Between the Bells

The Aussie share market came under pressure this week, as central banks started to act on taming inflation and normalising monetary conditions. 
 
 In this week’s wrap, Sophia covers: 

• (1:40) Why Imugene (ASX:IMU) tumbled
• (1:52) The best and worst performing stocks in the All Ords
• (2:11) The most traded stocks by Bell Direct clients
• (2:40) Big Aussie banks reporting earnings
• (4:20) Three economic news items to watch out for 

Yesterday, the Aussie share market declined 0.2%, which means the market is now tracking 1.8% lower this week.

Looking at the sector performances, the market was mixed. Notably, the real estate sector fell 1.5%, its lowest level in almost two months as investors began to factor in higher borrowing costs for property companies with interest rates rising. 

The best performers included HUB24 (ASX:HUB), Orora (ASX:ORA) and Virgin Money UK (ASX:VUK), all closing over 3% higher. While on the flip side, AVZ Minerals (ASX:AVZ) fell 19% after news that the company threatened legal action against a transfer of shares in Dathcom (which is a company AVZ holds a large stake in). Also declining yesterday were tech shares like Zip (ASX:ZIP), NOVONIX (ASX:NVX) and Tyro Payments (ASX:TYR).

The most traded stocks by Bell Direct clients yesterday included Flight Centre (ASX:FLT), Commonwealth Bank (ASX:CBA) and Firefinch (ASX:FFX).

It was a big trading session over in the US. The Dow and S&P500 saw their biggest daily gains since 2020. The Dow rose more than 900 points, the S&P500 was up nearly 3% and the Nasdaq lifted an impressive 3.2%. As expected, the central bank announced a 50 basis point increase, or 0.5% increase in the benchmark interest rate, its biggest rate increase since 2000. And the Fed noted that it would also start reducing its balance sheet in June.

What to watch today:

• The SPI futures are suggesting the market is set to open 0.43% higher.
• Reporting wise, National Australia Bank (ASX:NAB) is one to watch today, as the banking giant has released its half-year results this morning. 
• Other companies releasing results today include Eclipx Group (ASX:ECX) and Virgin Money UK (ASX:VUK).
• Economic news wise, Australia’s balance of trade for March will be released today. That’s the difference between what we export vs. what we import. 
• Moving to commodities, the oil price jumped 5% as the European Union spelled out plans to phase out imports of Russian oil.  The gold price rose as both the US dollar and US Treasury yields fell following the Federal Reserve chairman Jerome Powell’s comments that inflation was too high, making bullion more appealing.  
• If you’re a shareholder of Gold Road Resources (ASX:GOR) or Arena REIT (ASX:ARF) you can expect to receive your dividend payment today. And Vita Group (ASX:VTG) is set to go ex-dividend today.
• Iress (ASX:IRE), Rio Tinto (ASX:RIO) and QBE Insurance Group (ASX:QBE) are holding their AGMs today.

Trading Ideas:

• Citi have maintained its Buy rating on ARB Corp (ASX:ARB) however with a reduced price target, from $48.15 to $46.63. At its current share price $33.61, this implies about 39% share price growth in a year. 
• Trading Central has a bearish signal on Shaver Shop Group (ASX:SSG) indicating that the stock price may fall from the close of $1.11 to the range of $0.76 - $0.82 in the next 369 days according to standard principals of technical analysis.  

Yesterday the market finished lower for the second straight trading session, down 0.4% or around 30 points. The market was steady yesterday while awaiting the RBA’s interest rate decision. And the central bank raised the cash rate by 25 basis points to 0.35%. The market was waiting to see whether rates would be lifted or if the RBA would hold off for another month, however it was wildly expected that the RBA would lift the cash rate by 15 basis points, so the rise of 25 basis points was greater than market consensus, and it is also the first rate hike in 11 years. Now, inflation has been rising at its fastest pace in 20 years, so the RBA believes it’s an appropriate time to begin the process of normalising monetary conditions, flagging that there is also evidence that wage growth is picking up. Following the announcement, the market had an almost instant reaction, dropping significantly, however the market then lifted again about 30 minutes after the announcement. 

Sectors wise, real estate took the biggest hit yesterday, while tech gained the most. These are the two sectors however, that are more likely to pull back, with the cash rate hike. 

Looking at the ASX200 leaderboard, Magellan Financial Group (ASX:MFG) was the best performer, gaining 5% after reports that Nikki Thomas, formally a fund manager at MFG, is likely to permanently replace Hamish Douglas as CIO. And the company’s new chief executive is expected to be appointed next month. Tech stocks were also higher yesterday with Zip (ASX:ZIP), Appen (ASX:APX) and Block (ASX:SQ2) taking the lead. 

The most traded stocks by Bell Direct clients yesterday included Westpac (ASX:WBC), Scentre Group (ASX:SCG), Pilbara Minerals (ASX:PLS) and Australia and New Zealand Banking Group (ASX:ANZ). 

Overseas, European markets finished higher, after closing lower a day earlier, after a sudden “flash crash” in the Sweden’s Stockholm OMX 30 index, which fell 8% at one point, before rising again and regaining most of those losses. There was also weak economic data from China and Germany, however European markets still closed in the green. US equities also closed higher, ahead of the Federal Reserve’s policy decision tonight. It is widely expected that the Fed will tonight raise rates by 50 basis points. The Dow Jones closed up 0.2%, the S&P500 up 0.5% and the Nasdaq up 0.2%. 

What to watch today:

• In line with New York, the SPI futures are suggesting the Australian market will rise 0.59% at the open this morning. 
• In commodities, oil is trading lower, with a potential ban on Russian oil from the EU. Germany has said they’re willing to support an immediate embargo on Russian oil, as the EU say they plan to tighten sanctions against Russia. Meanwhile the price of gold is higher, while seaborne iron ore is trading flat.
• Watch out for Koba Resources (ASX:KOB) as it lists on the ASX today. 
• Also keep watch of ANZ, the bank is set to release its half-year results this morning. 
• Keep watch of AGL Energy (ASX:AGL) share price movements. Yesterday, tech billionaire Mike Cannon-Brookes acquired an 11% stake in AGL, becoming its largest shareholder. He aims to stop AGL from burning coal, saying he’ll vote against the demerger with Accel Energy. 

Trading Ideas:

• Bell Potter maintain their Buy rating on Select Harvests (ASX:SHV) after the company provided updated guidance parameters for FY22. Bell Potter have increased their price target from $6.60 to $7.40. SHV last closed at $6.20, implying 19.4% share price growth in a year. 
• Trading Central have identified a bearish signal in Motorcycle Holdings (ASX:MTO), indicating that the stock price may fall from the close of $2.78 to the range of $2.66 to $2.68, over 21 days, according to the standard principles of technical analysis. 

Yesterday, the Aussie share market experienced a broad sell off, with the benchmark ASX200 index falling 1.2% to 7,347 points. 

Sectors wise, all sectors were in the red. The hardest hit sectors were the tech, real estate, and communication services sectors, which all fell more than 2%.

Looking at the ASX200 leaderboard, corporate bookmaker, PointsBet (ASX:PBH) led the way, advancing 5.7%, after Goldman Sachs retained its buy rating on the stock, with a $5.78 price target. That’s an 80% premium to its current share price. Also performing well were travel stocks Qantas (ASX:QAN), Flight Centre (ASX:FLT) and Webjet (ASX:WEB), which was likely due to Qantas’ trading update, which revealed that domestic travel numbers are rebounding faster than expected. On the other end, Imugene (ASX:IMU) was the worst performing stock, down 13.6% after the biotech company scraped its supply agreement with MSD, which is a tradename of Merck & Co.

The most traded stocks by Bell Direct clients yesterday included the Vanguard Australian Shares Index ETF (ASX:VAS), Lake Resources (ASX:LKE) and Pilbara Minerals (ASX:PLS).

On Wall Street, the benchmarks started the new trading week lower, however by the late afternoon, the Dow, S&P500 and Nasdaq all managed to stage a late comeback to close in positive territory. Volatility in the bond market likely contributed to the swings in stocks. When the 10-year Treasury yield broke through 3%, which it hasn’t done since November 2018, this signalled that the bond market selloff had hit its peak and most likely wouldn’t continue until we get beyond the Fed’s update on Wednesday. 

What to watch today:

• Despite the positive close in the US, if you go by the SPI futures, the Aussie share market is set to open 0.34% lower this morning.  
• Economic news wise, all eyes will be on the RBA. The Reserve Bank is widely expected to announce a 15 basis point rate increase when it releases a post-policy meeting statement at 2.30pm AEST.
• All eyes will also be on Woolworths (ASX:WOW) as the retail giant is set to release its third quarter sales update. 
• In commodities, the oil price reversed its losses, to trade slightly higher, around US$105 a barrel. This was off the back of fears that supply might be impacted by a potential European Union ban on Russian crude. The gold price slumped more than 2%, as increased prospects of faster rate hikes by the Fed Reserve lifted both US Treasury yields and the US dollar. And the spot iron ore price is trading nearly 3% higher at US$142 a tonne.
• There are two new companies debuting on the Aussie share market today. Firstly, share advisory services company, Equity Story Group. It will be trading under the ticker code EQS. And secondly, gold, silver and copper exploration company, Sierra Nevada Gold. Its ticker code SNX.
• If you’re a shareholder of Brickworks (ASX:BKW), you can expect to receive your dividend payment today.
• Both Santos (ASX:STO) and TPG Telecom (ASX:TPG) are holding their AGMs today.

Trading Ideas:

• Bell Potter have maintained its Speculative Buy rating on PointsBet (ASX:PBH) with a slightly reduced valuation, from $7.50 to $6. At its current share price of $3.17, this implies 89% share price growth in a year. 
• Trading Central has a bearish signal on Michael Hill (ASX:MHJ) indicating that the stock price may fall from the close of $1.10 to the range of $0.56 - $0.66 in the next 142 days according to standard principals of technical analysis.  

Week-to-date the ASX200 closed 0.5% in the red, however on Friday the market rebounded, recovering from the broad sell-off earlier in the week, and closing over 1% higher.

All industry sectors posted gains. Although the tech sector declined the most overall last week, on Friday tech regained some of those losses, and was the best performing sector, managing to lift 2.25% at the close. That was following the tech rally on Wall Street and tech stocks like Zip (ASX:ZIP), Tyro Payments (ASX:TYR), Life360 (ASX:360), Codan (ASX:CDA) and EML Payments (ASX:EML) all advancing. 

The top performer on Friday was PointsBet Holdings (ASX:PBH), which lifted 10.7% after reporting a 54% increase in turnover. And Goldman Sachs have retained their buy rating on PBH with a $5.78 price target, so keep watch of its share price today. Meanwhile, the worst performing stocks were Dominos (ASX:DMP), ResMed (ASX:RMD) and Pro Medicus (ASX:PME). 

The most traded stocks by Bell Direct clients on Friday, were Aristocrat Leisure (ASX:ALL), Mount Gibson Iron (ASX:MGX) and the Vaneck Emerging Income Opportunities ETF (ASX:EBND).

In global markets, European stocks closed higher after a busy day of earnings results. Meanwhile, Eurozone inflation hit a record high in April, for the sixth month in a row. Annual inflation in Europe reached 7.5%, while GDP grew 5% year-on-year. So, investors are now waiting to see how the European Central Bank will react. Over in the US, there was a broad sell-off on Wall Street, with all three major benchmarks falling. This follows a number of headwinds, including the Fed’s monetary tightening, rising inflation and interest rates, the ongoing concerns around the Ukraine war, and COVID cases in China, which continue to rise – these factors have all played a part. The Dow Jones tumbled more than 900 points, closing 2.8% lower. The S&P500 dropped 3.6%, and the Nasdaq closed more than 4% lower, finishing April with its worst monthly performance since October 2008, down approximately 13% in April overall. 

What to watch today:

• Following US equities, the SPI futures are suggesting the local market will fall 1.27% at the open this morning. 
• In economic data, ANZ’s data on job advertisements for April will be released today. And today investors will be trading cautiously, with the expectation of an interest rate hike tomorrow when the RBA meets. 
• In commodities, oil prices are trading lower, amid supply disruptions and the demand slowdown in China. So watch stocks such as Santos (ASX:STO) and Woodside Petroleum (ASX:WPL). 
• Also today watch gold mining stocks, such as Northern Star Resources (ASX:NST) and Newcrest Mining (ASX:NCM), as the gold price is trading higher. Meanwhile, seaborne iron ore has fallen, trading around US$150 a tonne. 
• New listings on the ASX today include Sarama Resources (ASX:SRR) and Solstice Minerals (ASX:SLS). 

Trading Ideas:

• Bell Potter maintain a BUY rating on Nitro Software (ASX:NTO), and have lowered their price target from $2.75 to $2.50. NTO last closed at $1.37, implying 82.5% share price growth in a year. 
• Trading Central have identified a bullish signal in Firefinch (ASX:FFX), indicating that the stock price may rise from the close of $1.12 to the range of $1.43 to $1.51, over 18 days according to the standard principles of technical analysis. 

The Aussie share market declined 1.6% this week (Mon-Thu), with nearly all industry sectors trading in the red.

In this week’s wrap, Sophia covers:

• (0:11) How the inflation rate impacts the share market
• (1:09) What happens when the RBA lifts the interest rate
• (3:29) City Chic Collective (ASX:CCX) rising after strong sales growth
• (4:00) Why EML Payments (ASX:EML) fell a massive 44%
• (4:18) The most traded stocks by Bell Direct clients
• (4:45) Two economic news items to watch out for

Yesterday, the ASX200 lost 56 points or 0.8% to close at 7,261 points. Aussie investors digested the latest inflation reading, which came in at 5.1%, that’s the highest reading since the introduction of the goods and services tax (GST) in the early 2000s. The jump in consumer prices reflected soaring fuel prices as well as surging building costs. The higher than expected increase has compelled economists to bring forward their expectation for the RBA’s imminent interest rate rise, from June to next Tuesday’s meeting.

Moving to the sector performances, the majority of the market closed in the red, with the tech sector down the most, taking a strong lead from the Nasdaq’s big tech sell off. Looking at the ASX200 leaderboard, Life360 (ASX:360) took a bit of a tumble, falling 29% after the tech platform abandoned its plans to list in the US. Whitehaven Coal (ASX:WHC) was the best performer, benefiting from the rising coal price.    

The most traded stocks by Bell Direct clients yesterday were Syrah Resources (ASX:SYR), Mount Gibson Iron (ASX:MGX) and Bank of Queensland (ASX:BOQ).

Moving to the US, the three benchmarks struggled to find direction, with the market closing mostly higher. Both the Dow and S&P500 closed about 0.2% higher, while the Nasdaq closed flat at its 2022 low of 12,489 points. In terms of company results, Microsoft and Visa jumped higher after strong earnings reports. While, Alphabet and Boeing posted losses after their results missed consensus estimates.

What to watch today:

• The Aussie share market is set to open 0.7% higher this morning, going by the SPI futures.  
• Medical device company, Cochlear (ASX:COH) will be on watch today, following news that it has agreed to pay $170m to acquire Oticon Medical. Keep in mind that while this acquisition is expected to add anywhere from $75m to $80m to annual revenue, the company is currently loss making. 
• Watch Coles Group (ASX:COL) today, as it’s set to release its quarterly results today. 
• Economic news wise, investors will digest the latest import and export prices for quarter one.
• In commodities, the oil price treaded between gains and losses as the US dollar soared, while the gold price fell to a two-month low. And the spot iron ore price is trading flat at US$137 a tonne.
• Scaffold and formwork supplier, Acrow Formwork and Construction Services (ASX:ACF) is set to go ex-dividend today. 

Trading Ideas:

• Bell Potter have maintained its BUY rating on Australian agricultural chemical company, Nufarm (ASX:NUF) and have increased its price target from $6.40 to $7.85. At its current share price of $6.59, this implies 20% share price growth in a year.
• Trading Central has a bullish signal on BNPL company, Splitit Payments (ASX:SPT) indicating that the stock price may rise from the close of $0.21 to the range of $0.24 - $0.26 in the next 40 days according to standard principals of technical analysis.  

Yesterday, the local market yesterday was trading in negative territory, ignoring the positive lead from Wall Street and closing with a loss of 2% or 155 points.

There is a lot of focus recently on the impact that the lockdowns in China will have on the demand outlook of commodities, which weighed down on the market. The materials sector suffered the greatest loss, shedding more than 5%, following a decline in commodity prices. A drop in oil prices also saw energy shares also suffer heavy losses, with the sector closing 4% lower. And all 11 industry sectors closed in the red. 

Mining shares accounted for most of the worst performers, however the stock that declined the most was EML Payments (ASX:EML), which dropped 38.6% after cutting its EBITDA guidance by 8%, revenue guidance by 4% and profit guidance by 6.6%. Meanwhile, stocks that managed to post gains included Virgin Money (ASX:VUK), Block (ASX:SQ2) and Nufarm (ASX:NUF). 

The most traded stocks by Bell Direct clients yesterday included BHP Group (ASX:BHP), the Vanguard Australian Shares ETF (ASX:VAS), Lake Resources (ASX:LKE), Bank of Queensland (ASX:BOQ) and Northern Star Resources (ASX:NST).

There was broad selling in New York, with 10 of the 11 S&P500 industry sectors closing lower, while higher oil prices lifted energy shares. A big tech-sell off saw the Nasdaq hit a fresh 52- week low, closing 4% lower and retreating further into bear market territory. The Dow Jones closed 2.4% lower and the S&P500 closed 2.8% lower.

What to watch today:

• The Australian share market is set to extend losses. The SPI futures are suggesting a sharp drop of 1.47% or 107 points at the open this morning.
• In economic data, today we’ll receive a key update on inflation. The inflation rate will be released at 11:30am AEST, and this rate measures the change in prices of goods and services for consumers. So, this will give us an indication of consumer price pressures and will also determine expectations for rate rises. Inflation is expected to lift above the RBA’s 2-3% target range for the first time since 2010, which is the last time rates rose. 
• In commodities, oil prices have lifted as China’s central bank pledged to increase support for their economy. Iron ore prices are in the red, while gold is trading higher, following a slight pullback in the US dollar and lower Treasury yields. 

Trading Ideas:

• Bell Potter maintain their Buy rating on Mineral Resources (ASX:MIN) with a $70 price target. Mineral Resources last closed at $54.67, implying 28% share price growth in a year. 
• Trading Central have identified a bullish signal in AUB Group (ASX:AUB), indicating that the stock price may rise from the close of $22.90 to the range of $24.70 - $25.10 over 16 days, according to the standard principles of technical analysis. 

The local market took a bit of a hit in Friday’s trading session, falling 1.6%. That’s the biggest fall we’ve seen in over two months, and this followed Federal Reserve chairman Jerome Powell indicating that US interest rates are poised to rise higher and faster.

Sectors wise, all sectors came under pressure, in particular the materials and tech sectors, which both fell over 2.5%. The healthcare sector however provided the market with some relief, rising 0.5%.

Looking at the ASX200 leaderboard, hospitality and liquor group company, Endeavour Group (ASX:EDV) was the biggest gainer, lifting 1.7%, and CSL rose 1.5% after announcing a new $US4 billion debt raising to help fund its $16.4 billion acquisition of Vifor Pharma. Meanwhile, the worst performers were Megaport (ASX:MP1), Paladin Energy (ASX:PDN) and Pointsbet (ASX:PBH).

The most traded stocks by Bell Direct clients last Friday included BHP Group (ASX:BHP), Lake Resources (ASX:LKE) and the BetaShares Geared Australian Equity Fund ETF (ASX:GEAR).

Moving to the US, all three benchmarks closed in the green. The Dow managed to erase its 500-point intraday loss to close 200 points higher. This follows big tech names like Microsoft, Alphabet and Meta rallying in the afternoon. Twitter also soared after its board accepted Tesla CEO Elon Musk’s offer to take it private. 

What to watch today:

• Despite the positive session in the US, if you go by the SPI futures, the Aussie share market is set to open 0.3% lower this morning.  
• In commodities, the growing worries about global energy demand due to the prolonged lockdowns in Shanghai saw the WTI Crude oil price fall below US$100 a barrel. The gold price also dropped, as the potential for aggressive policy tightening by the US Fed weighed down on the haven’s appeal. The same can be said for uranium, which is trading over 8% lower. And the spot iron ore price is trading 0.7% lower at US$145 a tonne.
• Australian lithium exploration company, Lithium Plus Minerals will be debuting on the Aussie share market today. It will be trading under the ticker code LPM.
• If you’re a shareholder in global tech company, Adacel Technologies (ASX:ADA), you can expect to receive your dividend payment today.

Trading Ideas: 

• Bell Potter have maintained its BUY rating on coal mining company, Bathurst Resources (ASX:BRL) and have increased its price target from $1.25 to $1.63. At its current share price of $1.12, this implies 45% share price growth in a year.
• Trading Central has a bearish signal on South32 (ASX:S32), indicating that the stock price may fall from the close of $4.84 to the range of $4.45 - $4.53 in the next 24 days according to standard principals of technical analysis.  

The Aussie share market advanced 0.9% this week (Mon-Thu). Most industry sectors posted gains, except for the tech and materials sectors which came under pressure.

In this week’s wrap, Sophia covers:

• (0:56) Why Ramsay Health Care (ASX:RHC) gained 29%
• (2:32) Megaport (ASX:MP1) falling after disappointing results
• (2:51) The top stocks in the All Ords this week
• (3:35) The most traded stocks by Bell Direct clients
• (3:52) Two stocks to consider if you're buying the dip
• (5:41) Three economic news items to watch out for