Between the Bells

The local market started the new trading week with a small loss of 0.2%, breaking its three-day winning streak from last week. 

Sectors wise, the market was mixed, with the industrials and healthcare sectors declining the most, both falling over 1%, while the tech sector managed to post a gain of 2.5%. 

Block (ASX:SQ2) was the session’s best performer, lifting a massive 9.2%, following another strong session for the company’s US listed shares. Family safety app, Life360 (ASX:360) also performed well, gaining 6.4% and EML Payments (ASX:EML) jumped 6.1%. On the flipside, Western Australian gold explorer, De Grey Mining (ASX:DEG) led the losses, down 7.7%, and Magellan Financial Group (ASX:MFG) also fell after its co-founder Hamish Douglass resigned as an independent director, more than a month after he took medical leave. 

The most traded stocks by Bell Direct clients yesterday included Core Lithium (ASX:CXO), REA Group (ASX:REA) and Northern Star Resources (ASX:NST).

As at the time of recording, all three US benchmarks are in the red, and this follows Federal Reserve Chair Jerome Powell stating that inflation is too high and his commitment to taking the “necessary steps” to bring prices under control. Separately, Boeing has fallen more than 3% after a China Eastern Airlines Boeing 737 passenger plane crashed.

What to watch today:

• The futures as at 7am AEDT, are suggesting that the Aussie share market is set to open 1.1% higher this morning.  
• In commodities, the oil price has jumped more than 7% after European nations considered joining the US in a Russian oil embargo. The WTI crude oil price is currently trading at US$112 a barrel.
• The gold price is trading higher following further escalations in Ukraine, which have boosted the safe-haven’s demand. 
• The nickel price is down nearly 12%. Russia is the world’s third-largest nickel producer, and the current Russia/Ukraine war has sparked supply fears. 
• The spot iron ore price is currently trading 2.5% higher at US$145 a tonne.
• Toll road operator, Atlas Arteria (ASX:ALX), Emeco Holdings (ASX:EHL) and health supplements company, Blackmores (ASX:BKL) are set to go ex-dividend today. 

Trading Ideas:

• Bell Potter have maintained its BUY rating on Technology One (ASX:TNE) with a price target of $14 (previously $15). TNE closed about 1% lower yesterday to $11.11, which implies about 26% share price growth in a year. 
• Trading Central has a bullish signal on Galan Lithium (ASX:GLN), indicating that the stock price may rise from the close of $1.54 to the range of $1.75 - $1.81 in the next 21 days according to standard principals of technical analysis. 

Last week ended on a positive note, as Aussie shares closed higher for the third straight session, closing 0.6% on Friday, and lifting its weekly gain by 3.3%. 

The energy sector led the market after the oil price rose 9%, while the tech sector followed. The technology sector was led by Block (ASX:SQ2), which rose 7.2% to $168.88. Liontown Resources (ASX:LTR), Paladin Energy (ASX:PDN) and Telix Pharmaceuticals (ASX:TLX) were among the top performers, while Megaport (ASX:MP1) fell 8%, following news that its founder and chairman, Bevan Slattery, had sold $3 million MP1 shares. 

The most traded stocks by Bell Direct clients on Friday included Lake Resources (ASX:LTR), Core Lithium (ASX:CXO) and BHP Group (ASX:BHP). 

US stocks posted their best week since 2020. The Dow rose more than 270 points or 0.8%, the S&P500 rose 1.1% and the Nasdaq rose 2.05%. 

What to watch today:

• Following the rally on Wall Street, the local market is set to rise 0.81% at the open this morning, going by the SPI futures. 
• In commodities, oil is trading 2% higher at US$104.95 a barrel, after a 8% rally in the previous session. 
• Gold weakened past US$1,940 an ounce. And seaborne iron ore is higher at US$159.59 a tonne. 
• Adairs (ASX:ADH) and NRW Holdings (ASX:NWH) are set to go ex-dividend today. 

Trading Ideas:

• Bell Potter maintained their BUY rating on The a2Milk Company (ASX:A2M) and have lowered their price target from $7.70 to $7.15. They expect the scope for EPS to double by FY26, if the company can execute on its China offline expansion strategy, while regaining 50% of the lost sales in its English label IMF, from FY20-21. A2M last closed to $5.40, implying 32.4% share price growth in a year. 
• Trading Central have identified a bullish signal in AVZ Minerals (ASX:AVZ), indicating that the price may rise from the close of $0.92 to the range of $1.20 to $1.28, over 68 days. 

The Aussie share market soared this week, rising 2.65% (Mon-Thu), supported by the US Federal Reserve's decision to raise rates for the first time since 2018.

In this week’s wrap, Sophia covers:

• (1:05) Uniti Group (ASX:UWL) gaining 30% on news of a takeover offer
• (2:03) Agri-business Elders (ASX:ELD) jumping to a decade high
• (2:51) Why major mining stocks & energy producers lost ground
• (3:52) The most traded stocks by Bell Direct clients
• (4:13) What the Fed's rate hike decision means for Australia
• (5:20) Two economic news items to watch out for

Before we begin, we wanted to let you know that this week, we’ve donated $10,000 to Foodbank, as the clean-up and support efforts continue through flood affected regions in Australia. Foodbank is an organisation that is supplying food and water to the front line of the flood crisis including the SES volunteers. To help support the cause, you can donate here:  https://foodbank.raisely.com/helpnswfloodvictims

Yesterday, the local market advanced 1.1%, with all sectors closing in the green. The broad rally was led by the tech sector, which gained 3.3%, while the energy sector performed the worst, lifting just 0.2%, following a further decline in the oil price.  

Looking at the ASX200 leaderboard, five of the top 10 best performing stocks, were tech shares, including Life360 (ASX:360) which was up the most, rising 7.4%. On the flip side, Super Retail Group (ASX:SUL) and Nanosonics (ASX:NAN) both declined around 3%, and Uniti Group (ASX:UWL) dropped 1.3%, as investors may have taken a bit of profit off the table following the stocks strong rise on Tuesday, after confirmation that it was in takeover talks. 

The most traded stocks by Bell Direct clients yesterday, Lake Resources (ASX:LKE) was again on top of the list, lifting over 11% yesterday, set to be added to the ASX300 Index on the 22nd of March. Also highly traded was the Vanguard Australian Fixed Interest Index ETF (ASX:VAF), BHP Group (ASX:BHP) and Telstra (ASX:TLS).

Moving to the US, all three benchmarks closed in the green after the US Federal Reserve announced its first rate hike in more than three years, with officials indicating an aggressive path ahead, meaning we could see further rate rises at each of its remaining six meetings of this year. The Fed approved a 0.25% rate hike, which brings the rate now into a range of 0.25% - 0.50%.

What to watch today: 

• Following the positive session in the US, the futures are suggesting that the Aussie share market is set to open 1.6% higher this morning.  
• In commodities, the oil price continued to sink following Russia-Ukraine optimism and an increase in US inventories. The oil price is currently trading at US$95 a barrel. The gold price remained steady, at US$1,926 an ounce, after the US Fed hiked rates as expected. And the seaborne iron ore price is currently trading higher at US$148 a tonne.
• In economic news, the unemployment rate for February will be released today. As a reminder, the unemployment rate came in at 4.2% in January, which was unchanged from the month prior. For today, consensus is expecting February’s rate to come in at 4.1%. 
• Coronado Global Resources (ASX:CRN), DDH1 (ASX:DDH), PWR Holdings (ASX:PWH), Genesis Energy (ASX:GEN), Fletcher Building (ASX:FBU) and electricity generation company Meridian Energy (ASX:MEZ) are set to go ex-dividend today. 

Trading Ideas:

• Bell Potter have maintained its BUY rating on drilling contractor DDH1 (ASX:DDH) with a price target of $1.56. Bell Potter expects ongoing rig fleet growth to drive calendar year 2022 earnings, while normalising domestic border conditions present operational upside. DDH closed flat yesterday at $1.04, which implies about 50% share price growth in a year. 
• Trading Central has a bullish signal on Alpha HPA (ASX:A4N), indicating that the stock price may rise from the close of $0.57 to the range of $0.61 - $0.63 in the next 16 days according to standard principals of technical analysis. Bell Potter also has a speculative BUY rating on the stock with a 12-month valuation of $0.96. 

Yesterday, the local market was dragged down by mining stocks, after iron ore futures China’s Dalian market dropped 7% and the iron ore contract for April on the Singapore Exchange dropped 9%. Several Asian markets were down 5-6%, following further lockdowns to contain surging COVID cases in China. More than $50 million people in China have been placed under lockdown in an attempt to achieve the country’s zero COVID-19 strategy.

On the ASX200, materials and energy declined the most, closely followed by the tech sector. Meanwhile, financials closed with the most gains. The stand out stock on the ASX200 was Uniti Group (ASX:UWL), jumping an impressive 27%, before being placed into a trading halt. This was amid speculation that the company is in takeover talks with Vocus Group. The offer is looking to be in the region of $4 to $5. Meanwhile, Chalice Mining (ASX:CHC) and Champion Iron (ASX:CIA) declined the most. 

Some of the most traded stocks by Bell Direct clients yesterday, included Lake Resources (ASX:LKE), BHP Group (ASX:BHP) and Allkem (ASX:AKE). 

US equities closed higher as a reading of wholesale inflation came in lighter than expected. The S&P500 rose for its first gain in four days, closing more than 2% higher. The Dow Jones up 1.8% or just under 600 points, while the Nasdaq jumped 2.9%. 

What to watch today:

• Following the US, the SPI futures are suggesting the local market will rise 0.58% at the open this morning. 
• In commodities, oil has dropped a further 6.7%, now trading just over US$96, now more than 25% below its recent 14-year high of $130.50 reached last week. The new wave of COVID cases in China has also caused worries of China’s demand. 
• Gold is down to US$1,917 an ounce, after US treasury yields surged past 2%, as investors await an upcoming rate hike from the Fed. And seaborne iron ore is 3.6% lower at US$144.77 a tonne. 
• Some companies set to go ex-dividend today, include Data3 (ASX:DTL), Inghams Group (ASX:ING), and Money3 Corporation (ASX:MNY). 

Trading Ideas:

• Bell Potter have a Speculative BUY rating on Boss Energy (ASX:BOE), following the company reporting its half year results. Bell Potter’s valuation has been increased from $3.47 to $3.57 per share. 
• Trading Central have identified a bullish signal in Aussie Broadband (ASX:ABB), indicating that the price may rise from the close of $5.34 to the range of $6.10 to $6.30, over 58 days, according to the standard principles of technical analysis. 

The local market advanced an impressive 1.2% yesterday, with 10 of the 11 industry sectors posting gains. The financial sector boosted the market the most, while the materials sector was slightly down 0.3%.

Agribusiness, Elders (ASX:ELD) was the best performer, lifting 11% to a decade high. This was off the back of a positive trading update, where the company announced it expects its underlying earnings before interest tax (EBIT) to increase 20% in financial year 2022. It was also a good day for capital market company, Pendal Group (ASX:PDL) and holding company, Virgin Money UK (ASX:VUK). Meanwhile, materials stocks like Chalice Mining (ASX:CHC), Nickel Mines (ASX:NIC) and Pilbara Minerals (ASX:PLS) led the losses. 

As for the most traded stocks by Bell Direct clients yesterday, Lake Resources (ASX:LKE) was on top of the list, along with Brickworks (ASX:BKW) and Core Lithium (ASX:CXO). Also highly traded were CBA, NAB & Bendigo & Adelaide Bank (ASX:BEN). 

Moving to the US, the market closed in the red, as oil prices fell rapidly. Also investors await the latest Ukraine developments and anticipate the first rate hike by the Federal Reserve this week. This saw the Dow close flat, while the S&P500 fell 0.74% and the Nasdaq slipped over 2%.

What to watch today:

• Following the negative session over in the US, the futures are suggesting that the Aussie share market is set to open 0.8% lower this morning.  
• In commodities, the oil price has retreated about 7% to US$101 a barrel. This comes as Russia and Ukraine were slated to resume peace talks on Monday, while China’s March demand is set to be revised lower due to new COVID-19 lockdowns.
• The gold price slipped 1.6% to US$1,952 per ounce as US Treasury yields rose on rate hike expectations. And silver, copper and palladium were also trading lower, with the palladium price down over 15%.
• Keep watch of Rio Tinto (ASX:RIO) today, after the company announced a non-binding proposal to acquire the remaining 49% of the Canadian miner, Turquoise Hill, that it doesn’t already own. If the deal is successful, RIO’s share of the Oyu Tolgoi operation will increase to 66%.
• Economic news wise, the RBA will release its meeting minutes for March. The RBA currently views the war in Ukraine as a source of uncertainty and expects underlying inflation to increase further in the coming quarters to around 3.25%, before declining to around 2.75% in 2023.
• ASX200 stocks going ex-dividend today, include media companies News Corp (ASX:NWS) and IVE Group (ASX:IGL), copper miner Sandfire Resources (ASX:SFR) and telco TPG Telecom (ASX:TPG). 

Trading Ideas:

• Bell Potter have maintained its BUY rating on Uniti Group (ASX:UWL) with a price target of $4.50. Bell Potter believe the stock represents value and is also a potential takeover target. UWL closed 0.96% higher yesterday to $3.15, which implies about 43% share price growth in a year. 
• Trading Central has a bullish signal on testing, inspection and verification services company, ALS (ASX:ALQ), indicating that the stock price may rise from the close of $12.84 to the range of $14.60 - $15 in the next seven days according to standard principals of technical analysis.

Aussie shares ended the week in the red, down 0.9%, dragged down by a 3% fall in the tech sector. BNPL stock Zip (ASX:Z1P) was the worst performer on the ASX200, closed more than 8% lower. Xero (ASX:XRO) closed down more than 5%, while Altium (ASX:ALU) and lock (ASX:SQ2) were also lower. Meanwhile, utilities, energy and materials closed in the green. 

The best performer on Friday was Allkem (ASX:AKE), which is the lithium producer formally known as Orocobre. Demand for lithium and electric vehicles has led to AKE’s share price growth over the last few years and on Friday the stock closed 5% higher. Incitec Pivot (ASX:IPL) and Nufarm (ASX:NUF) also lifted on Friday with the war in Ukraine causing a global shortage in fertiliser. The stocks gain 2.5% and 2%. 

The most traded stocks by Bell Direct clients included Core Lithium (ASX:CXO), Lake Resources (ASX:LKE), ANZ (ASX:ANZ), Nickel Mines (ASX:NIC) and Rio Tinto (ASX:RIO). 

In Europe, the European Central Bank delivered a hawkish surprise, to slow its bond purchases from the start of May, saying it may end its quantitative easing program altogether by the third quarter. However, economists had anticipated a more delayed withdrawal of monetary stimulus. 

In the US, CPI data for February came in at 8%, the highest reading since January 1982. And despite expectations for cooling goods demand on the back of the post-COVID reopening: core goods CPI printed at 12% in the year through February, the highest since 1975. US equities closed lower. The Dow down 0.7%, the S&P500 down 1.3%, while the Nasdaq dropped 2.2%. 

Locally today, the ASX200 is set to rise 0.28%, going by the SPI futures. 

What to watch today; 

• In commodities, oil is trading higher, slightly above US$109 per barrel, however posted a 5.7% decline on the week. Gold is trading lower, just over US$1,984 an ounce, after retreating from a near record high earlier in the week. Investors weighed geopolitical uncertainties against a commodity-driven rise in inflation, prompting central banks to signal willingness to tighten monetary policy sooner. And seaborne iron ore is trading at US$155 a tonne. 
• Watch Chalice Mining (ASX:CHN), as the gold mining company is set to report its earnings. 
• Companies set to go ex-dividend today include Best & Less (ASX:BST), Pepper Money (ASX:PPM), SCA Property (ASX:SCP) and Suncorp (ASX:SUN). 

Trading Ideas: 

• Bell Potter maintain their BUY rating on Doctor Care Anywhere (ASX:DOC), a UK- based telehealth company. Bell Potter have lowered their price target from $1.30 to $0.55, largely reflecting the re-rating of growth stocks in recent weeks. DOC last closed at $0.29, implying 89.6% share price growth in a year. 
• Trading Central have identified a bullish signal in gold miner Firefinch (ASX:FFX), indicating that the stock price may rise from the close of $0.80 to the range of $0.89 to $0.91, over 20 days, according to the standard principles of technical analysis. 

The materials and energy industry sectors have cooled off this week, however the Aussie share market gained 0.3% (Mon-Thu).

In this week’s wrap, Sophia covers:

• (0:34) Mesoblast (ASX:MSB) leads the ASX200
• (1:00) The gold miners that gained as the safe-haven commodity rose
• (1:36) Why Nickel Mines (ASX:NIC) tumbled 24%
• (2:51) The most traded stocks by Bell Direct clients
• (3:21) Bell Potter’s top tech picks
• (5:28) Two economic news items to watch out for

Yesterday at ASX200 closed in the green for the first time in four days. The tech sector rebounded, after what had been a week of heavy losses, with software players WiseTech (ASX:WTC) and Xero (ASX:XRO) adding 6.4% and 1.8% respectively. The likes of Block (ASX:SQ2) and Zip (ASX:Z1P) also made gains. BNPL stock Z1P posted its first positive session since the February 25th. 

Mesoblast (ASX:MSB) rebounded 17%, after falling earlier this week. While Paladin Energy (ASX:PDN) jumped 10%, off the back of broker upgrades. Bell Potter have upgraded PDN from a HOLD to a Speculative BUY. The broker says that the Uranium price continues to recover from cyclical lows, as limited near-term supply spurs the spot market, whilst the global path to decarbonisation re-shapes the role of nuclear energy over the longer-term. PDN represents the largest and most liquid exposure to uranium on the ASX, with the pending restart decision at their flagship Langer Heinrich Mine. 

The most traded stocks by Bell Direct clients yesterday included 29 Metals (ASX:29M), Core Lithium (ASX:CXO) and Lake Resources (ASX:LKE). 

US equities are higher, with all three major benchmarks in the green.  The S&P500 and the Dow up more than 2.5% and the Nasdaq rallying 3.9% higher. 

Following the US, the SPI futures are suggesting the local market will rise 0.44% at the open this morning. 

What to watch today: 

• In commodities, the price of oil has cooled off, trading 12% lower at US$109 a barrel, as investors try to assess the impact of recent sanctions in the oil market. 
• The gold price is also trading 3% lower, as some investors may be selling gold to raise cash to buy undervalued stocks offsetting gold's safe-haven appeal. And seaborne iron ore is has fallen to US$157 a tonne. 
• Capricorn Metals (ASX:CMM), De Grey Mining (ASX:DEG) and Gold Road Resources (ASX:GOR) are set to report their earnings today. 

Trading Ideas: 

• Bell Potter maintain their BUY rating on Nickel Mines (ASX:NIC) with a $1.76 price target. NIC entered and exited a trading halt on Wednesday, following a 23% drop in its share price in morning trade. This resulted from speculation around the possible implications for private equity company Tsingshan Holding Group, which is the world’s largest stainless steel producer and parent company of Shanghai Decent Investment, who are NIC’s largest shareholder, having a 17.9% stake in the company. NIC last closed at $1.40, implying 25.3% share price growth in a year. 

We wanted to let you know that this week, we’ve donated $10,000 to the Australian Red Cross QLD and NSW Floods Appeal to provide vital humanitarian support to the people and communities affected by the 2022 floods. We're committed to supporting our community through this difficult time and are thinking of those Australians who have suffered catastrophic losses, knowing the journey to rebuild is only beginning for many. To help support the cause, you can donate here: https://www.redcross.org.au/floodsappeal/  

Now let’s take a brief look at what happened yesterday. The local market declined 0.8%, weighed down by both the energy and materials sectors, as investors feared that higher energy prices due to Russia’s war in Ukraine would drive inflation higher and hurt the global economy.

Gold miner, St Barbara (ASX:SBM) was the best performer, lifting nearly 13%, supported by the rising gold price, but also due to claims that it could be a takeover target. And healthcare stocks like Imugene (ASX:IMU), Mesoblast (ASX:MSB), CSL (ASX:CSL) and ResMed (ASX:RMD) also performed well. While, the major miners led the losses, even as iron ore prices climbed above $US160 a tonne.

The most traded stocks by Bell Direct clients yesterday included Lake Resources (ASX:LKE) was on top of the list again, along with Rio Tinto (ASX:RIO), Northern Star Resources (ASX:NST), Westpac (ASX:WBC) and ANZ (ASX:ANZ). 

US shares continued to fall overnight, as investors try to determine the impact of the Russia-Ukraine war. The Dow fell about 180 points, falling deeper into correction territory, the S&P500 was down 0.72% and the Nasdaq fell 0.28%, falling further into bear market territory.

Despite the negative session over in the US, the futures are suggesting that the Aussie share market is set to open slightly higher this morning. 

What to watch today: 

• In commodities, the oil price is trading 4% higher to US$124 a barrel, and in fact popped up as much as 7% following President Joe Biden announcing a ban on Russian fossil imports including oil in response to the country’s invasion of Ukraine. The gold price continues to trade higher, at US$2,050 per ounce.
• And the nickel price jumped a massive 88%, surging at one point to a record US$100,000 a tonne, so today keep watch of miners with exposure to nickel, such as IGO (ASX:IGO), Nickel Mines (ASX:NIC) and Western Areas (ASX:WSA).
• In economic news, the Westpac Consumer Confidence index will be released today at 10:30am AEDT. As a reminder, the index declined 1.3% to 100.8 points in February 2022, and March’s figure is expected to come in at 99.2, according to Trading Economics.
• Companies going ex-dividend today include Accent Group (ASX:AX1), Brambles (ASX:BXB), Costa Group Holdings (ASX:CGC) and Imdex (ASX:IMD).

Trading Ideas: 

• Bell Potter have maintained its BUY rating on media technology company, Ai-Media Technologies (ASX:AIM) with a price target of $0.90. Overall, Bell Potter remains positive on the company and its outlook. In particular, they are attracted to the growing global market opportunity. AIM closed flat yesterday at $0.56, which implies 53% share price growth in a year.
• Trading Central has a bearish signal on Sims (ASX:SGM), indicating that the stock price may fall from the close of $18.92 to the range of $14.20 - $15.10 in the next 16 days according to standard principals of technical analysis.