ASX 200 expected to fall further on poor US leads

The local sharemarket is poised for more pain on Monday, with poor US leads and a mixed corporate profit outlook adding to last week’s woes.

Futures markets are pointing to an early fall of 0.8 per cent or 64 points at the start of trade on the ASX on Monday. Picture: NewsWire / Gaye Gerard

The local sharemarket is poised for more pain on Monday, with poor US leads and a mixed corporate profit outlook adding to last week’s woes.

Futures markets are pointing to an early fall of 0.8 per cent or 64 points at the start of trade.

It follows a five-day fall in the Australian sharemarket last week, its longest string of daily losses in over two months.

“While the reporting season started off strongly, as is often the case, results over the last week were softer with disappointing bank results and falling earnings and dividend cuts for resources companies,” AMP head of investment strategy and chief economist Shane Oliver, said.

Woodside, Appen, WiseTech, Woolworths, Qantas and Coles are among the biggest names set to report this week.

Meanwhile, consumer price inflation figures will be watched closely on Wednesday, with consensus expectations pointing to a headline year-on-year lift of 2.6 per cent in January, slightly above December’s 2.5 per cent.

On Friday night Wall Street stocks tumbled, as a big drop in Treasury yields underscored worries about an economic slowdown.

Analysts said recent figures, including lacklustre US retail sales data and a tepid forecast from Walmart, raised questions about the outlook of the US economy as President Donald Trump pressed on with tariffs and government job cuts that could increase un­employment.

“You are starting to see some disappointment in the economic data,” said Tom Cahill of Ventura Wealth Management, who tied Friday’s big drop in the 10-year US Treasury note yield to economic worries.

The benchmark S&P 500 index fell 1.7 per cent to 6013.13 points, while the broadly based Dow Jones Industrial Average also lost 1.7 per cent, to 43,428.02. The tech-rich Nasdaq Composite Index fell 2.2 per cent to 19,524.01.

On Friday, an S&P Global reading on US services industry activity fell to a 25-month low, while a University of Michigan survey of consumer sentiment tumbled nearly 10 per cent from January.

LBBW’s Karl Haeling said both were considered “secondary” economic reports, but they corroborate other major data points on employment and retail sales that had also pointed to weakness.

“Investors ever since the election have been very bullish,” he said, pointing to “all the uncertainty coming from Trump.”

Crude prices fell by around 3 per cent as traders expect the US to ease sanctions on Russia.

Additional reporting: AFP