Summary of Last Week
The four week string of market declines was broken in both US and Australian markets, with the US S&P 500 Index up a meager 0.5% for the week, climbing out of correction territory. The ASX 200 closed up 1.83% for the week, buoyed by impressive gains in consumer staples stocks, Woolworths Group (ASX: WOW), Coles Group (ASX: COL), and Metcash Limited (ASX: MTS).
Here in Australia some investors might be tempted to view the outsized weekly gain in the Consumer Staples sector (up 3.9%) as evidence investors are increasingly moving into defensive positions. Another explanation is likely. The ACCC (Australian Competition and Consumer Commission) investigation into price gouging from the nation’s supermarkets exonerated Woolworths, Coles, and Metcash.
Most analysts seem to agree the sell-off going into the week abated with the potential mellowing of US President Donald Trump on his on-again, off-again tariff policies. In addition, the chair of the US Federal Reserve Jerome Powell weighed in on the debate over the tariff policies, calling their impact on inflation “transitory.” The US Fed held the line on interest rates, as did other central banks around the world.
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The news out of the US Fed that is getting credit for adding to the upward bounce was the announcement of “the likelihood of two interest rate cuts in 2025.”
The modest but positive week stopped the upward movement in the price of gold.
ASX Market Outlook For This Week
The ASX market outlook for next week and possibly for the near future remains cautious at best. Market participants enthralled with Trump’s comment “there would be some flexibility in tariffs” conveniently ignored the upcoming reciprocal tariffs on all countries that impose tariffs on US goods scheduled to commence on the 2nd of April remain in place.
Economic data for the upcoming week is light, with nothing coming out of China and inflation data and purchasing manufacturing and services indices from both the US and Australia due during the week the key events.
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