Australian shares are tipped to ease back from record highs on Friday after a weaker night on Wall Street as investors await the outcome of a key monetary policy-setting event in the United States.
The Australian Securities Exchange’s (ASX) main price index should open about 0.1% lower, with the S&P/ASX 200 September share price index (SPI) contract trading 12 points under the previous settlement at 8,971 at the time of writing.
The main price indices fell in New York on Thursday (Friday AEST) on concerns about what Federal Reserve Chair Jerome Powell may say in an upcoming speech and following weaker-than-expected results from retailer Walmart.
Global markets will closely watch Powell’s keynote speech on Friday (Saturday AEST) at the Fed’s annual Jackson Hole symposium for a guide on interest rates, which in turn set the direction of equities and other asset classes.
The Dow Jones Industrial Average fell 0.3%, the S&P 500 shed 0.4% and the Nasdaq Composite dropped 0.3%.
"Jitters over what's going to transpire tomorrow at Jackson Hole is certainly weighing on risk appetite a little bit with Chair Powell's speech," LPL Financial Chief Technical Strategist Adam Turnquist was quoted in a Reuters story as saying.
Strong company results in the continuing reporting season helped push the Australian share market above 9,000 points for the first time on Thursday with the S&P/ASX 200 Index gaining 1.1% to 9,019.1.
Burrell Stockbroking wealth adviser Adam Dight said the strength in Australian share prices had surprised some investors with short sellers forced to reverse their positions, particularly as small to mid-sized companies impressed with earnings results.
“The earnings always catch up to prices. The market is a weighing machine, as Warren Buffet famously said. It’s like a pendulum and it can go a long way to the left before earnings actually catch up,” Dight said.
Among the stocks in focus today will those reporting including GQG Partners (ASX: GQG), Latitude Group Holdings Ltd (ASX: LFS), Inghams Group (ASX: ING), Helia Group Ltd (ASX: HLI), and Accent Group Ltd (ASX: AX1).
In fixed interest markets, yields on Australian Government bonds were flat at 4.317% for 10 year paper and lower by 0.62% at 3.352% at the two year end of the curve.
