ASX set for uncertain start as Wall Street grinds higher
US stocks notched a second straight week of gains, as a climb in Walt Disney shares boosted the Dow Industrials and S&P 500 but a sharp drop in consumer sentiment kept the investor optimism in check.
Walt Disney rose in one of the biggest boosts to both the Dow and benchmark S&P after its profit topped market expectations as its streaming services added more customers than expected and its pandemic-hit US theme parks returned to profitability.
Wall Street eked out another weekly gain but consumer confidence is wavering. Credit:NYSE
The Australian sharemarket is set to edge lower this morning, with futures pointing to a dip of 9 points, or 0.1 per cent, at the open. It’s a busy day of reporting season, with Seven West Media, LendLease, BlueScope and JB HiFi among those due up.
But a report from the University of Michigan dented optimism after it showed the university’s preliminary consumer sentiment index fell to 70.2, its lowest level in a decade, suggesting that the Delta variant of the coronavirus was impacting consumers.
“That is concerning, the consumer is by all accounts in an extremely strong position but there is this kind of COVID fatigue that is really starting to wear on people’s sentiment,†said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky.
“Regardless of lockdown or full reopen, the consumer is healthy enough to spend and kind of keep the economy afloat, it will be different names and different sectors that become the beneficiaries of it.â€
The report sent the yield on the 10-year US Treasury note lower and in turn helped lift mega-cap growth names, such as Microsoft, while online retail giant Amazon slipped.
US stocks have managed to slowly grind to new highs over the past few sessions as investor confidence in economic recovery was bolstered by a strong earnings season, the passage of a large infrastructure bill and data showing inflation may be increasing at a slower pace than feared.
In the wake of new data from earlier this week that showed consumer price increases slowed in July, while producer prices posted their biggest annual rise in more than a decade, investors are now looking ahead to the meeting of central bankers in Jackson Hole, Wyoming, later this month for cues on policy.
In recent days, several Fed officials said it is nearly time for the central bank to begin pulling back on its monetary support, including the tapering of its asset purchases.
DoorDash rose, reversing earlier losses after the food-delivery firm’s loss widened more than expected in the second quarter.
Airbnb slipped after it flagged a hit to its current-quarter bookings by the Delta variant and a slowing pace of US vaccination.
Reuters
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