THE share market is expected to open weaker today after stocks in the US slumped as loan losses continue to mount at JPMorgan and on a disappointing consumer sentiment survey.
But any decline will be limited, and probably short-lived, as the full impact of Commonwealth Bank's first-half unaudited profit figure is yet to be seen in local stocks.
CBA reported just before the market close on Friday that its profit for the six months to December would be close to $3 billion, well above the consensus forecast of analysts.
AMP Capital Investors chief economist Shane Oliver said there were mixed signals for the Australian market.
"The fall in the US, on various factors including the JPMorgan profit, suggesting a fall in our own market,'' Dr Oliver said.
"On the other hand, the CBA announcement caused a rally and we'll have upgrades to bank profits in the weeks ahead.
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"I suspect we'll open down on Monday (but) I doubt anywhere near the weakness of the US.''
On the Sydney Futures Exchange, the March share price index futures contract closed 29 points lower at 4842.
The benchmark S&P/ASX200 index closed up 1.6 points, or 0.03 per cent, at 4899.6 on Friday, while the broader All Ordinaries index added 0.1 point to 4929.5.
In the US on Friday, the Dow Jones Industrial Average fell 0.9 per cent, the broader Standard & Poor's 500 index slipped 1.1 per cent and the Nasdaq composite index declined 1.2 per cent.
While JPMorgan reported a fourth-quarter profit, the lender - regarded as one of the strongest US banks - still posted a loss at its retail banking division and warned it was too soon to say losses on mortgages and other loans had peaked.
The preliminary Reuters/University of Michigan consumer sentiment index for January rose to 72.8 but came in weaker than economists had forecast.
In contrast, both company and economic reports in Australia have reassured investors that the country is now headed for stronger growth.
CBA said first-half profit would rise 44 per cent from a year earlier on solid income growth and as impairment charges declined, which suggests the other major banks will also benefit.
The Australian Bureau of Statistics reported last week that the unemployment rate fell to 5.5 per cent in December and total employment rose to a record.
Dr Oliver said the economic figure to watch this week was the Westpac-Melbourne Institute survey of consumer sentiment for January, out on Wednesday.
"It's the last major piece of data other than the CPI (consumer price index) before the interest rate decision next month,'' Dr Oliver said.
"It's probably held up reasonably well and that's probably consistent with the likelihood of another interest rate hike in February.''
Dr Oliver also said figures out of China on Thursday, including fourth-quarter economic growth and December retail sales and industrial production, would confirm the strength of Australia's biggest export destination.
MTSU poll finds slip in consumer confidenceUS shares drop after six-day gain
