAY
\nAustralia Consumer Inflation Expectations (Jun)
\nJapan BoJ Interest Rate Decision
\nJapan Industrial Production (Apr, final)
\nGermany Wholesale Prices (May)
\nIndia Trade (May)
\nIndia WPI (May)
\nFrance Inflation (May, final)
\nItaly Balance of Trade (Apr)
\nEurozone Balance of Trade (Apr)
\nUnited States Export Prices (May)
\nUnited States Michigan Consumer Sentiment (Jun, prelim)<\/p>\n

<\/span><\/p>\n

The post Traders\u2019 Diary: Everything you need to get ready for the week ahead<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

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