Busy week in reporting season to guide local sharemarket

The local sharemarket will take cues from corporate results, with big names including BHP, Rio Tinto, Qantas and Woolworths highlighting a busy week in reporting season.

The local sharemarket will take cues from corporate earnings results in the week ahead, with big names including BHP, Rio Tinto, Qantas and Woolworths highlighting the busiest week of February’s reporting season.

Futures markets were pointing to a steady open for the local bourse on Monday, shrugging off Wall Street’s weak close.

The benchmark S&P/ASX 200 index closed at 7658.3 points on Friday, within striking distance of its all-time record 7699.4 points hit earlier this month.

With 124 of the top 200 ASX-listed companies still to report, interim reporting season had so far exceeded market expectations, Bell Potter director of institutional sales and trading Richard Coppleson said.

“The huge surprise is that there have been far more beats than the average over the last eight years,” Mr Coppleson said.

“Many had expected this to be a poor reporting season so far – that has just not happened.

“Also, many did worry that too many stocks had rallied too hard into their results and would get smashed (when they report) – that has not happened.”

Meanwhile, AMP chief economist Shane Oliver said there was “no need to get too concerned” about speculation US rate cuts might be delayed.

“The path to lower inflation was always going to be bumpy and the trend in US and global inflation remains down,” he said.

Global shares were buffeted last week, with better than expected offshore profit results tempered by higher than expected US inflation data.

Wall Street stocks retreated on Friday after a bigger than expected increase in wholesale prices poured cold water on hopes the Federal Reserve would cut interest rates soon.

The Dow Jones Industrial Average ended 0.4 per cent down at 38,627.99, while the S&P 500 Index lost 0.5 per cent to 5005.57.

The tech-rich Nasdaq Composite Index dropped 0.8 per cent at 15,775.65.

The slide came after US wholesale prices increased more than expected, gaining 0.3 per cent in January on higher services costs.

US wholesale prices rose more than expected in January, according to government data published on Friday, as services costs were lifted by a jump in the index for hospital outpatient care.

The producer price index (PPI) rose 0.3 per cent in January after falling by 0.1 per cent a month earlier, the US Labor Department said.

US Treasury yields, which can act as a proxy for interest rate expectations, rose on Friday.

The 10-year Treasury yield rose to about 4.3 per cent, while the two-year yield exceeded 4.6 per cent.

However, AMP’s Dr Oliver said three-year inflation expectations continued to fall in the US and were now at 2.4 per cent.

“In fact, Fed chair Jerome Powell downplayed the hotter than expected January CPI data, saying it was ‘consistent with what they had been anticipating’,” he said.

Locally, the week will kick off with reports from Ampol, Bendigo Bank, BlueScope, Cochlear and Lendlease and Westpac’s first-quarter update on Monday, while Tuesday brings reports from Altium, BHP and Perpetual, and RBA minutes.

Additional reporting: AFP