We take a look back at the key events from last week, check the market outlook for this week and list the key economic events, data releases and IPOs to look for.

 

 

The ASX 200 was closed on Monday June 9th, opening the trading week on the 10th. The market hit an all-time high on 11 June before the news of rising tensions in the Middle East flooded the market with new concerns, as Israel threatened Iran with air strikes should a potential deal brokered by the US not be reached. The news sent energy stocks climbing and gold stocks soaring. Six ASX listed gold exploration and development stocks hit 52 Week Highs, fueled by the prospect of higher oil prices, which rose 7%. The ASX 200 closed on Friday the 13th down 0.21% but solid gains early in the week propelled the index to its fifth straight weekly gain, up 0.37%.

US markets bore the full brunt of the news when Israel made good on its threat and attacked Iranian nuclear development infrastructure. The Dow Jones fell 700 points –a 1.79% decline – while the S&P 500 fell 1.13% and the Nasdaq dropped 1.3%. 

 

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The drop was enough to sink the three indices for the week, with the Dov falling 1.32%; the S&P 500 dropped 0.39%, and the NASDAQ broke its winning streak of the last two weeks, shedding 0.63%.

Prior to the Middle-East interruption global markets were in positive territory following the “announcement” of a trade deal between the US and China, with sketchy details. Consensus opinion is the deal will enact a 55% tariff on Chinese imports into the US and a 10% tariff on US exports to China. Cooler than expected increase in inflation – up 1% versus 2% last month – also buoyed market enthusiasm.

 

Table of Contents

Market Outlook for This Week

The market outlook once again comes down to tariff/trade news. The White House ended the week threatening to hike auto tariffs above the previously announced 25%, in a move some analysts see as a result of General Motors (GM) announcing a $4 billion dollar investment to boost US manufacturing.

The White House also reminded the world of the promise to unilaterally inform US trading partners the tariffs the US will require to allow continued trading with the US.

The Federal Reserve will be out with long term economic projections that could impact markets, but to date market reaction to dismal economic news has been to shrug it off on the tiniest bit of positive tariff/trade news.

US consumer sentiment is rising, indicating US consumers have yet to feel much pain from the tariffs in place, and ignoring warnings from analysts and economists there is pain to come.

 

Economic Data Releases This Week

Monday – US – Empire State Manufacturing Index

Tuesday – US – Export/Import Index, Retails Sales, Redbook Index, Industrial Production

Wednesday – Australia – Westpac Leading Index

Wednesday – US – Jobless Claims, Fed Interest rate Decision, FOMC Projections, Fed Interest Rate Projections

Thursday – Australia – ABS Employment Data

Thursday – US Markets Closed for Juneteenth Holiday

Friday – US – Philadelphia Federal Reserve Bank Manufacturing Survey

 

Both Australia and the US have economic data coming out this week that could move markets. If past is prologue, when negative news is followed by positive tariff/trade news, markets have been ignoring the negative and sticking with the positive. 

The prospect of earth-shattering economic news out of Australia and the US is low, although there are metrics that have traditionally rallied markets, like retail sales, unemployment, and inflation. US investors have been salivating over the prospect of more interest rate cuts out of the Federal Reserve, so this week’s interest rate decision could explode into a rally in the unlikely event they cut rates.

Tariff news is likely to take precedence over consumer and business confidence, sentiment, and consumer and business prices, but the Fed cautioning about upcoming interest rate cuts could ignite a downtrend.

 

New Listings and IPOs This Week

There are eight upcoming floats on the ASX, with two new entries this week.

  • VBX Limited, Australian bauxite producer 17 June
  • Greatland Resources Limited – Copper and Gold Explorer – 24 June
  • Infragreen Group – Owner and operator of infrastructures businesses – 25 June
  • La Trobe Private Credit Fund – Listed Investment Trust – 27 June
  • Linq Minerals – Copper and gold explorer – 4 July
  • Ballard Mining –Gold explorer demerging from Delta Lithium – 14 July

 

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