3 things ASX investors should watch this week

Expect a huge few days for your stock portfolio. These are the critical developments to monitor.

A man in a business suit peers through binoculars as two businesswomen stand beside him looking straight ahead at the camera.

Images source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

ASX shares are still waiting for a big push to get the Christmas Rally going.

Let's check out the potential catalysts this week that could drive stocks either way, according to eToro market analyst Josh Gilbert:

1. Australia retail sales figures

On Tuesday, the latest statistics on how the retail sector is going will be revealed.

Activity in that industry is a "key data point" for the Reserve Bank of Australia in deciding what to do with interest rates, according to Gilbert.

The dilemma for Australia this year has been that surveys have shown pessimism among consumers, but sales have kept holding up.

"With retail spending still high, the fear is that this will continue to feed inflation, the very challenge the RBA is trying to combat."

If this week's numbers show Australian households continuing to spend strongly, it will force the Reserve Bank to impose yet another rate hike in December.

Gilbert is hopeful this won't be the case.

"This week's figures may show the signs of a spending slowdown, with a contraction of 0.3% expected," he said.

"This will be a step in the right direction and good news locally."

2. Australia monthly inflation

Reserve Bank governor Michele Bullock last week flagged how she is concerned that inflation in Australia is largely generated within the country.

Wednesday's monthly consumer price index update will show whether this is persisting.

"The good news is that the CPI indicator is expected to ease next week to 5.3% from 5.6% in September," said Gilbert.

"This is a welcome prediction for many, given other deciding factors, such as unemployment and retail sales, remain stubborn."

The trouble for Australia has been that the Reserve Bank has been less aggressive with rate hikes than other comparable nations.

"Whilst other central banks are ending their tightening cycles, Australia seems far from a conclusion. The key for other nations has been higher interest rates," Gilbert said.

"The Bank of England sits at 5.25%, and the [US] Fed sits at 5.25% to 5.5%, both just under 100 basis points higher than the RBA's cash rate."

3. Black Friday and Cyber Monday 

The American tradition of Black Friday seems to have well and truly permeated Australian society.

Gilbert reminded investors that the phenomenon doesn't just end after one day, with Cyber Monday following a couple of days later.

"According to retail groups, the annual sales event is set to eclipse the once-unbeatable Boxing Day sales phenomenon. 

"With consumer habits now well and truly adjusted to go all-in on a late November splurge, retailers now see little choice but to participate or risk missing out on one of the biggest consumer events of the year."

The frenzy won't be showing up in this week's retail sales numbers, but Gilbert is worried it could significantly push up December numbers.

"[It's] something that may well be a key factor in driving ongoing rate rises into the new year."

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 no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors had a rough start to the trading week this Monday.

Read more »

Australian dollar notes in the pocket of a man's jeans, symbolising dividends.
Broker Notes

Where to invest $10,000 into ASX 200 shares this month

Analysts are bullish on these names. Let's find out why they rate them as buys.

Read more »

A steel worker peers out from under his protective headwear which is tipped back on his head as he stares solemnly straight ahead with steel production equipment in the background.
Share Gainers

Why is everyone talking about BlueScope Steel shares on Monday?

It seems Trump's tariffs have winners as well as losers...

Read more »

three businessmen high five each other outside an office building with graphic images of graphs and metrics superimposed on the shot.
Share Market News

3 ASX financial shares being bought up by insiders

Insiders have been loading the boat with these stocks...

Read more »

Man with rocket wings which have flames coming out of them.
52-Week Highs

5 ASX 200 stocks leaping to 52+-week highs in Monday's sinking market

Investors just sent these ASX 200 stocks to new one-year-plus highs. Let’s find out why.

Read more »

A young woman lifts her red glasses with one hand as she takes a closer look at news about interest rates rising and one expert's surprising recommendation as to which ASX shares to buy
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these shares.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why CAR Group, Domino's, JB Hi-Fi, and WiseTech shares are dropping today

These shares are having a tough start to the week. But why?

Read more »

Two lab workers fist pump each other.
Healthcare Shares

Guess which ASX 300 healthcare stock just rocketed 20% on BIG earnings growth

Investors are piling into the ASX 300 healthcare stock on Monday. But why?

Read more »