The ASX is looking at a modest gain when trading resumes this morning after Wall Street ended a tough week solidly in the green on Friday.
The overnight futures market saw a gain of 35 points for the ASX 200 for the start of trading today, but as last week, it will be the worsening Covid infection numbers for NSW and Victoria that will be the real driver of sentiment.
The ASX 200 lost 0.1% on Friday to close at a three-week low 7,460.9, following up the record high it set just seven days ago.
In the worst week since January, the ASX 200 fell 2.2% across the five sessions and shed more than $50 billion.
The weekly slide was the largest from the end of January this year, but local investors also ignored the continuing slump in Chinese and Hong Kong markets, though they did take note of the plunge in iron ore prices, especially on Wednesday and Thursday – they steadied and rose a tough on Friday.
Wall Street rebounded to close sharply higher on Friday, closing a tumultuous week on speculation over whether the US Federal Reserve could begin tightening monetary policy sooner than expected.
The worsening Covid Delta infections in Japan, parts of China and the rest of Asia, parts of Europe and much of the US was a late negative factor for investors.
US bond yields were easier, ending around 1.26% and down over the week while the value of the Aussie dollar fell sharply, down around 2.4YUS cents to 71.30 US cents.
While all three major indexes – the Dow, S&P 500 and Nasdaq – ended up for the session, all posted weekly losses after a steep mid-week sell-off pulled the S&P 500 and the Dow away from a string of record closing highs.
Announcements from a string of Asian countries that they are implementing drastic measures to curb the resurgence of COVID-19 due to the rise of the disease’s highly contagious Delta variant, put a damper on stocks associated with economic re-engagement.
Investors are looking to this week’s Jackson Hole Symposium in Wyoming, a gathering of major central bank leaders, for clues from Fed Chair Jerome Powell regarding the expected pace of recovery and the timeline for policy tightening.
He speaks late Friday night, Sydney time which means his comments will be broadcast as Wall Street is trading, making for a rough session, potentially.
Second-quarter reporting season has essentially run its course, with 476 of the companies in the S&P 500 having posted results. Of those, 87.4% have beaten consensus, according figures from Refinitiv.
The Dow Jones Industrial Average rose 225.96 points, or 0.65%, to 35,120.08, the S&P 500 added 35.87 points, or 0.81%, to 4,441.67 and the Nasdaq Composite jumped 172.88 points, or 1.19%, to 14,714.66.
For the week the Dow lost 1.12%, the S&P 500 shed 0.6% and Nasdaq dipped by 0.73%.
