Between the Bells

The local market advanced slightly higher yesterday, up 0.1% to 7,569 points, just 0.8% off reaching its record high. Sectors wise, the healthcare sector led the market, boosted by a sizeable jump in Ramsay Health Care (ASX:RHC)’s share price. 

RHC, the second largest Australian-listed health company lifted an impressive 24% to $80 per share, after receiving a takeover proposal from private equity company, KKR. On the flip side, investment platform, HUB24 (ASX:HUB) fell the most, down 6.5% following some brokers responding to the company’s latest quarterly update, with a few trimming their price targets. 

The most traded stocks by Bell Direct clients yesterday included Westpac (ASX:WBC), Lake Resources (ASX:LKE) and Ramsay Health Care (ASX:RHC). 

The US market was divided. The Dow managed to gain about 250 points, off the back of strong results from Procter & Gamble, while the Nasdaq was dragged down by Netflix’s disappointing results, where it saw its first subscriber loss in more than 10 years. As well as company results, investors were keeping a close eye on the 10-year Treasury yield which retreated on Wednesday.

What to watch today:

• Despite the mixed session in the US, if you go by the SPI futures, the Aussie share market is set to open 0.40% higher this morning.  
• Keep an eye on BNPL stock Zip (ASX:Z1P), the company will be releasing its third quarter update this morning. And as at the start of today’s trading session, Zip’s ticker code will change from Z1P to ZIP. 
• Other companies set to release results today include BHP Group (ASX:BHP), Brambles (ASX:BXB), Challenger (ASX:CGF), Evolution Mining (ASX:EVN), Stockland (ASX:SGP) and Santos (ASX:STO).
• In commodities, the oil price rebounded following a drop in US oil inventories and concerns over tight supplies. The gold price traded slightly higher at US$1,957 an ounce. While the spot iron ore price is trading 2.7% lower at US$146 a tonne.
• There are two new companies debuting on the Aussie share market today. Firstly, Australian battery metals exploration company, Pure Minerals, its ticker code is PR1. And secondly, Perth-based crop nutrition company RLF AgTech, which will be trading under the ticker code RLF.
• There are also a few companies paying their dividends today. These include Lovisa (ASX:LOV), Rio Tinto (ASX:RIO), Cochlear (ASX:COH) and Austal (ASX:ASB).
• Lastly, capital market company, Plato Income Maximiser (ASX:PL8) and MFF Capital Investments (ASX:MFF) are set to go ex-dividend today.

Trading Ideas:

• Bell Potter have maintained its BUY rating on chemical manufacturing company, DGL Group (ASX:DGL) and have increased its price target from $3.50 to $4.30. DGL continues to validate its chemicals logistics vertical and despite record seasonal tailwinds, Bell Potter believe the company has several levers to grow earnings in financial year 2023. 
• Trading Central has a bearish signal on Rio Tinto (ASX:RIO), indicating that the stock price may fall from the close of $118.30 to the range of $95 - $100 in the next 32 days according to standard principals of technical analysis. 

Stocks rallied in yesterday’s session, with energy and materials pulling the market higher. The ASX200 closed 0.6% higher amid strong commodity prices, including the price of iron ore, with hopes of additional stimulus from China, a top importer, now that China is seeing risks of an economic slowdown following its COVID-19 lockdowns. The big miners and energy stocks gained yesterday, rising higher with the increase in oil prices, as outages in Libya deepened concern over tight global supply. Financials were up 0.9%, with the major four banks all in the green. Gold stocks also aided sentiment, extending gains into a seventh session. The top performing stock yesterday was biotech company Imugene (ASX:IMU), followed by Cleanaway Waste Management (ASX:CWY), which hit a new 52-week high yesterday. 

The most traded stocks by Bell Direct clients yesterday were the Bank of Queensland (ASX:BOQ), Macquarie Group (ASX:MQG), Core Lithium (ASX:CXO) and BHP Group (ASX:BHP). 

European stocks closed lower on Tuesday as investors’ attention was focused on the latest developments in the Russia-Ukraine war. US equities closed higher, with all three major benchmarks in the green. The Dow closed 1.5% higher or up almost 500 points, the S&P500 rose 1.6%, and tech rallied with the Nasdaq closing 2.2% higher. However, this morning the Nasdaq futures for today have fallen, after Netflix shares dropped 25% in extended trading after disappointing results, reporting a loss of 200,000 subscribers in the first quarter. 

What to watch today:

• The Aussie share market is set to rise 0.62% at the open, according to the SPI futures. 
• Keep watch of Rio Tinto (ASX:RIO) and Beach Energy (ASX:BPT). Both companies will release their quarterly production reports today. 
• Watch Ramsay Health Care (ASX:RHC), as the private hospital operator has received a takeover approach from private equity company KKR. It’s a non-binding offer of $88 per share to acquire the company, so this bid is at a 37% premium to where RHC shares last traded, and it values the company at over $20 billion. 
• In commodities, oil has dropped overnight, trading almost 6% lower at around US$102 per barrel, ending a four-day winning streak, following concerns of falling demand despite the tight supply. So watch energy stocks today. The price of gold also dropped overnight, as a strong US dollar and soaring treasury yields have worried investors. So gold miners may come under pressure today, including stocks such as Evolution Mining and Northern Star Resources. Meanwhile the iron ore price is flat. 

Trading Ideas:

• Bell Potter maintain its Buy rating on Life360 (ASX:360), a market leading app for families. Their price target remains unchanged at $10. 360 last closed at $5.37, implying 86.2% share price growth in a year. 
• Trading Central have identified a bullish signal in QBE Insurance (ASX:QBE), indicating that the stock price may rise from the close of $12.26 to the range of $13.80 to $14.20, over 29 days, according to the standards principles of technical analysis. 

The local market advanced 0.6%, with nearly all sectors posting gains. The materials sector led the way, up an impressive 1.3%, while the financial sector was the only sector to post a loss.

Looking at the ASX200 leaderboard, travel stocks soared. Qantas (ASX:QAN) lifted 7%, its best performance since November 2020, as investors showed renewed confidence for this beaten down sector of the market. Meanwhile, the worst performer was Bank of Queensland (ASX:BOQ), down 6.3%, after the company reported results that disappointed the market and included cautions about a squeeze on margins. 

The most traded stocks by Bell Direct clients last Thursday, they included Uniti Group (ASX:UWL), NAB (ASX:NAB) and Lake Resources (ASX:LKE).

Moving to the US, well it’s a big week of earnings for the market. Some big names reporting this week include Tesla, Netflix, United Airlines, Procter and Gamble, Johnson & Johnson, and American Express. On Monday however, all three benchmarks closed slightly lower with rising commodity prices heightening concerns about inflation. The 10-year Treasury yield also reached its highest level since late 2018, at one point trading at 2.8%.

What to watch today:

• Despite the US market slightly falling, the futures are suggesting that the Aussie market is set to open 0.13% higher this morning.  
• In commodities, the oil price rose off the back of outages in Libya deepening concerns over tight supplies. The gold price hit a one-month high on Monday, nearly reaching the $2,000 an ounce level, as concerns around the Russia-Ukraine conflict and rising inflationary pressure increased the appeal of the safe-haven asset. And the spot iron ore price is trading 2% higher at US$150 a tonne.
• In economic news, the RBA will release its meeting minutes for April. The RBA noted that Australia's inflation has increased, and a further increase was expected, however, the board said it wanted to see actual evidence that the price level is sustainably within the 2 to 3% target range before it considers increasing interest rates.
• Chartered accounting network company, Kelly Partners Group (ASX:KPG) is set to go ex-dividend today.

Trading Ideas:

• Bell Potter have maintained its BUY rating on Allkem (ASX:AKE) with a trimmed price target, from $18.05 to $17.53. AKE’s current share price is $13.52 so this implies about 30% share price growth in a year. 
• Trading Central has a bullish signal on drilling services company, DDH1 (ASX:DDH), indicating that the stock price may rise from the close of $1.07 to the range of $1.13 - $1.15 in the next 40 days according to standard principals of technical analysis. 

Yesterday, the consumer confidence index fell by 0.9% month-on-month in April, down for the fifth straight month, and this follows inflation rising and prospects of higher interest rates, which has dampened sentiment further. 

The Aussie share market gained 0.34% with all sectors in the green, except the real estate, tech, and communication services sectors. 

Looking at the ASX200 leaderboard, AVZ Minerals (ASX:AVZ) topped the list, gaining 11.7% after the company received a positive technical opinion from the Department of Mines. This was the fourth and final requirement for a mining licence, meaning the company may soon be awarded a mining licence for its flagship project. And on the other end, cement and lime producer, Adbri (ASX:ABR) fell 4%. Morgan Stanley hold a pessimistic view on the stock due to adverse weather and higher energy costs. 

The most traded stocks by Bell Direct clients yesterday included Lake Resources (ASX:LKE), Stockland (ASX:SGP) and Regis Resources (ASX:RRL).

Moving to the US, all three benchmarks closed in the green, with the Nasdaq and S&P500 snapping their respective three-day losing streaks. Stocks rallied, despite surging inflation numbers, as corporate earnings season kicked off.

What to watch today:

• Following the positive session in the US, the futures are suggesting that the Aussie market is set to open 0.23% higher this morning.  
• In commodities, the oil price continues to rise, up over 3% to US$104. This comes as investors become more discouraged about the peace talks between Russia and Ukraine, further fuelling concerns about tight supplies. The gold price hit a one-month high as high inflation boosts its appeal. And the spot iron ore price is trading 2% higher at US$148 a tonne.
• In economic news, the unemployment rate will be released today at 11:30am AEST. As a reminder, the unemployment rate in February fell to 4%, which was only the third time in history that unemployment has fallen to that level. In the RBA’s statement on monetary policy in February, they noted that the unemployment rate is forecast to decline gradually over the forecast period, to 3.75% by the end of 2023. So, consensus is expecting March’s reading today to come in at 3.9%. 
• Coal mining company, New Hope Corporation (ASX:NHC) and accounting services company Diverger (ASX:DVR) are set to go ex-dividend today.  

Trading Ideas:

• Bell Potter have maintained its BUY rating on technology hardware and equipment company EROAD (ASX:ERD) however have reduced its price target from $5.95 to $5. ERD’s current share price is $2.71, so this implies 85% share price growth in a year. 
• Trading Central has a bullish signal on Bapcor (ASX:BAP), indicating that the stock price may rise from the close of $6.46 to the range of $6.90-$7 in the next 10 days according to standard principals of technical analysis. 

All sectors were down yesterday as commodity prices weakened. Long term interest rates also continued to push higher. Weighing down on the market yesterday was NAB’s business confidence survey, which increased to a 5- month high, while business conditions saw the largest jump since June 2020. The rise in conditions were driven by a large increase in retail, finance, business and property. And labour costs hit a record high, further dampening sentiment. Meanwhile the 10-year government bond reached its highest level since 2015. 

The top performer was Regis Resources (ASX:RRL), boosted by the rise in the gold price, as well as a bullish broker note from Credit Suisse. Other gold miners also advanced, including St Barbara (ASX:SBM), Ramelius Resources (ASX:RMS), and Evolution Mining (ASX:EVN). Meanwhile, the healthcare sector declined 1.4% yesterday. Biotech company Imugene (ASX:IMU) was down the most. Bell Potter have a Speculative Buy rating on IMU. 

The most traded stocks by Bell Direct clients yesterday were Lake Resources (ASX:LKE), Fortescue Metals (ASX:FMG), Wesfarmers (ASX:WES), South32 (ASX:S32) and Pilbara Minerals (ASX:PLS). 

Overnight, the latest US inflation reading came in at its highest level since 1981. Consumer prices in March surged 8.5% from a year ago, higher than expected, and core CPI climbed 0.3% in March. The high inflation numbers raised expectations of tighter monetary policy from the Fed, which investors fear could slow the economy. The major benchmarks closed in the red. The Dow, S&P500 and Nasdaq down all down 0.3%. 

What to watch today:

• Following US equities, the SPI futures are suggesting the local market will slightly fall 0.09% at the open this morning. 
• In commodities, the oil price has jumped almost 8%, following relief about demand in China after Shanghai eased some virus restrictions. 
• Gold is also trading in the green, following the US inflation reading. Meanwhile seaborne iron ore is trading slightly lower. 
• In economic data, consumer confidence data will be released today by Westpac at 10:30am AEST.
• Iluka Resources (ASX:ILU) will hold its AGM today.

Trading Ideas:

• Bell Potter have maintained its Buy rating on capital market company, Pendal Group (ASX:PDL) but have reduced its price target from $7.48 to $6.80. This comes as the Pendal board has decided the proposal from Perpetual (PPT) is not in the best interests of shareholders, as it significantly undervalues the current and future value of the business. Now PDL closed 0.19% lower yesterday to $5.29, which implies about 29% share price growth in a year.
• Trading Central has a bearish signal on Santos (ASX:STO) indicating that the stock price may fall from the close of $8.00 to the range of $6.70 - $6.90 in the next 26 days according to standard principals of technical analysis.

The local market rose slightly higher yesterday, up 0.1%. Sectors wise, the market was mixed. The financials sector lifted 0.78% with all four of the big banks rising and NAB hitting a five-year high. While the tech sector was down 0.85%. 

On the ASX200 leaderboard, GrainCorp (ASX:GNC) was the best performer, jumping an impressive 6.8%. The company’s recent guidance upgrade resulted in Wilsons increasing its earnings expectations for the company. Regis Resources (ASX:RRL) also gained, off the back of a rise in the gold price and a bullish broker note out of Credit Suisse.  Meanwhile, the worst performing stocks included AVZ Minerals (ASX:AVZ) and PolyNovo (ASX:PNV). The a2 Milk Company (ASX:A2M) fell 5.4% after Credit Suisse trimmed its earnings estimates and valuation in response to the lockdowns in China and lower birth rate assumptions.

The most traded stocks by Bell Direct clients yesterday included uranium producer Boss Energy (ASX:BOE), Ardent Leisure Group (ASX:ALG) and Zeotech (ASX:ZEO), which closed 6.4% higher.

Moving to the US, all three benchmarks closed in the red. The Nasdaq falling over 2% as tech shares slumped off the back of higher rate fears. The Dow closed more than 400 points lower and the S&P500 was down 1.7%. 

What to watch today: 

·       Following the negative session in the US, the futures are suggesting that the Aussie share market is set to open 0.29% lower this morning.  

·       In commodities, the oil price slid about 4% to US$94.29 a barrel, its lowest level since February, as lockdowns in China continue to spark demand fears. The gold price was steady, trading slightly higher. Remember, while gold is considered a hedge against inflation, rate hikes increase the opportunity cost of holding the non-yielding bullion. And the seaborne iron ore price is trading at US$156 a tonne.

·       In economic news, business confidence for March will be released today. As a reminder, business confidence surged to 13 in February, which was the highest reading in four months, amid a decline in cases of the Omicron variant. Today’s reading for March is expected to come in lower. Stay tuned at 11:30am AEST. 

·       Seven Group Holdings (ASX:SVW) is set to go ex-dividend today.  

Trading Ideas: 

·       Bell Potter have maintained its BUY rating on healthcare equipment and services company Pro Medicus (ASX:PME) with a price target of $55. PME announced its latest contract win in the US with the signing of Inova Health. It’s an 8-year deal generating minimum revenues of $32m. The deal increases contracted revenues to at least A$386m over 5 years. Now PME closed 1.1% higher yesterday to $48.50, which implies about 13% share price growth in a year. 

·       Trading Central has a bullish signal on Genesis Minerals (ASX:GMD), indicating that the stock price may rise from the close of $1.95 to the range of $2.32 - $2.42 in the next 63 days according to standard principals of technical analysis. 

The ASX200 posted a small loss of 0.2% for the week, however on Friday the market gained 0.5%. Materials advanced the most, the sector closing with a 1.6% gain, as the major mining stocks rose despite a drop in the price of iron ore. It was a positive trading session overall with 7 of the 11 industry sectors in the green. The major banks were mixed, with CBA and ANZ higher, while NAB closed flat and Westpac closed slightly lower. And real estate, tech, healthcare and the consumer discretionary sector, ended the day with small losses. 

Paladin Energy (ASX:PDN) jumped more than 13%. PDN is a uranium production company and its share price was boosted on Friday by a jump in the price of uranium. The commodity price rose to its highest level since the Fukushima nuclear disaster in March 2011, and that’s at $60.61 a pound. Meanwhile, Platinum Asset Management (ASX:PTM) led the declines on Friday, dropping 15%, down to $1.90, after the company reported that funds under management dropped $1.5 billion, and also reported negative returns across almost all of its funds for the year. 

The most traded stocks by Bell Direct clients on Friday were Westpac (ASX:WBC), Finder Energy Holdings (ASX:FDR), Lake Resources (ASX:LKE) and Platinum Asset Management (ASX:PTM).

European markets ended a volatile week of trading in the green. While US stocks posted weekly losses after the Federal Reserve commented on tighter monetary policy, signalling it will act even more aggressively to fight inflation. The major benchmarks closed mixed. The Dow Jones climbed 100 points on Friday, up 0.4%, while the S&P500 closed 0.3% lower. The Nasdaq fell 1.3%, as tech stocks led the session’s losses. Tech stocks are viewed as risky due to their sensitivity to interest rates. Higher interest rates could limit future profit growth among the tech sector and therefore shares were sold on Friday. 

What to watch today:

• The local market is set to rise 0.36% at the open this morning, if you’re going by the SPI futures. 
• Oil prices are trading higher, however there are demand concerns for China, a top importer. 
• Gold is trading higher as well, as the Federal Reserve’s aggressive tightening plans countered inflation concerns intensified by the Ukraine war and mounting sanctions on Russia. 
• Iron ore is trading lower, however investors are expecting strong restocking demand in China once COVID-19 restrictions ease. Lockdowns in some of the top steel making cities have led to transportation disruptions, with most producers cutting production amid material shortages. 
• Brickworks (ASX:BKW) is set to go ex-dividend today. 

Trading Ideas:

• Citi maintain its Buy rating on Aristocrat Leisure (ASX:ALL), with a $44 price target. Citi expects acquisitional growth into the US$15 million iGaming market to be likely following legalisation, and Citi also note that the core social casino business offers 16% compound annual earnings growth through to FY24. 
• Trading Central have identified a bullish signal in Boss Energy (ASX:BOE), indicating that the stock price may rise from the close of $2.58 to the range of $3.10 to $3.25, over 26 days, according to the standard principles of technical analysis. 

The Aussie share market declined 0.7% this week (Mon-Thu). The utilities sector outperformed, while the tech sector and consumer discretionary sector came under pressure.

 In this week’s wrap, Sophia covers:

• (0:25 ) What happened in global markets in Q1
• (2:26) Why it's worth considering nickel
• (3:52) What to think about when interest rates rise
• (5:04) Pendal (ASX:PDL) lifting 18% after receiving a takeover offer
• (5:37) The most traded stocks by Bell Direct clients
• (5:57) Three economic news items to watch out for

The local market declined 0.5% yesterday, weighed down by the tech sector as Aussie tech shares followed the US Nasdaq led, and took a tumble.

Sectors wise, only the financials and consumer staples sectors managed to close in the green. The gains for the banks were partly due to the increase in interest rate expectations following the RBA’s monetary policy statement on Tuesday. 

Looking at the ASX200 leaderboard, healthcare company, PolyNovo (ASX:PNV) performed well, lifting 4.6% after the business revealed its strong March quarter results. The company delivered a 60% increase in revenue compared with the same period last year. Travel stocks also were amongst the best performers, including Flight Centre (ASX:FLT) and Corporate Travel Management (ASX:CTD) as the sector continues to benefit from the removal of restrictions around the world. Meanwhile, stocks that took a hit yesterday included tech shares NOVONIX (ASX:NVX) and Block (ASX:SQ2), as well as AVZ Minerals (ASX:AVZ).

The most traded stocks by Bell Direct clients yesterday included mineral company, Andromeda Metals (ASX:ADN), Champion Iron (ASX:CIA) and Vanguard Australian Shares ETF (ASX:VAS). 

Moving to the US, all three benchmarks closed in the red for the second day. This comes as the US Federal Reserve gave more insight on its plans to tighten monetary policy to fight inflation. Central bank officials are considering larger rate hikes than the usual 25-basis-points. And across the sea, European markets closed lower off the back of the Fed’s hawkish comments and as investors await details of fresh international sanctions against Russia. 

What to watch today:

·         Following the negative session in the US, the futures are suggesting that the Aussie share market is set to open 0.28% lower this morning.  

·         In commodities, the oil price has sunk 5% following the International Energy Agency (IEA), releasing 120 million barrels from strategic reserves. The gold price on the other hand was steady, trading at US$1,925 an ounce. And the spot iron ore price continues to trade flat at US$154 a tonne.

·         In economic news, balance of trade data for February will be released today. Australia's trade surplus increased to $12.89 billion in January 2022. Today’s reading for February is expected to come in a bit lower at $12 billion.

·         Scentre Group (ASX:SCG) is holding its AGM today. 

Trading Ideas:

·         Another stock that is benefiting from the strong market demand for lithium is Mineral Resources (ASX:MIN) and Bell Potter have maintained its BUY rating on the stock, lifting its price target from $61.35 to $74.35. This is due to MIN’s increase in lithium production plans. MIN plans to double spodumene processing capacity at Mount Marian lithium mine. Now MIN closed 1.1% higher yesterday to $60.35, which implies about 23% share price growth in a year. 

·         Trading Central has a bullish signal on Steadfast Group (ASX:SDF), indicating that the stock price may rise from the close of $4.87 to the range of $5.30 - $5.40 in the next 14 days according to standard principals of technical analysis. 

The local market advanced 0.2% higher yesterday, losing some of its steam in the afternoon when the RBA suggested an interest rate rise could be imminent. While the cash rate was kept at its historic low of 0.1%, many economists believe there will be an increase later this year, some expecting it to come as early as June. The Government’s cost of living packages announced in the Federal Budget last week added further fuel to the fire that interest rates could rise. 

Sectors wise, all sectors were in the green, with the tech sector and energy sector gaining the most. The local tech sector took a strong lead from Wall Street, where the Nasdaq lifted nearly 2% higher on news that Elon Musk had acquired a 9.2% stake in Twitter. Meanwhile the materials, real estate and industrials sectors posted losses. 

Looking at the ASX200 leaderboard, tech names like Block (ASX:SQ2), NOVONIX (ASX:NVX), Xero (ASX:XRO) and Altium (ASX:AU) were amongst the best performers. Mineral Resources (ASX:MIN) jumped 5.7% after announcing it had agreed with its joint venture partners to increase production in its spodumene mines in WA, their response to the huge global customer demand for lithium. On the flipside, the worst performers yesterday included AVZ Minerals (ASX:AVZ), Liontown Resources (ASX:LTR) and Lynas Rare Earths (ASX:LYC).

The most traded stocks by Bell Direct clients yesterday included Temple & Webster (ASX:TPW), Core Lithium (ASX:CXO) and NOVONIX (ASX:NVX). 

Moving to the US, all three benchmarks closed in the red, with the Nasdaq down the most. This comes as the US Federal Reserve indicated that the central bank could take a more aggressive approach to its tightening policy. This saw tech stocks decline, while sectors like utilities and healthcare pushed higher. Also, the Biden administration on Wednesday is set to announce additional sanctions targeting Russian financial institutions. 

What to watch today:

• Following the pullback in the US, the futures are suggesting that the Aussie share market is set to open 0.64% lower this morning.  
• In commodities, the oil price fell on worries that new COVID cases could slow demand. The gold price also fell following the Fed’s hawkish outlook which offset safe-haven demand. And the spot iron ore price is trading flat at US$154 a tonne.
• Keep watch of Coles (ASX:COL) today amid reports that Wesfarmers (ASX:WES) has sold a $500 million stake in the supermarket giant. 

Trading Ideas:

• Bell Potter have maintained its BUY rating on Allkem (ASX:AKE) and have a price target of $18.05. AKE closed 0.83% higher yesterday to $13.42, which implies about 35% share price growth in a year. 
• Trading Central has a bullish signal on Temple & Webster (ASX:TPW), indicating that the stock price may rise from the close of $7.05 to the range of $8.10 - $8.40 in the next 32 days according to standard principals of technical analysis.