3. COVID-19 remains out of control in the US: Market participants remain wary of the state of the pandemic, as the health crisis escalates in the US. The infection rate and caseload of COVID-19 continues to climb in the US, exceeding 70,000 for the first time at the end of last week.
Of greatest concern, hospitalisation and mortality rates are beginning to pick-up again. Its pushing hard-hit states like Florida, California and Texas to reconsider implementing social distancing measures, as fears mount that health care systems are on the cusp of reaching over-capacity.
4. ASX200 driven by domestic COVID-19 risks: The ASX200 found itself weighed down by domestic COVID-19 concerns last week. Victorias outbreak has cast doubts over the state of the pandemic in Australia, and subsequently the economys path to recovery.
The ASX200 fell by 0.61 per cent on Friday, to take the losses for the week to 2.29 per cent, paced by declines in sectors COVID-19 sensitive sectors such as real estate, industrials, and financials.
5. US-China tensions continue to simmer: Growing tensions between the US and China remain a prevalent but perhaps mis-priced risk in global markets. Relations between the two countries became more fraught on Friday night, after the Trump administration flagged banning Chinese tech-app TikTok, and the US President stated to US media a phase-2 trade deal was not being considered because the relationship has been “severely damaged”.
The ratcheting-up of tensions did little to disrupt the rally of Chinese stocks last week. The CSI300 rallied 7.55 per cent for the week, to top the list of returns for global benchmark indices.
6. US earnings season to capture the limelight: This week kicks-off arguably the most highly anticipated earnings season in the US in over a decade. Expectations are for a tough reporting period for US companies, with FactSet data pointing to a decline in earnings growth across the S&P500 for the second quarter of 44 per cent.
The major focus for the market will be on the shape of the rebound in earnings growth however, with consensus estimates suggest this quarter will mark the trough in the earnings downturn.
7. Keeping an eye on central bank meetings: Not to be entirely outshone, this week comes with several high impact events. The most significant of which will be the meeting of the Bank of Canada, Bank of Japan, and European Central Bank. Little by way of change in policy is tipped from any of the three. But forecasts and forward guidance will be closely watched.
Locally, the macro-calendar will be highlighted by local jobs data on Thursday. While in broader Asia, Chinese GDP figures on Thursday also promises to be high-impact.
8. Market watch:
ASX futures up 95 points or 1.6 per cent to 5971 at 6.59am AEST
- AUD at 69.54 US cents at 7.20am AEST
- On Wall St: Dow 1.4% S&P 500 1.1% Nasdaq 0.7%
- In New York: BHP +1.1% Rio +1.6% Atlassian -1.9%
- In Europe: Stoxx 50 +1.1% FTSE +0.8% CAC +1% DAX +1.2%
- Spot gold -0.3% to $US1798.70 an ounce New York
- Brent crude +2.1% to $US43.24 a barrel
- WTI US oil +2.4% to $US40.55 a barrel
This column was produced in commercial partnership between The Sydney Morning Herald, The Age and IG
Information is of a general nature only.