AUSTRALIAN stocks are not expected to match the slump on global bourses over the weekend in response to the Greek crisis, according to Wealth Within chief analyst Dale Gillham.
The latest developments in Europe would have an impact on the local market, particularly in terms of trading volatility, but events closer to home would have more bearing.
"I think this next week we are going to still be a little bit choppy, but I don't expect our market to be really down," Mr Gillham said yesterday.
"I actually expect our market to probably generally trade up from now through to Christmas and into January."
"We are much more affected by China and things going on in the Asian markets."
Greek Prime Minister George Papandreou won a parliamentary no-confidence vote over the weekend, and was working towards building a unity government of "broad consensus" to pass the European Union bailout plan that was agreed to last week.
Stocks closed lower in New York on Friday night despite official figures that showed the US jobless rate fell to 9 per cent in October, compared with 9.1 per cent the previous month.
The non-farm payrolls report also showed the world's largest economy added 80,000 jobs in the month. Although the result was below market expectations, there were significant upward revisions to previous months' data.
"The October labour market report provides further evidence that recession risks that were gaining prominence in mid-summer have receded and that growth seems to have returned to a trend-like pace," JPMorgan economists said in a research note dated November 4.
The Dow Jones Industrial Average slipped 0.51 per cent, the S&P 500 backpedalled 0.63 per cent and the NASDAQ declined 0.44 per cent.
In terms of economic news this week, market players are expected to focus on the latest round of Chinese economic data, including figures on growth and inflation, due on Wednesday.
"The data out of China this week is something that will give us heads up of what the next 12 months is going to be like," Mr Gillham said.
On the local data front, the October labour force report is due out on Thursday.
The median forecast among economists was for the nation to have added 10,000 jobs in October and an unemployment rate of 5.2 per cent, unchanged with the September result.
Other data scheduled for release includes NAB's monthly business survey, Westpac's consumer confidence report and the latest trade figures.
In equities news, Myer Holdings is due to release first quarter sales results and Optus owner SingTel publishes second quarter earnings.
The annual general meeting season also rolls on, with shareholder gatherings for companies such as Seven Group, Commonwealth Bank of Australia and Fortescue Metals Group on this week.
The Australian dollar was down slightly when Wall Street ended trade, sitting at US103.76? compared with US103.97? at Friday's local close.
The December share price futures contract closed weekend trading down 27 points at 4258 points.
Frequently Asked Questions about this Article…
How will the Greek crisis and European turmoil affect Australian stocks and market volatility?
According to Wealth Within chief analyst Dale Gillham, the Greek crisis is likely to increase trading volatility in Australia but won’t trigger a matching slump on local bourses. Events closer to home and developments in Asia, particularly China, are expected to have a stronger bearing on the Australian market.
Are Australian shares expected to fall or rise in the near term (through to Christmas and January)?
Mr Gillham expects the market to be a little choppy in the short term but generally trade up from now through to Christmas and into January, rather than experience a sustained downturn.
What global economic data should everyday investors watch this week that could influence Australian markets?
Investors should watch the latest round of Chinese economic data, including growth and inflation figures due mid-week, since China and Asian markets strongly influence Australia. US labour data also matters—recently the US unemployment rate fell to 9% in October and the economy added 80,000 jobs, though markets still pared gains.
Which Australian economic reports are important this week for investors?
Key local releases include the October labour force report (due Thursday) where economists forecast about 10,000 jobs added and a 5.2% unemployment rate unchanged, as well as NAB's monthly business survey, Westpac's consumer confidence report, and the latest trade figures.
What company results and meetings should shareholders follow this week?
Corporate events to watch include Myer Holdings' first-quarter sales results and Optus owner SingTel's second-quarter earnings. The annual general meeting season also continues, with shareholder gatherings for companies such as Seven Group, Commonwealth Bank of Australia and Fortescue Metals Group.
How did US markets react to the latest jobs report and what does that mean for global sentiment?
Despite the US jobless rate falling to 9% in October and non‑farm payrolls showing 80,000 jobs added (with upward revisions to prior months), US stocks closed lower: the Dow slipped 0.51%, the S&P 500 fell 0.63% and the NASDAQ declined 0.44%. That mixed reaction highlights how markets weigh data against broader risk factors.
What happened to the Australian dollar and share futures at the last local close?
At the end of Wall Street trade, the Australian dollar was slightly down at about US103.76¢ compared with US103.97¢ at Friday's local close. The December share price futures contract closed weekend trading down 27 points at 4258 points.
Why do China and Asian market moves matter for Australian investors?
The article notes Australia is more affected by China and Asian markets than by Europe. Mr Gillham says Chinese data coming this week will give a good indication of what the next 12 months might look like, so investors should monitor China’s growth and inflation figures for guidance on Australian market direction.
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