Source : THE AGE NEWS
By Stan Choe
Further gains in Australian stocks are expected to be muted on Tuesday with futures pointing to a slight rise of 14 points, or 0.17 per cent, for the market when it opens.
An upward shift in the local bourse on Monday capped a three-day winning streak as investors looked past recent market volatility to pile into banks, technology and healthcare stocks. Overnight the Australian dollar strengthened. It was fetching 64.35 US cents at 6am AEDT.
Gains in Australian stocks are expected to be muted.Credit: Louie Douvis
In the US, stocks drifted to a mixed finish on Monday, ahead of potential flashpoints later this week that could bring more sharp swings for financial markets.
The S&P 500 inched up by 0.1 per cent to extend its winning streak to a fifth day. The Dow Jones Industrial Average added 114 points, or 0.3 per cent, and the Nasdaq composite slipped 0.1 per cent.
The relative lull in trading offered a respite from the sharp, historic swings that have rocked markets for weeks, as hopes rose and fell that President Donald Trump may back down on his trade war. Many investors believe Trump’s tariffs could cause a recession if left unaltered. Coming into Monday, the S&P 500 had roughly halved its drop that had taken it nearly 20 per cent below its record set earlier this year.
Mixed trading for some influential tech stocks ahead of their earnings reports this week pulled the S&P 500 back and forth between modest gains and losses for much of Monday.
Amazon fell 0.7 per cent, Microsoft dipped 0.2 per cent, Meta Platforms added 0.4 per cent and Apple rose 0.4 per cent. All are on the schedule to report their latest result this week, and they’re some of Wall Street’s most influential companies because they’ve grown to become some of the biggest in terms of size, by far. That gives their movements extra weight on the S&P 500 and other indexes.
Outside of Big Tech, executives from Caterpillar, Exxon Mobil and McDonald’s may also offer clues this week about how they’re seeing economic conditions play out. Several companies across industries have already slashed their estimates for upcoming profit or pulled their forecasts entirely because of uncertainty about what will happen with Trump’s tariffs.
“We heard more plans to mitigate tariff impacts than in prior months and than during 2018” from US companies, including pre-ordering, shifting production and increasing prices for their own products, according to Bank of America strategist Savita Subramanian. But she also said in a report that she’s seeing “some indications of a pause: no hiring/no firing, no new projects/no cancellations etc.”
A fear is that Trump’s on-again-off-again tariffs may be pushing households and businesses to alter their spending and freeze plans for long-term investment because of how quickly conditions can change, seemingly by the hour.
So far, economic reports have mostly seemed to show the US economy is still growing, though at a weaker pace. On Wednesday, economists expect a report to say US economic growth slowed to a 0.8 per cent annual rate in the first three months of this year, down from a 2.4 per cent pace at the end of last year.
But most reports Wall Street has received so far have focused on data from before Trump’s “Liberation Day” on April 2, when he announced tariffs that could affect imports from countries worldwide. That could raise the stakes for upcoming reports on the US job market, including Friday’s, which will show how many workers employers hired during all of April.
Economists expect it to show a slowdown in hiring down to 125,000 from 228,000 in March.
The most jarring economic data recently have come from surveys showing US consumers are getting much more pessimistic about the economy’s future because of tariffs. The Conference Board’s latest reading on consumer confidence will arrive on Tuesday.
In the bond market, Treasury yields fell some more. They’ve largely been sinking since an unsettling, unusual spurt of higher yields earlier this month rattled both Wall Street and the US government. That rise had suggested investors worldwide may have been losing faith in the US bond market’s reputation as a safe place to park cash.
The yield on the 10-year Treasury fell to 4.21 per cent from 4.29 per cent late Friday.
AP
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