It will be another huge week for ASX shares.
Let's take a look at what we have to look forward to, according to eToro market analyst Josh Gilbert:
1. Quarterly inflation figures
Australians young and old will be watching the latest consumer price index numbers, to be published Wednesday morning.
The monthly update saw inflation decline in June to 5.6% from 6.8%, but the quarterlies are considered more accurate and thus carry more weight for the Reserve Bank of Australia.
"The average consensus from Bloomberg is that the quarterly CPI reading will decline to 6.2% from 7% in Q1," said Gilbert.
"But similarly to the monthly readings, the consensus is broad, ranging from a low of 5.8% to a high of 6.7%."
Last week's strong employment numbers means anything above that consensus will crank up the pressure on the central bank to raise interest rates next week.
"It would be surprising not to see at least one more hike from the RBA in its current cycle, with the threat of entrenched inflation still a clear worry for the board," said Gilbert.
"There's no doubt this impending data will be a market mover in the days ahead and may set up another volatile week on the ASX."
2. Rio Tinto half-year results
Also on Wednesday, mining giant Rio Tinto Ltd (ASX: RIO) is bolting out of the gates ahead of the August reporting season with its half-year results.
According to Gilbert, the limp post-lockdown recovery in China is a drag on the performance of resources companies.
"A second quarter production update last week showed its shipments fell by 1% from a year earlier, which could have an impact on its half-yearly results next week," he said.
"It wasn't all bad news, however. Rio still expects full-year iron ore shipments at the upper end of its guidance, which could soften the blow for any weakness in its half-year results announcement next week, if its outlook is positive."
The analyst added that the market expects EBITDA to grow 17% from H2 2022, to hit $12.5 billion.
"Unfortunately for investors, that still may not be enough to stop the miner's typically impressive dividend from being trimmed next week."
Rio Tinto shares are up 1.5% year to date, while paying out a 6.1% dividend yield.
3. Massive week for big tech
Across the Pacific, a bunch of big technology companies popular with Australian investors are reporting this week.
"Earnings weeks don't get much bigger than this, with Microsoft Corp (NASDAQ: MSFT), Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG), Amazon.com Inc (NASDAQ: AMZN) and Meta Platforms Inc (NASDAQ: META) making up over 10% of the S&P 500 Index (SP: .INX)."
Unfortunately Tesla Inc (NASDAQ: TSLA) and Netflix Inc (NASDAQ: NFLX) let the team down with their performances last week.
It's apparent that the market is skittish and nothing but the best numbers trigger volatility.
"Investors will be eagerly awaiting more upbeat numbers from some of the world's biggest names to ensure the tech rally doesn't fade," said Gilbert.
"Last week has taught us that anything but a near-perfect report will be punished, given tech's colossal rally and higher valuations."
The hot topic du jour, artificial intelligence, could hog the limelight in this week's earnings presentations.
"However, Wall Street will want to see the tech giants starting to convert this innovative technology into revenue."
Out of the four tech giants reporting this week, Gilbert reckons "Meta may be the standout" by seeing a year-on-year growth in earnings for the first time since the third quarter of 2021.
"This, combined with the Q3 2023 launch of its new Threads platform, which earned 100 million new users in five days, making it the fastest-growing app of all time, could boost Q3 guidance for Meta," he said.
"This level of success bodes well for the company as it seeks to turn around public sentiment following its patchy foray into the VR app space with the ill-fated Horizon Worlds."
