After a topsy turvy week, Australian shares fell a little short of closing at a record high on Friday as investors wait for more direction about whether the US Federal Reserve will continue to cut interest rates.

On Friday, the ASX 200 index closed a skinny 0.1% or 9.3 points lower at 8511.43 points and fell 0.2% for the week, even though the index came just 21 points shy of hitting a new record.

There was plenty of volatility on Friday alone with markets choppy in the lead up to new US January jobs figures which could prove crucial for when and if the Fed next cuts official rates.

Five of the 11 sectors were lower, with energy stocks falling the most as the index fell in the morning.

The index then rebounded before turning slightly negative as the market moved towards a close.

Banks retreat before hitting record highs

That led to some interesting results with the banks retreating early before Commonwealth Bank (ASX: CBA) set a new closing record, up just 0.1% or 3c to close at $162.67 and leading the other banks ANZ (ASX: ANZ), NAB (ASX: NAB) and Westpac (ASX: WBC) to marginal positive closes as well.

It was a very different story for the flagging energy sector after a large fall in the oil price overnight that sent Brent crude below $US75 a barrel.

Beach Energy (ASX: BPT) was the worst hit with its shares diving 5.2% to $1.37, Woodside (ASX: WDS) shares fell 0.8% to $24.64 and Santos (ASX: STO) shares fell 0.9% to $6.98.

Coal stocks weren’t immune from the energy rout with Yancoal (ASX: YAL) shares down almost 6% and Whitehaven Coal (ASX: WHC) down 3.9% to $5.98.

Lithium miners crunched

It was also a less than inspiring day for lithium miners after reports that Chinese electric vehicle battery maker CATL had restarted its lepidolite mine in Jiangxi.

That helped to send Liontown Resources (ASX: LTR) shares down by 4.4% to 66c, while Pilbara Minerals (ASX: PLS) shares shed 4.3% to $2.23 and shares in Patriot Battery Metals (ASX: PMT) dropped 5.9% to 32¢.

Once one of the Australian market’s growth stock darlings, shares in Domino’s Pizza (ASX: DMP) jumped an impressive 21.3% to $35.93 after the company shrank by closing 205 loss-making stores, mostly in Japan.

Dominos shrinks to greatness

Investors liked the decisive action to unwind the company’s initially successful Covid era expansion which is expected to generate annual savings of $15.5 million.

Higher input costs and falling demand threw some “sub-optimal” stores into making losses but investors also warmed to the news that the company had hit same store sales growth of 4.3% in the first five weeks of trade since the start of the year.

Nick Scali (ASX: NCK) shares added an impressive 10.5% to $18 after the furniture company exceeded guidance with a net profit of $36 million for the December half.

Shares in Sigma Healthcare (ASX: SIG) also reacted positively to good news with a 3.2% rise to $2.92 after it upgraded full-year guidance for earnings before interest and tax, due to a boost from its Chemist Warehouse supply contract.

The two companies are merging this month.

REA Group (ASX: REA) shares continued to rise, up 2.8% to $262.12, with positive broker reports combined with a strong set of results that saw revenue jump 20% year-on-year.

Not so fortunate were shareholders in News Corp (ASX: NWS) who saw their investment backtrack 3.8% to $54.14 after the stock rallied on Thursday after reporting stronger quarterly earnings

Small cap stock action

The Small Ords index shed 0.15% for the week to close at 3229.1 points.

ASX 200 vs Small Ords

The week ahead

A combination of plenty of corporate news and some significant statistical releases should keep investors on their toes in the coming week.

In the US the main game will be three inflation releases which will play into the ongoing guessing game about how many official interest rate cuts are in store.

A string of fourth quarter earnings for US companies will also move the market, with just some of the names reporting McDonald’s, Coca-Cola, Barrick, Kraft Heinz and Moderna.

Will China avoid deflation?

Chinese price releases will also be closely watched with recent indications that the country is close to deflation hopefully put to rest by the effect of some government stimulus.

Australian home lending numbers are expected to show that investment lending is starting to really pick up while home lending is expected to remain more subdued.

The other big local news is the continuing profit reporting season with some of the larger names including CSL, Commonwealth Bank, Macquarie, Seven West Media, ASX, Northern Star, South 32, Cochlear and Treasury Wine Estates.

By the end of the week investors will start to develop a bit of a theme as to how the reporting season is progressing and obviously individual stocks will be rising and falling on the commentary based on their results.

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