3 things ASX investors should watch this week

Here are the most important events to keep an eye on for the sake of your stock portfolio.

Another huge week awaits ASX shares.

These are the three biggest events to monitor, according to eToro market analyst Josh Gilbert:

A male investor sits at his desk pondering at his laptop screen with a piece of paper in his hand.

Image source: Getty Images

1. Reserve Bank cash rate decision

Unsurprisingly, the 2:30pm Tuesday decision will have the biggest direct impact on sentiment for ASX shares.

Will the central bank raise interest rates again to fight inflation or hold it steady to help struggling Australians?

It's a close call, with 55% of economists in a survey last week predicting a rise, while the other 45% tip a hold.

According to Gilbert, last week's updated annual inflation of 7% didn't really give a strong push for either side. 

"This reading offered no real surprises from what the RBA already knew after pausing in April, scaling back expectations for another rate hike this week," he said.

"However, another increase can't be ruled out, with inflation still way above the RBA's target rate of 2% to 3%."

The market is expecting a hold, so a hike on Tuesday afternoon could cause ripples.

"The central bank put rates on hold [in April] to give itself some time to breathe while assessing the state of the economy after its huge tightening cycle," he said.

"Given that this data didn't throw up any shocks, the market would be surprised by a hike this week."

2. US Federal Reserve rate decision

There is also a rate decision pending in the US, which often has a big bearing on Australian shares.

Gilbert is forecasting America will see one last "insurance hike". 

"US inflation is still the most important number in markets right now, driving the Fed and recession risks," he said.

"Although headline inflation fell in March to 5%, the worry was that core inflation jumped to 5.6%, which is why the market is now expecting a 75% chance of another hike this week."

In the US, unemployment is still low, consumer confidence actually increased last month, and the Nasdaq Composite (NASDAQ: .IXIC) is up more than 17% year to date.

But as a counter to that, the issues with the banking industry over there have tightened liquidity and slowed economic growth.

"Despite expectations for another rate hike, the market is still pricing in at least two rate cuts this year despite Jerome Powell saying there would be none," said Gilbert.

"Rate cuts would spell good news for risk assets, particularly for tech and crypto, in the second half of the year."

3. Apple results

The world's biggest company by market capitalisation, Apple Inc (NASDAQ: AAPL), reports its latest numbers this week.

Last week's positive reception to the performance of other tech giants has set the bar high.

"Apple investors' expectations are high, with little to no room for error from the tech behemoth," Gilbert said.

"The worry heading into the report is whether the global slowdown in computing device spending will dampen demand for its Mac computer, which accounts for 10% of Apple's revenue."

The big metric will be iPhone sales, which is Apple's "primary revenue driver". 

"Sales may be boosted by the re-opening of China, a large market for Apple as well as easing supply chain disruptions."

With cost-cutting the theme of the moment throughout the tech industry, Apple will be expected to address its own plans.

"Given the current environment, I'd also expect to hear from Apple's management on fine-tuning operating expenses for the full year to help margins, with its forecast for the next quarter likely to be scrutinised by the street."

Gilbert reminded investors that already Apple's revenue is expected to fall 4.8% and earnings by 6%.

"Apple investors aren't accustomed to being disappointed on earnings, but they were let down last quarter, so a strong result and a beat will be needed in order to underpin Apple's 30% [share price] gain in 2023."

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ASX Share Market News

Two work colleagues looking at a laptop and discussing something.
ASX Share Market News

5 things to watch on the ASX 200 on Tuesday

It looks set to be a positive session for Aussie investors.

Read more »

Mining vehicle at a mine site.
Broker Notes

2 ASX mining companies tipped to jump 52% and 87%

These two companies are primed for growth, brokers say.

Read more »

A doctor appears shocked as he looks through binoculars on a blue background.
Broker Notes

This ASX health technology company could more than double in value: Broker

A major new recruit was a coup for this company.

Read more »

Two brokers analysing stocks.
Broker Notes

Buy, hold, sell: Megaport, Northern Star, Woolworths shares

Experts explain their ratings on these three ASX 200 stocks.

Read more »

A smiling woman sips coffee at a cafe ready to learn about ASX investing concepts.
Broker Notes

Buy, hold, sell: Myer, Develop Global, Netwealth shares

Let's check out some new stock tips from the experts.

Read more »

A man sitting at a computer is blown away by what he's seeing on the screen, hair and tie whooshing back as he screams argh in panic.
ASX Share Market News

These are the 10 most shorted ASX shares

Short sellers have their eyes on these shares.

Read more »

Shot of a young businesswoman using her phone at work, with stock market related images in the background.
ASX Share Market News

5 things to watch on the ASX 200 on Monday

Will the market start the week positively? Here's what to watch.

Read more »

Two colleagues looking at a graph and comparing share prices.
ASX Share Market News

PLS vs BHP: Which ASX 200 mining stock looks better today?

Comparing PLS vs BHP shares on valuation, dividends, and performance—see which ASX 200 mining stock I think comes out on…

Read more »