The Australian sharemarket is tipped for a cautious start on Monday ahead of another big week of company earnings reports.
CommSec chief economist Craig James says earnings season has so far provided very good results and the local market has reacted positively.
But he says there’s uncertainty in the US with investors on Friday backing away from weak economic data due to severe winter weather that has depressed activity, and commodities markets providing little in the way of a good lead-in.
“I think we’ll get off to a fairly cautious start,” Mr James said on Sunday.
“We could see some modest gains at the start of trade, but with a degree of caution as more earnings flow through.”
BlueScope Steel, Caltex Australia and NIB will release their results on Monday while Qantas is expected to post a first-half loss of up to $300 million on Thursday.
Mr James said overall, businesses appear to be in good shape.
“At the moment Australian companies are largely well run, though some have got to do a bit more work to be able to improve their bottom line, such as Qantas,” he said.
In the US, stocks closed on Friday with modest declines.
“There’s a lot of uncertainty about how the fundamental state of the US economy is, given the fact that these weather events continue to knock around the economic data,” Mr James said.
A major focus for the week will be Australian Bureau of Statistics capital expenditure data, due on Thursday.
But the G20 meetings in Sydney on the weekend were unlikely to have an impact on markets because any decisions tended to be medium to longer term, Mr James said.
At Friday’s local close, the benchmark S&P/ASX200 index was up 26.4 points, or 0.49 per cent, at 5,438.7 – its highest level since June 2008.
The broader All Ordinaries index was up 28.1 points, or 0.52 per cent, at 5,449.4, while the Australian dollar was trading at 89.98 US cents.