ASX investors are looking at a shortened trading week with the Anzac Day holiday shuttering the markets on Thursday. But that doesn't mean there's not a lot of critical investing news set to hit the wires in the days ahead.
Below, eToro market analyst Josh Gilbert highlights three of the most important events to watch.
Inflation, the RBA and interest rates
The first thing ASX investors should be watching is the release of Australia's first-quarter CPI data.
"Given the RBA's last rate call was in March, this upcoming quarterly CPI reading will be an important one," Gilbert said.
He said that the data since then indicates "inflation may be gradually coming under control, coupled with last week's news that the unemployment rate is slowly drifting upwards".
If inflation is confirmed to be heading close to the RBA's 2% to 3% target range, Gilbert said this would "affirm a rate cut may be on the table in the second half of 2024".
He noted that "Expectations are for Q1 Headline CPI to rise 3.4% year-over-year, with housing set to be a major contributor as high migration continues to drive rental prices."
Gilbert added:
The S&P/ASX 200 Index (ASX: XJO) could also do with some optimism after its worst week in over a year, so a weaker-than-expected quarterly inflation reading will be a big boost for the local market.
ASX investors keep one eye on the US tech giants
Another big thing for ASX investors to watch closely is the earnings results from the United States tech giants.
"Five of the 'Magnificent 7' US big-tech stocks report earnings this week, with only Apple Inc (NASDAQ: AAPL) and Nvidia Corporation (NASDAQ: NVDA) set to report later on May 2nd and 22nd, respectively," Gilbert said.
Between them, these seven US stocks account for 29% of the market cap of the S&P 500 Index (INDEXSP: .INX).
Gilbert said the magnificent seven "look set to grow profits by 37% this quarter. That's a huge dispersion to the 3% decline expected from the rest of the 493 stocks on the S&P500."
According to Gilbert:
Out of the names reporting this week, Amazon.com, Inc. (NASDAQ: AMZN) looks set to lead earnings growth, jumping by 170% thanks to strength in AWS and a resilient consumer, whilst Microsoft Corp (NASDAQ: MSFT) looks set to continue benefiting from AI Adoption.
The success of Meta Platforms Inc (NASDAQ: META) of late looks set to continue, with earnings expected to grow by 96% for the quarter as digital advertising spending rebounds, and Zuckerberg's efficiency continues to bear fruit.
However, it's another big US company that's likely to draw even more scrutiny from ASX investors.
Namely, Tesla Inc (NASDAQ: TSLA).
"The EV manufacturer is set to be less than magnificent when it reports this week, with earnings set to fall by 40%, deliveries missing the mark, and margins contracting on price cuts," Gilbert said.
The Bitcoin price
ASX investors should also watch what's happening with Bitcoin (CRYPTO: BTC) this week.
The Bitcoin halving happened on Saturday, 20 April.
"This week, investors will be focused on the market's reaction to the halving, given we've seen a sharp sell-off over the last week amid rising geopolitical tensions," Gilbert said.
So far, the reaction has been muted, with the Bitcoin price up about 2% over the weekend.
"The last halving was in May 2020, and the last ever halving will be sometime in the year 2140, by current estimates," Gilbert said of the event that reduces cuts the block reward Bitcoin miners receive in half.
So, why should ASX investors watch for the upcoming price moves following the halving?
According to Gilbert:
It has generally marked the start of the next Bitcoin bull market, with the price surpassing the previous all-time high within six to eight months, and the bull market peak coming 12 to 18 months after the halving.
This time is different, though, as it's the first time we've seen the Bitcoin price surpass the previous all-time high before the block reward halving has even occurred.
Gilbert added:
However, don't be surprised to see a muted reaction in the weeks following the halving, with the larger upswings in the months ahead, which could provide investors with opportunities should we see lower prices in the weeks ahead.
