"The futures market is pointing to a gain of 52 points, or 1 per cent. If we can record that sort of gain, we'll be well on the way to wiping out the losses from the previous week."
Australian stocks lost 2.75 per cent last week, the largest weekly drop since June 2013. The resources sector was the main source of weakness, but did stage a modest recovery before the close. James said that for the early part of this week, the local market was likely to take its lead from the US before it closes for Thanksgiving.
Capital expenditure figures to be released by the Australian Bureau of Statistics on Thursday will be the key domestic data this week - but are set to have a greater impact on the local currency than stocks.
"If we do have an improvement in investment expectations, then the Aussie dollar will certainly key off that," James said.
The listing of the Medibank Private would also be important, he added.
"A number of people have been trying to lighten the load of other shares to be able to take on Medibank. Once that float's out of the road, then we can get down to effectively normal business in Australia."
In the US, the Dow Jones industrial average and Standard & Poor's 500 index carved out all-time highs, extending the market's gains for the week. It was the third record close for the Dow in the week and the fourth for the S&P 500.
The latest records extended a comeback in the S&P 500, which has increased 11 per cent since plunging in mid-October. A strong third-quarter earnings season, on top of a recent string of positive US economic data on housing, jobs and manufacturing, have helped put investors in a buying mood.
- AP
