Between the Bells

Yesterday, the Aussie share market posted a small loss of 0.13%, in what was a choppy session. ANZ reported worse-than-expected first quarter margins, which saw its share price decline nearly 2% and the Australian government announced that our international COVID-19 border closures would end on February 21. 

Looking at the sector performances, the energy sector outperformed, up 1.6%, benefitting from the recent gains in both oil and gas commodity prices, while the healthcare sector led the losses, down 1.3%.

GrainCorp (ASX:GNC) led the way, rising an impressive 12.3%, after revealing that it’s expecting a favourable outlook for financial year 2022. And travel stocks were back on top following the government’s announcement that Australians would be welcoming back international travellers later this month. Flight Centre (ASX:FLT), Corporate Travel Management (ASX:CTD), Webjet (ASX:WEB) and Qantas (ASX:QAN) all gained more than 4%. Meanwhile, Magellan Financial Group (ASX:MFG) declined 11%, after it was announced that its director and chairman, Hamish Douglass would be taking a leave of absence.

The most traded stock by Bell Direct clients yesterday, was iron ore miner Champion Iron (ASX:CIA). Its share price fall may have been because the company traded ex-dividend yesterday. As a reminder, a company’s share price typically drops by the amount of the dividend paid to reflect the fact that new shareholders are not entitled to that payment.

In the US, both the S&P500 and Nasdaq started the week on a negative note as quarterly results continued to be a source of volatility, and as investors await key US inflation data on Thursday. The Dow closed flat, the S&P500 down 0.37% and the Nasdaq also down 0.58%. And Facebook-parent Meta shares have fallen another 5%, continuing its post-earnings slide. 

Today, following the negative session over on Wall Street, the futures are suggesting the Aussie share market will open 0.16% lower this morning. 

What to watch today:

• In economic news, business confidence data for January will be released this morning, which will provide further detail on how business confidence is holding up during the Omicron outbreak. Trading Economics expects today’s reading for January to come in at -14.  
• Suncorp (ASX:SUN) will be on watch today as the company is set to release its half-year results. Bell Potter currently has a BUY rating on the stock and is expecting NPAT to come in at $267.6m. While consensus is expecting a more modest NPAT of $290.5m.  
• Also reporting results today is Shopping Centres Australasia Property Group (ASX:SCP), G.U.D Holdings (ASX:GUD) and Charter Hall Long Wale REIT (ASX:CLW). 
• Keep an eye on Macquarie Group (ASX:MQG) as the company will be releasing its operational briefing today which will include an update on the investment bank’s performance during the third quarter of financial year 2022. 
• In commodities, the oil price fell following signs of progress in the US-Iran nuclear talks. The WTI crude oil price dropped nearly 1% to US$91.51 a barrel. On the flip side, the gold price climbed to a more than one-week high, as inflation risks boost the safe-haven’s appeal. And the seaborne iron ore price is trading 3.2% higher to US$150 a tonne. 

Trading Ideas: 

• Bell Potter has upgraded its rating on software company Altium (ASX:ALU) from a HOLD to a BUY, and have decreased its price target by 11% to $40. Bell Potter believe potential catalysts for the stock include 1) a strong first-half financial year 2022 result, 2) an upgrade in its financial year 2022 guidance and 3) a renewed and increased takeover offer from Autodesk. Now ALU last closed at $34.50, so that implies about 16% share price growth in a year.
• Trading Central has a bullish signal on Insurance Australia Group (ASX:IAG). This signal indicates that th

On Friday, the local market ended a three-week losing streak, with 10 of the 11 industry sectors rising higher. The ASX200 gained 0.6% on Friday, as reporting season kicked off.

Liontown Resources (ASX:LTR) gained over 6%. After the market close on Thursday, the company announced the completion of its share purchase plan (SPP). News Corp (ASX:NWS) reporting its highest earnings since its separation from 21st Century Fox in 2013. NWS gained 5.7%. Meanwhile, Seek (ASX:SEK) declined the most, after Goldman Sachs reiterated its SELL rating and decreased its price target by 15% to $27.30.  

The most traded stock by Bell Direct clients was Seven West Media (ASX:SWM). On Friday, UBS reiterated its BUY rating on SWM, with a $0.95 price target. Other highly traded stocks included a few ETFs, such as HLTH, VAS and VETH. While clients also traded CSL (ASX:CSL), BHP Group (ASX:BHP), Australia and New Zealand Banking Group (ASX:ANZ), BrainChip (ASX:BRN), Westpac (ASX:WBC) and Adelaide Brighton Cement (ASX:ABC).

In the US, we saw Facebook suffer the largest share market hit, by value and points, in market history. Facebook’s parent company Meta’s stock price fell by 27% in one day, equivalent to over US$230 billion in lost value. In the following session on Friday, the tech sector recovered the losses led by Facebook, by a 13.5% surged in Amazon. Amazon reported strong quarterly earnings, which also saw the company largest one-day gain since 2015. The S&P500 and the Nasdaq ended their best week of the year, while the Dow Jones closed slightly in the red.

The SPI futures are suggesting the ASX200 will fall 0.58% at the open.

What to watch today:

• The oil price has surged higher, trading at US$91.93. US crude prices hit their highest price since September 2014, at US$93 per barrel, following a large storm that swept across the US and disrupted some oil production in the Permian Basin region. Additionally, OPEC stuck to its plan to gradually release more barrels into a strengthening market.
• The price of gold is trading higher at US$1,807 an ounce.
• While the seaborne ire ore price is lower at US$145 a tonne.
• Australia and New Zealand Banking Group (ASX:ANZ) and James Hardie (ASX:JHX) will report their quarterly results, and Argo (ASX:ARG) and Imdex (ASX:IMD) will report their half year results.
• Iron ore miner Champion Iron (ASX:CIA) is set to go ex-dividend today.

Trading Ideas:

• Bell Potter have upgraded Pro Medicus (ASX:PME), a leading heath imaging IT provider, from a HOLD to a BUY, and have amended their price target to $55 from $62. The broker expects PME to deliver strong earnings growth at the upcoming reporting. PME last closed at $45.58, implying 20.7% share price growth in a year.
• Trading Central have identified a bullish signal in Australian Clinical Labs (ASX:ACL), indicating that the stock price may rise from the close of $5.08 to the range of $6.00 to $6.20, within 17 days, according to the standard principles of technical analysis.

The Aussie share market has managed to post an impressive gain of 1.3% this week (Mon-Thu). Leading the gains were the energy and the utilities sectors, while the tech sector declined slightly.
 
 In this week’s wrap, Sophia covers: 

• (0:28) Nufarm (ASX:NUF) gaining after posting revenue growth in Q1
• (1:16) Why Ansell (ASX:ANN) experienced a large sell-off
• (2:04) The ETFs Bell Direct clients were trading this week
• (3:36) What to expect this reporting season
• (6:05) Two economic news releases to watch 

Access Bell Direct's reporting season calendar here.

Yesterday, the Aussie share market continued its positive streak in February, closing 1.2% higher to pop back over 7,000 points. We also heard from RBA Governor Philip Lowe, who stated that a rate rise later this year was a plausible situation. And BHP (ASX:BHP) once again became the largest company on the Aussie share market after officially completing the unification of its Australian and UK listings. 

In sector performances, nearly all sectors closed in the green, with the energy and materials sectors gaining the most. On the ASX200 stock leader board, eight mining stocks were amongst the best performers. Auckland International Airport (ASX:AIA) pushed 5.4% higher and Worley (ASX:WOR) gained about 5%, benefiting from surging oil prices. Meanwhile, the worst performing stocks included Credit Corp Group (ASX:CCP), Block (ASX:SQ2) and Amcor (ASX:AMC). Amcor fell 3.5% despite announcing a 12% jump in its first-half sales. 

The most traded stocks by Bell Direct clients yesterday included software company BrainChip (ASX:BRN), which topped the list, lifting over 6% after announcing the receipt of another patent in the US. Another highly traded stock was Mineral Resources (ASX:MIN), its share price gained 2.2% after the company reported that the Western Australian government is set to increase iron ore export capacity at the Port of Port Hedland.

In the US, stocks rose for the fourth straight day, the Dow jumping over 200 points, the S&P500 climbing nearly 1% and the Nasdaq pushing 0.5% higher. The stock that led the gains was Alphabet, after its quarterly results beat analyst expectations. And Facebook-parent Meta shares have tumbled more than 15% in extended trading after a disappointing earnings report was released, where they also gave a weaker than expected forecast.

Today, the futures are suggesting the Aussie share market will open 0.09% higher this morning. 

What to watch today:

• In economic news, Australia’s balance of trade data for December will be released today. That’s the difference between what we export vs. what we import. Australia’s trade surplus declined to 9.42 billion in November, that was our smallest trade surplus since April. 
• Westpac (ASX:WBC) will be on watch today as the company has released its first quarter update this morning. The company delivered first quarter cash earnings of $1.58 billion, which while does represent growth, does fall short of Bell Potter’s forecasting of $1.82 billion. Aggressive competition also continued to weigh on margins.
• Nick Scali (ASX:NCK) will be releasing its first quarter 2022 results today. Bell Potter has a BUY rating on the stock and is expecting NPAT to come in at $29.1m, while consensus expects a slightly more modest NPAT of $30.5m. 
• Moving to commodities, OPEC have decided to green-light the return of 400,000 barrels per day for March, despite pressure from the US and India. The gold price gained as the US dollar and Treasury yields fell, following a disappointing ADP jobs report, where companies unexpectedly cut 301,000 jobs in January. And the seaborne iron ore price is trading 0.86% higher to US$140 a tonne. 

Trading Ideas:

• Bell Potter has upgraded its rating on Select Harvests (ASX:SHV) from a HOLD to a BUY with a price target of $7.10. This comes as SHV’s share price has fallen about 40% from its September 2021 highs and Bell Potter believe that the stock is trading at a modest discount. SHV last closed at $5.65, so that implies about 26% share price growth in a year.
• Trading Central has a bullish signal on Orica (ASX:ORI). This signal indicates that the stock price may rise from the close of $14.50 to the range of $15.30-$15.50 in the next 33 days, according to standard principles of technical analysis. 

Yesterday local shares rose 0.5% after the RBA, in its first meeting of the year, formally ended its quantitative easing program, as inflation rises faster than expected. This was the bond buying program introduced in late 2020, as an emergency measure during the pandemic, which kept bonds anchored near record lows, to help keep borrowing costs for households and businesses low. And as expected, the central bank also held the interest rate at 0.1%. 

Yesterday 10 of the 11 industry sectors closed with gains. However, the market was weighed by losses in materials, as the price of iron ore declined. 

This saw BHP (ASX:BHP), Rio Tinto (ASX:RIO) and other mining stocks among the worst performers. Meanwhile ASX tech stocks were the top performers, as the Nasdaq rebounded and Block (formally known as Square), officially took over Afterpay. Appen (ASX:APX) lead the gains, up almost 8%. Block (ASX:SQ2) and Zip (ASX:Z1P) were also among the top 10. 

The most traded stocks by Bell Direct clients yesterday included BHP (ASX:BHP) and Vanguard ETFs (ASX:VAS) and (ASX:VGS). 

European stocks started February on a positive note, and US stocks rose for the third day, extending the market’s comeback from the sell-off we saw in January. The Dow was up 0.8%, the S&P500 up 0.7% and the Nasdaq up 0.8%. 

Aussie shares are set to open higher. The SPI futures are suggesting a 0.68% rise at the open this morning. 

What to watch today:

• Amcor (ASX:AMC) will report its results today.
• Prospects of rising demand as economies recover, and concerns over tight supplies continue to support the oil market. Oil prices are at 2014 highs and increased 17% in January, which is the strongest gain since February 2021. The price of oil is currently trading higher, above US$88 a barrel.
• Gold prices also edged higher for a second consecutive session, trading above US$1,800 an ounce. Gold lost almost 1.7% in January, mostly due to a general dollar weakness. 
• The copper price also rose amid a weaker dollar.
• Iron ore has rebounded. Spot prices of iron ore are up with rising imports from China. The seaborne iron ore price is over 7% higher, trading at US$138 a tonne. 
• Today at 12:30pm AEDT, the RBA Governor Philip Lowe will speak on the year ahead. The RBA has said that until annual wage growth nears 3%, interest rates won’t be lifted. Annual inflation is between the RBA’s 2-3% target but aren’t too convinced it will stay there. In terms of interest rates, the central bank is not in a hurry to make changes. 

Trading Ideas:

• Bell Potter maintained their BUY rating on Bathurst Resources (ASX:BRL) and have increased their price target from $0.98 to $1.25. BRL last closed at $0.77, implying 57% share price growth in a year. 
• Trading Central have identified a bullish signal in De Grey Mining (ASX:DEG), indicating that the stock price may rise from the close of $1.18. So we may see higher prices at least in the short term. 

Yesterday, the Aussie share market closed 0.24% lower to 6,971 points in what was a choppy session for the benchmark index. For the month of January, the ASX200 posted a 6.3% loss, its biggest monthly drop since COVID-19 first hit nearly two years ago.

Looking at sector performance, the market was mixed. The tech sector managed to post an impressive gain of 3.7%, while the financials and consumer staples sectors fell the most.

On the ASX200 stock leader-board, six tech stocks led the gains, all enjoying a boost following Wall Street’s strong session on Friday. Afterpay’s parent, Block (ASX:SQ2) jumped 8.1% to $161.41, that’s its biggest one-day gain since it began trading on January 20, but still lower than its opening price of $176.63. Meanwhile, Ansell (ASX:ANN) took a 14.3% hit to its share price following an underwhelming trading update where the company blamed declining demand for single-use gloves and a margin crunch for the profit downgrade. Citi maintained its BUY recommendation on the stock but has reduced its price target to $37.50 (from $45.50). And another stock coming under pressure was NIB Holdings (ASX:NHF) and that comes after JP Morgan slashed its price target by 12% to $6.10. 

As for the most traded stocks by Bell Direct clients yesterday, there were several ETFs that made the top ten. These included the BetaShares A200 and NDQ, Vanguard’s VAS and VGS, as well as ETF Securities’ Battery Tech & Lithium ETF (ASX:ACDC). Also gaining traction yesterday was Rio Tinto (ASX:RIO). Its share price came under pressure amid a renewed focus on the miner’s unresolved royalty dispute with Traditional Owners.

Moving to the US, tech stocks boosted both the Nasdaq and S&P500, while the Dow managed to gain about 400 points. Netflix and Spotify surged more than 10% and 12% respectively following upgrades from Citi, who cited last month’s pullback as an attractive time to buy. And Tesla also gained 8% on Monday after Credit Suisse upgraded the stock.

Today, the futures are suggesting the Aussie share market will open 0.26% higher this morning.

What to watch today:

• The key focus will be on the RBA as it meets for the first time this year. While a rate rise isn’t expected, the RBA could hint that one is nearer than it previously thought. Economists are expecting that the RBA will end its monetary stimulus, upgrade its economic forecasts, and potentially bring forward its interest-rate guidance during this meeting. Also out today, is preliminary retail sales for December.
• Reporting season wise, Credit Corp (ASX:CCP) will be releasing its half year results. Consensus expects the company will deliver NPAT of $42.7m and an interim dividend of 38 cents per share. Other stocks reporting include Centuria Industrial REIT (ASX:CIP) and Vulcan Energy Resources (ASX:VUL).
• In commodities, the oil price continues to rise, trading close to US$90 a barrel, off the back of both political tensions and a supply shortage. The gold price also rose, despite expectations for interest rate hikes by the Federal Reserve. The lithium price is trading up 2.7%. And the spot iron ore price is trading nearly 6% higher to US$143 a tonne.

Trading Ideas:

• Bell Potter has maintained its speculative BUY recommendation on leading Australian producer of goat dairy products, Bubs Australia (ASX:BUB) with an increased price target of $0.70 (previously $0.65). BUB closed 5.62% higher yesterday to $0.47, which implies nearly 50% share price growth in a year.
• Trading Central has a bullish signal on PointsBet (ASX:PBH). This signal indicates that the stock price may rise from the close of $4.86. The balance between buyers and sellers, recently dominated by the bears, is evening out. So, we may see higher prices ahead.

After broad selling across the market as the US Fed signalled rate rises, the local market rebounded on Friday, ending the week on a positive note. The market was boosted by positive earnings results in the US, with Atlassian and Apple providing strong quarterly earnings. 

The ASX closed over 2% higher, with Imugene (ASX:IMU) in the lead. The biotech company gained 10.5% to $31.50, after announcing a new supply agreement with Swiss pharmaceutical company Roche. Meanwhile, gold miners were among the worst performers on Friday, as the price of gold dropped below US$1,800 an ounce. Ramelius Resources (ASX:RMS) fell to a 4-month low, down 8%, while Newcrest Mining (ASX:NCM) fell 6.4%. Both companies also reported quarterly results on Friday. 

The most traded stocks by Bell Direct clients on Friday included BHP (ASX:BHP) and Rio Tinto (ASX:RIO) as the price of iron ore edged higher, in preparation for an increase in demand following the Beijing Winter Olympics. 

European stocks saw their fourth straight week of losses, while US equities ended the week with gains. The Dow had its best day of 2022, up 1.65%. The S&P500 added 2.4% and Wall Street also saw a tech-led rally, with the Nasdaq gaining over 3%. 

Despite the rally on Wall Street, the SPI futures are suggesting the ASX200 will drop 0.23% at the open this morning. 

What to watch today:

• Oil is trading above US$87 a barrel, supported by fears of supply disruptions due to geopolitical risks in Ukraine. Additionally, the market is awaiting OPEC’s meeting next week. So watch energy producers Woodside Petroleum (ASX:WPL) and Santos (ASX:STO). 
• The gold price has dropped below US$1,800 an ounce as the dollar and treasury yields jumped following the Fed’s hawkish updates. 
• The seaborne iron ore price is higher, trading above US$130 a tonne. 
• Pilbara Minerals (ASX:PLS) will release their second quarter update today. We will be looking at whether the company achieved its shipment guidance, as well as pricing with reports of record lithium price levels.
• Gold Road Resources (ASX:GOR) will release its quarterly production report and IGO (ASX:IGO) will release its earnings result. 

Trading Ideas:

• Bell Potter maintain their BUY rating on National Australia Bank (ASX:NAB) with a $31 price target. NAB last closed at $27.25, implying 13.8% share price growth in a year. 
• Trading Central have identified a bullish signal in Breville (ASX:BRG), indicating that the stock price may rise from the close of $27.52 to the range of $32.75 - $34.00. The pattern formed over 18 days which is roughly the period in which the target price range may be achieved, according to standard principles of technical analysis.

The Aussie share market took a dive this week, falling 4.7% (Mon-Thu), amid rising inflation, the global spread of the Omicron variant, and the risk that Russia will invade Ukraine.

In this week’s wrap, Sophia covers:

- (0:31) Codan (ASX:CDA) delivering a positive trading update
- (0:56) Why Adairs (ASX:ADH) lost 27%
- (1:27) The stocks Bell Direct clients were trading the most
- (1:50) The value of having a longer-term investment view
- (4:45) Three important economic news items coming up

Yesterday the ASX was closed for the Australia Day Public Holiday. On Tuesday however, Australian shares tumbled and the ASX200 closed 2.5% or 177.9 points lower. This was the second biggest sell-off this year, with an inflationary shock as CPI came in ahead of consensus and fears about higher interest rates, as well as the invasion of Ukraine. All sectors were in the red, with energy declining the most. 

The best performer was Codan (ASX:CDA), a manufacturer and supplier communications equipment. Its share price advanced 16.9% after reporting a record first-half result. Revenue increased 32% and net profit increased 21%. 

Meanwhile, miners Liontown Resources (ASX:LTR) and Chalice Mining (ASX:CHN) were the worst performers on Tuesday. 

The most traded stocks by Bell Direct clients on Tuesday included major banks National Australia Bank (ASX:NAB), Australia and New Zealand Banking Group (ASX:ANZ) and Westpac (ASX:WBC). Followed by CSL and Telstra (ASX:TLS). 

European stocks closed higher as investors waited for the latest monetary policy announcement from the US Federal Reserve. However, US equities fell in a volatile session after the Federal Reserve Chairman Jerome Powell said there is “quite a bit of room” to raise interest rates before it would harm the economy. Traders took the comments to mean the central bank may be aggressive in tightening policy, and the benchmark 10-year Treasury yield climbed over 1.8%. 

The Fed has now signalled that it could start raising interest rates in March. The central bank said in a statement that “with inflation well above 2% and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate.” 

Following Wall Street, the SPI futures are suggesting the local market will fall 0.3% at the open. 

What to watch today:

• The oil price extended gains, trading above US$87 a barrel on Wednesday, the highest since October 2014. Investors remain concerned about supply and the possibility of energy disruptions if Russia is to invade Ukraine. 
• The price of gold has tumbled, trading below US$1,820 an ounce, amid a stronger dollar after Powell’s comments. 
• The seaborne iron ore price is trading above US$129 a tonne. 
• In economic data, on Tuesday Australia’s consumer price index for the December quarter surged 3.5% year-on-year, ahead of consensus and the RBA’s own forecasts. And today, import and export prices will be released at 10:30am AEDT. 

Trading Ideas:

• Bell Potter maintain their BUY rating on Australia and New Zealand Banking Group (ASX:ANZ), and have increased their price target from $30 to $31. ANZ last closed at $26.77, implying 11.6% share price growth in a year. 
• Trading Central have identified a bullish charting signal in COG Financial Services (ASX:COG), indicating that the price may rise from the close of $1.45 to the range of $1.73 to $1.79. The pattern formed over 147 days which is roughly the period of time in which the target price range may be achieved, according to standard principles of technical analysis. 

Yesterday, the ASX200 closed 0.5% lower to 7,139 points, and it was the technology, utilities and mining stocks that were hit the hardest. On the flip side, the real estate sector managed to post a 1.45% gain. 

The best performing stock was Uniti Group (ASX:UWL), up an impressive 9.3% after it was revealed that multiple approaches have been made towards the company, suggesting an interest in acquiring UWL. Goodman Group (ASX:GMG) was also on the rise, closing 3.5% higher following a broker note out from Macquarie. The broker expects that GMG could upgrade its FY2022 guidance in its half-year results, set to be released on the 17th of February. Macquarie has an Outperform rating and an increased price target to $26.63. Meanwhile Regis Resources (ASX:RRL) led the losses, falling 14.3% after cutting its full-year production guidance because of a geotechnical incident at its Rosemont mine and other operational challenges. Other stocks coming under pressure included Imugene (ASX:IMU), Life360 (ASX:360), and Liontown Resources (ASX:LTR).

In the US, it was a very choppy session, with the Dow plunging over 1,000 points during the session, however managed to make a remarkable comeback to close in the green, up 0.29%. The S&P500 lifted 0.28% and the Nasdaq up 0.63%. Investors began the session dumping tech shares, as they have all month, however those shares rebounded as the day went on with Meta, Amazon and Microsoft closing higher. And it’s expected on Wednesday that the Fed will signal its plans on when it will raise rates, after its two-day meeting.

Now, despite the comeback in the US, the futures are suggesting the Aussie share market will open 1.30% lower this morning. 

What to watch today:

• Q4 production reports will be released by Beach Energy (ASX:BPT), Fortescue Metals (ASX:FMG), Iluka Resources (ASX:ILU), Mineral Resources (ASX:MIN) and St Barbara (ASX:SBM).
• The latest consumer inflation report is out this morning. A high reading could force the RBA to raise interest rates earlier. Also out today, is Business Confidence for December. 
• The oil price fell 1.5% off the back of a stronger dollar and concerns over the possibility of quicker than expected increases to interest rates by the Fed.
• While the gold price gained 0.6% to US$1,843 per ounce as Ukraine tensions boost the safe-haven’s appeal.
• The spot iron ore price traded flat at US$133 a tonne. 
• Paradigm Biopharmaceuticals (ASX:PAR) is holding its AGM today.

Trading Ideas:

• Bell Potter has maintained its BUY recommendation on Australia’s largest horticultural company, Costa Group (ASX:CGC) with a price target of $3.85. CGC closed 1.7% higher yesterday to $2.94, which implies 31% share price growth in a year. 
• Trading Central has a bullish signal on Straker Translations (ASX:STG). This signal indicates that the stock price may rise from the close of $1.50 to the range of $1.78 - $1.86 in the next 24 days, according to standard principles of technical analysis.