Key takeaways:

• Financials, resources, and tech shares could be the source of this week’s trading action

Following the best week for the ASX since November last year, the market will be guided by US earnings and local trading updates.

Economic Calendar and News

On Tuesday the Reserve Bank of Australia will release the minutes from its July Board meeting.

The release is likely to show that the RBA was facing another line-ball decision, while also making it clear the need for further rate hikes will depend on upcoming data between now and the next monetary policy decision.

Last week, however, commentary from RBA Governor Phillip Lowe, whose tenure has not been extended by the government, somewhat toned down rhetoric around the need for further rate hikes. 

This was responsible, at least in part, for a revision in the terminal rate outlook in financial markets. For example, markets are now pricing in just one more RBA rate hike, as opposed to three more hikes. With progress being made to stamp out inflation overseas, there may even be some confidence within the central bank that monetary policy is adequately balanced for the time being.

One factor that could play a key role in the RBA’s next rate decision is the release of the national Labour Force survey for June, which will be published Thursday.

There are currently a number of estimates in the market for employment growth last month, however, consensus figures suggest around 15,000 to 25,000 jobs may have been added to the Australian economy in June. It is believed the official unemployment rate will remain steady at 3.6%, with the participation rate at an all-time high of 66.9%.

On Tuesday, the US Census Bureau will release retail sales figures for the month of June. The data will offer fresh insights on consumer spending. Based on preliminary figures, retail sales potentially rose by 0.5% last month, or 1.1% on an annual basis. That annual figure would represent the smallest increase since the start of the pandemic.

Elsewhere, look out for updates on the state of the US housing market. Some of the indicators that will be released include building permits, housing starts, and existing home sales. Economists anticipate a contraction in housing starts after a surprise rebound a month prior.

In other events, China will release second-quarter GDP data today.

Stocks on watch

Reporting season in the US moves forward with a number of high-profile results on the agenda, but on home soil investors will also be digesting quarterly updates from an assortment of commodity names.

By far the biggest ASX name publishing a quarterly report this week is iron ore titan BHP (ASX: BHP). Naturally, the company’s iron ore exports will be in focus, but after acquiring copper miner OZ Minerals a couple months back, observers will be hoping for an update on how the integration is faring and the outlook moving forward. 

Nonetheless, with China’s GDP being released Monday, we’ll have a better understanding of demand for the key steel-making ingredient, and perhaps whether optimism for a stimulus package out of Beijing might be a realistic prospect. Recently, the price of iron ore hit a monthly high of nearly US$114 on speculation Beijing could offer support to the Chinese property market.

After last week’s sector-wide rally, ASX gold stocks will almost certainly remain in the spotlight over the coming days as updates trickle through. This includes production reports from the likes of Northern Star Resources (ASX: NST) and Evolution Mining (ASX: EVN), who were trading at an eight-week high after the price of gold surged last week in response to a weaker greenback.

Coal prices have continued trending lower over recent weeks, and that means reporting names will likely deliver a very different set of numbers compared with a year ago when prices were more than three times higher. Whitehaven Coal (ASX: WHC) and Yancoal (ASX: YAL) both have quarterly updates pencilled in this week, although their share prices have recorded significant declines over the last nine or so months.

More broadly in the energy space, the other cohort with results on show is the oil and gas segment. Woodside Energy (ASX: WDS) and Santos (ASX: STO) are scheduled to release their updates on Thursday and Friday respectively. Compared with a year ago, the price of crude oil is down about 25%, including a modest slip during Friday’s offshore trading session. That follows profit taking that arose in response to an upbeat consumer sentiment report.

In the US, Bank of America (NYSE: BAC), Morgan Stanley (NYSE: MS), and Goldman Sachs (NYSE: GS) are among the financials that will report earnings.

They will be accompanied by a host of other big-name reports including those from Tesla (NASDAQ: TSLA), Netflix (NASDAQ: NFLX), IBM (NYSE: IBM), Lockheed Martin (NYSE: LMT), Johnson & Johnson (NYSE: JNJ), United Airlines (NASDAQ: UAL), Taiwan Semiconductor (NYSE: TSM), and Newmont Corporation (NYSE: NEM), among others.

See which companies to look out for this earnings season, including the key points to watch.