Market Update – The week ahead

Equity Indices saw some positive price action over the last week. The US continued to rally, albeit with a sense of unsurety. The S&P 500 finished Friday in a flat session as it saw close to a 4% rise for the week. The NASDAQ and the Dow Jones both followed similar patterns as the market determines its next course of action. From a technical perspective the next week will be crucial in determining if the market can rally out of its bearish channel or if the market has more selling to come.

The big news was in relation to Elon Musk and his Twitter deal. The Tesla CEO and billionaire pulled his offer to buy the social media giant. Musk claimed that Twitter did not uphold its contractual obligations surrounding the deal, mainly that it failed to provide him with enough information to make an assessment of the prevalence of fake or spam accounts on the company’s platform. The share price for Twitter fell 4.81% during Friday’s trading session and a further 7.85% after hours as the market responded to the pulling of the $44 Billion offer.

The ASX200 took its lead from Wall Street and saw some positive price action. With the end of tax selling, the start of July saw some more bullish sentiment return to the market. However, with a weak Australian dollar and commodity prices falling the momentum was pushing into a headwind.

Stocks in the spotlight

CSL (CSL)

Biotechnology stocks were powering along last week as the sector rallied. With CSL being the largest and most well-known biotech company on the ASX it saw a leap in its share price in line with the jump in the sector. In fact the ETF CURE which provides exposure to global biotech stocks closed the week up almost 14%. Similarly for CSL, it rose a substantial 6.73% and $18.12 as it broke its 6 month high.

Life360 INC (360)

The Australian technology company saw its share price fly last week and rose a little over 14% on Friday to end the week up 46% higher. Whilst there was not specific catalyst, the US technology sector saw a nice recovery providing sector wide strength. In addition, for a company that has seen a monumental sell off, quite simply a strong support zone may have been hit. The company may begin to see some further momentum as FOMO takes over and long term short holders begin to cover.

Silex Systems (SLX)

Uranium laser company Silex systems capped off a positive week with a 20% gain in its share price. The price reached multi decade highs after the company announced a letter of Intent with Duke Energy Carolinas, Global Laser Enrichment and Duke Energy Progress. The letter of intent is to cooperate on the development of the nuclear supply chain and to potentially accelerate the commercialisation process.

Important Economic Announcements

Wednesday

12:00pm – NZD Official Cash Rate, RBNZ statement

10:30pm – USA CPI m/m, Core CPI m/m

Thursday

12:00am – Canada BOC Monetary Policy Report, BOC Rate Statement, BOC Overnight rate

11:30am – Australia Employment change and Unemployment rate

10:30pm – USA PPI m/m

Friday

12:00pm – China, GDP q/y

10:30pm – USA Core Retail Sales m/m, Retail Sales m/m