AUSTRALIAN stocks are expected to open higher today after US markets lifted on Friday with news of car maker Ford's narrower-than-expected loss. They were also buoyed by economic reports suggesting that the troubled US economy may have hit bottom and now may be improving.
The Dow Jones Industrial Average index rose 119.23 points, or 1.50 per cent, to 8076.29, and the broader Standard & Poor's 500 index added 14.31 points, or 1.68 per cent, at 866.23. The Nasdaq composite index gained 42.08 points, or 2.55 per cent, to 1694.29.
Ford booked a first-quarter loss of $US1.4 billion ($A1.96 billion) and said its restructuring was on track to achieve "break-even or better" results by 2011 without help from the US government.
A US Commerce Department report showed that sales of new homes in March dropped 0.6 per cent but were stronger than anticipated.
Another report showed that orders for US-made durable goods fell 0.8 per cent, but were also better than expected.
CommSec chief economist Craig James said the Australian market should open in positive territory on Monday after its counterparts gained in the US and Europe.
"More investors seem to be confident now that we're getting close to the bottom of the global downturn," Mr James said.
"We should see a gain of around 50 points."
He said the market could still expect to have some down days as investors took profits.
On the local market Friday, the benchmark S&P/ASX200 index fell 30.7 points, or 0.82 per cent, to 3712.3, while the broader All Ordinaries was down 27.6 points, or 0.75 per cent.
AMP chief economist Shane Oliver said global markets this week would remain focused on US bank stress tests, along with US data for March quarter GDP and the ISM business conditions survey.
"In Australia, data for private sector credit will be released and will likely remain weak," Dr Oliver said.
On the Australian company front this week, eyes will be on the banking sector when the National Australia Bank reports its first-half results tomorrow and the ANZ Banking Group reports its first-half results on Wednesday. Investment bank Macquarie Group reports its annual results on Friday.
Analysts are tipping bank earnings to fall despite strong revenue momentum from widening loan margins courtesy of the central bank's interest rate cuts.
Speculation is also growing about next month's Federal Budget. "We expect key elements to be a downwards revision to the Government's GDP growth forecast for 2009-10 from plus 0.75 per cent currently to a contraction of minus 0.5 per cent to factor in recession this calendar year," Dr Oliver said.
He also forecast an upwards revision to unemployment rate forecasts to a peak of around 8 or 9 per cent next year and extra fiscal stimulus in the form of pension increases, more help for small business and additional infrastructure spending.
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