Australian shares set to dip despite Wall Street gains
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The news: The Australian sharemarket is set to start the week lower despite a positive close on Wall Street on Friday, with local investors cautious ahead of GDP data this week.
The numbers: The Dow Jones index ended 0.55% higher to notch a fresh record close, while the broader S&P 500 climbed 1.01% and the tech-heavy Nasdaq advanced 1.13%. In the local market, ASX 200 futures were down 18 points or 0.22% to 8,031 points at 7am AEST on Monday.
The context: US stocks closed higher on Friday after fresh US economic data reinforced expectations that the Federal Reserve will cut interest rates in September. US consumer spending increased solidly in July, suggesting the economy remained strong while prices rose moderately.
The personal consumption expenditures report came after Fed Chair Jerome Powell expressed support for an imminent policy adjustment. It helped end a tumultuous month on Wall Street after signs of a sudden moderation in the labour market in early August sparked fears of a US recession.
US stock markets will be closed on Monday for the Labor Day holiday, but economic data later in the week includes the Labor Department's August jobs report. Money markets suggest traders mostly expect the Fed to cut rates by 25 basis points in September, with odds of a 50 basis point cut dimming further after Friday's data.
In the local market, investors will be focused on June quarter GDP data due on Wednesday, which is likely to show economic growth remains weak.
The source: Reuters
