Between the Bells

The Aussie market ended last week with gains, with the energy sector rising the most, up 1.6%. The energy sector was led by Oil Search (ASX:OSL), Whitehaven Coal (ASX:WHC), BlueScope Steel (ASX:BSL) and Nickel Mines (ASX:NIC), which all ended the week higher. The financials also performed well on Friday after a volatile week. Meanwhile healthcare declined. 

Imaging software company Pro Medicus (ASX:PME) made the most gains on Friday, however its share price is still down the past month. Aussie investment company, Washington Soul Pattinson (ASX:SOL) gained 3.3%, partly due to its exposure to energy investments. While, TPG Telcom (ASX:TPG) dropped 8.6%, off the back of news that its founder was selling a $335 million stake in the company. 

In US equities, all three major benchmarks closed lower, wrapping up a volatile week. The Omicron variant has had investors concerned, and the US also delivered a disappointing jobs report, with slower than expected job creation last month. The Dow was down 0.2% and the S&P500 down 0.8%. The tech-heavy Nasdaq dropped 1.9%, with Tesla falling over 6% and Zoom falling over 4%. 

There was however a late rally on Wall Street, and the ASX200 is set to open higher this morning. The SPI futures are suggesting a rise of 0.15% at the open. 

Citing concerns on the Omicron strain, Goldman Sachs cut its forecast for US economic growth in 2022 from 4.2% to 3.8%. They say a downside scenario is the most likely outcome, where the virus spreads quicker, but immunity against hospitalisations falls slightly more. 

What to watch today: 

• Oil is trading lower at US$66 a barrel. Watch Santos (ASX:STO) and Woodside Petroleum (ASX:WPL).
• Gold is currently higher, however has fluctuated around $1,770 an ounce, after the disappointing US jobs report.   
• The seaborne iron ore price is lower, trading at US$101.49 a tonne.
• Metcash (ASX:MTS) is set to release its half-year results today. Ord Minnett analysts expect the company to report a net profit of $141 million for the past 6 months, allowing for an interim dividend of 10.5 cps. 

Trading ideas:

• Bell Potter have maintained their BUY rating on chemical manufacturing company DGL Group (ASX:DGL) and have decreased their price target from $3.05 to $3, after the company held its AGM. DGL last closed at $2.40, implying 25% share price growth in a year. 
• Goldman Sachs have a BUY rating on Healthco Healthcare and Wellness (ASX:HCW), with a $2.56 price target. The broker says that the healthcare real estate sector in Australia is in its infancy, with potential for growth through acquisitions and ground up development.
• Trading Central’s analysts have flagged a bullish signal in Hastings Technology Metals (ASX:HAS). This bullish signal indicates that the stock price may rise from the close of $0.25 to the range of $0.30 to $0.32, within 28 days.  

The new Omicron COVID-19 variant pushed global markets lower this week, with the Aussie share market trading down 0.7% (Mon-Thu). Plus, Aussie investors digested key economic data, including better-than-expected September quarter GDP. 
In this week’s wrap, Sophia covers:

• (0:28) The latest GDP and balance of trade data
• (1:51) Top performer, Collins Foods' (ASX:CKF) strong half-year results
• (2:11) Lynas Rare Earths' (ASX:LYC) gain after broker upgrade
• (3:10) Bell Potter's must have stocks in a portfolio
• (6:50) What stocks Bell Direct clients were trading this week

As the omicron variant continues to spread, and the Federal Reserve flags that they will consider winding down bond purchases sooner, the Aussie share market closed 0.28% lower, a near two-month low. The market did manage to recover in the afternoon after better-than-expected GDP data and a positive outlook for Chinese growth. The lockdowns in NSW and Victoria drove a 1.9% contraction in the economy for the third quarter, which was less than the 2.7% decline expected. As household spending crashed, levels of savings surged. 

Nearly all sectors were in the red: consumer staples, utilities and real estate sectors led the losses, while the materials, healthcare and financial sectors managed to post gains. The top stocks included South32 (ASX:S32), Waypoint REIT (ASX:WPR) and Lynas Rare Earths (ASX:LYC). GUD Holdings (ASX:GUD) headed south, after a discounted share placement. Other worst performers included Pro Medicus (ASX:PME) and IDP Education (ASX:IEL).

The most traded stocks by Bell Direct clients yesterday included Fortescue Metals (ASX:FMG), Telstra (ASX:TLS) and OZ Minerals (ASX:OZL). 

In the US, all three benchmarks gave up decent gains and turned negative after the first omicron case was confirmed in the US. The Dow closed over 450 points lower, the S&P500 was down 1.2% and the Nasdaq fell 1.8%. Travel stocks were hit hard: American Airlines, Delta Airlines and United Airlines all fell over 7%. And on the data front, private payroll data for November showed 534,000 jobs were added, above expectations of 506,000.

Following the negative session over on Wall Street, the futures are suggesting the Aussie share market will fall about 1.1% at the open.

What to watch today: 

• Economic news out today includes Australia’s balance of trade data for October (difference between what we export vs. what we import). Australia's trade surplus decreased to A$12.24 billion in September and consensus expects trade surplus to decrease again to A$11 billion in October. Retail sales for November and home loans for October will also be released today.
• Moving to commodities, oil prices fell into the red in late afternoon trading on Wednesday. The WTI settled 1.63% lower to US$65.10 a barrel. The gold price rose, as investors used the safe-haven asset as a hedge against wider market volatility and demand was boosted as the US dollar fell. And the seaborne iron ore price traded 8% higher to US$103 a tonne. 
• A few companies going ex-dividend today, including ALS Limited (ASX:ALQ), Fisher & Paykel Healthcare (ASX:FPH), Pendal Group (ASX:PDL) and TechnologyOne (ASX:TNE).
• Portman’s and Peter Alexander owner Premier Investments (ASX:PMV) holds its AGM today. 

Trading Ideas: 

• Citi has a BUY rating on gold miner, Northern Star Resources (ASX:NST), with a price target of $12. NST recently signed a funding deal with Quebec-based gold miner Osisko Mining, whereby under the deal, NST will contribute $169 million to Osisko via a convertible senior unsecured debenture. NST closed flat yesterday at $9.44, which implies around 27% share price growth in a year. 
• Trading Central has detected a bullish charting signal in pharmaceutical company Starpharma (ASX:SPL). This signal indicates that the stock price may rise from the close of $1.21 to the range of $1.35-$1.39 in the next 32 days, according to stand principles of technical analysis. 

Yesterday morning, Australian shares made an impressive rebound, rising 1.3% at its highest level of the session, however soon after started to decline and closed with a smaller gain of 0.2%. Selling began off the back of reports from the CEO of Moderna, who told the press yesterday that existing vaccines will struggle against the new omicron COVID-19 variant. This saw the US futures for last night decline and Aussie shares drop as well. By close of trade, communications services advanced the most, up 1.8%. This was followed by real estate and consumer staples. Meanwhile utilities declined the most, down 1.2%. 

Collins Foods (ASX:CKF) gained 12.6% off the back of reporting its half-year results. The KFC owner delivered a 9.5% increase in revenue to a record $534.2 million, and a 31.6% increase in underlying NPAT to $28.9 million. CKF also reported a fully ranked interim dividend up 14% to 12 cps. The worst performing stock of the day was St Barbara (ASX:SBM), and other gold miners such as Perseus Mining (ASX:PRU) and Regis Resources (ASX:RRL) also declined. 

In US equities, all three major benchmarks closed lower, after Federal Reserve chairman Jerome Powell said the central bank will discuss speeding up the bond-buying taper at its December meeting. The Dow dropped 650 points, the S&P 500 down 1.9% and the tech heavy Nasdaq down 1.6%. 

Taking direction from the broad sell off in New York, the ASX200 is set to open lower, with the SPI futures suggesting a drop of 0.5%. 

What to watch today:

• Economic data out today includes Manufacturing PMI for November, as well as third quarter GDP, which will be released at 11:30am AEDT. 
• As US investors repositioned for a faster taper by the US Central Bank, oil, gold and iron ore all fell. The oil price is down 4.5%, trading at US$66 a barrel. The gold price is trading at just below US$1,775 an ounce as the dollar index and yields reversed early losses. And the seaborne iron ore price is now slightly higher at US$94 a tonne. 
• Now around 20 stocks and ETFs are set to go ex-dividend today, which often sees shares fall. Some include Aristocrat Leisure (ASX:ALL), Incitec Pivot (ASX:IPL) and United Malt Group (ASX:UMG). 

Trading ideas:

• Ord Minnett retain their BUY rating on several gold mining stocks, advising three ways to play the gold market. Their first strategy recommendation is to buy a basket of liquid stocks with strong exposure to passive products, to mitigate risk. The second, is for the stock to have strong fundamentals and upcoming catalysts. And the third involves long term investments. Some of the gold miners Ord Minnett retained their buy rating on, include Alkane Resources (ASX:ALK) with a $1.50 price target, Gold Road Resources (ASX:GOR) with a $1.70 price target, and Aurelia Metals (ASX:AMI) with a $0.95 target. 
• Bullish charting signals have been identified in Ioneer (ASX:INR) and 4D Medical (ASX:4AX), according to Trading Central. 

The ASX200 closed in the red yesterday, down 0.5%, in what was a rollercoaster session for the benchmark index, driven by investor fears about the new omicron COVID-19 variant. 

Only two of the eleven sectors were higher, materials and information technology. While the real estate and energy sectors came under pressure, down 1.4% each. 

The biggest gainers included HUB24 (ASX:HUB), Bapcor (ASX:BAP) and Domino’s Pizza (ASX:DMP). Mineral Resources (ASX:MIN) lifted 3.4% after the company announced it had entered into a port and rail agreement. And healthcare company, Healius (ASX:HLS) benefited from elevated demand for COVID-19 testing services. Travel stocks suffered as Aussie states initiated tougher quarantine rules on arrivals from nine African countries. The largest falls however, were for shopping centre owners, Unibail-Rodamco-Westfield (ASX:URW) and Vicinity Centres (ASX:VCX). 

In the US, all three benchmarks closed higher and recovered from Friday’s sell-off. This follows President Joe Biden stating that that economic lockdowns in response to the omicron COVID-19 variant are currently off the table. Mega-cap tech stocks were amongst the biggest winners. 

Today, the Aussie share market is set to rise amid a broad rebound in equities and commodities. The futures are suggesting a lift of 0.6%. 

What to watch today:

• Economic data out today includes building permits and private sector credit. 
• Looking at commodities, following its worse day in 2021, oil prices bounced back on Monday. The WTI gained 2.6% to settle at US$69.95 a barrel. The gold price eased, as the dollar firmed, and the spot iron ore price traded down 4% to US$96.50 a tonne. 
• KFC owner, Collins Foods (ASX:CKF), is set to release its half year results. While no guidance has been given, the business plans to build 9 to 12 KFC restaurants in Australia this financial year. Macquarie is bullish on the stock, currently holding an outperform rating and $14.75 price target.
• Companies holding their AGMs today include Starpharma (ASX:SPL), Orocobre (ASX:ORE) and Omni Bridgeway (ASX:OBL).
• Spark Infrastructure Group (ASX:SKI) is set to go ex-dividend today.

Trading Ideas:

• Bell Potter have maintained their BUY rating on technology hardware and equipment company, EROAD (ASX:ERD) with a decreased price target of $5.95 (previously $6.05). This follows EROAD’s mixed first half 2022 result, which was impacted by slightly higher operating and R&D costs, while group revenue was up 4.8% year-on-year. Separately, EROAD is in the early stages of expanding its platform offering and enterprise sales initiatives in North America and Australia. EROAD closed flat yesterday at $4.70, which implies 26.6% share price growth in a year.
• Bullish charting signals have been identified in Bannerman Energy (ASX:BMN), Redbubble (ASX:RBL) and Sparc Technologies (ASX:SPN), and that’s according to Trading Central. 

We’ve seen a broad sell off across global financial markets amid fears of the new COVID-19 variant identified in South Africa. It has sparked concerns that the virus could again set back economic recoveries worldwide. 

The Aussie market tumbled 1.7% on Friday. All sectors declined and energy stocks took the biggest hit felling 4.5%. Gold miners finished lower most of last week, however rebounded on Friday after the gold price pushed higher. Meanwhile, travel stocks were hit hard, amid fears of the omicron variant. Webjet (ASX:WEB), Qantas (ASX:QAN), Corporate Travel Management (ASX:CTD) and Flight Centre (ASX:FLT) all fell. Machine intelligence company Appen (ASX:APX) was the worst performer on Friday after Macquarie downgraded APX to an underperform rating and decreased its price target to $9.50 from $11.80. 

US equities fell in a short post-thanksgiving session. The Dow had its worst day of the year, falling 900 points, or 2.5%. The S&P500 fell 2.3%, while the Nasdaq fell 2.2%. 

Today, the ASX200 is set to fall for a second session, with the SPI futures suggesting a sharp drop of 1.4%. 

What to watch today:

• The oil price has dropped 13% - its worst day of the year, as the omicron variant sparks global demand concerns. Oil is trading at US$68 a barrel. Oil markets had already been under pressure, following the announcement of a coordinated release of crude reserves. So keep watch of energy producers such as Woodside Petroleum (ASX:WPL) and Santos (ASX:STO). 
• Gold is trading higher at US$1,792 an ounce. Watch Newcrest Mining (ASX:NCM), Northern Star Resources (ASX:NST) and other gold mining stocks.
• Keep an eye on iron ore stocks like BHP Group (ASX:BHP) and Fortescue Metals (ASX:FMG), after iron ore prices tumbled on Friday night. 

Trading ideas:

• Bell Potter maintained their BUY rating on Australia and New Zealand Bank (ASX:ANZ) and have kept their price target unchanged at $31. Bell Potter have noted significant opportunities from decarbonising the economy and the bank is well positioned to facilitate to net zero emissions. ANZ closed on Friday at $27.07, implying 14.5% share price growth in a year. 
• UBS have retained their BUY rating on Adairs (ASX:ADH) and have increased their price target from $5.40 to $5.90. Adairs have purchased vertically integrated furniture retailer Focus on Furniture for $80 million. Meanwhile, Ord Minnett upgraded ADH to Accumulate from a Hold, and increased their price target from $4.00 to $4.10. 
• Bullish charting signals have been identified in Weebit Nano (ASX:WBT), Zenith Minerals (ASX:ZNC) and Jervois Global (ASX:JRV), according to Trading Central. 

The Aussie share market traded slightly higher this week, up 0.15% (Mon-Thu). The materials and utilities sectors made strong gains, while the information technology sector declined the most. 

In this week’s wrap, Sophia covers:

• (0:58) EML Payments' (ASX:EML) impressive gain after regulatory resolution
• (2:23) Why the iron ore price lifted this week
• (3:20) TechnologyOne (ASX:TNE) tumbling despite a positive report card
• (4:11) Current broker recommendations on commodities
• (7:07) What stocks Bell Direct clients were trading this week
• (7:47) Economic news items to watch out for

Watch the weekly wrap here.

The ASX200 closed 0.15% lower yesterday, however, is still tracking 1% higher for the month of November. 

Energy stocks led the gains, benefiting from a firmer crude oil price. Utilities advanced nearly 1% and both the Real Estate and Healthcare sectors managed to post small gains. The rest of the market closed in the red, with the Tech sector down the most, as bond yields climbed. 

The top stocks of the day included Energy stocks like Beach Energy (ASX:BPT), Santos (ASX:STO) and Woodside Petroleum (ASX:WPL). Lendlease Group (ASX:LLC) rose 3.2%, as the company is in discussions with Google to potentially develop data centres. And leading the declines was TechnologyOne (ASX:TNE). Its share price has continued to slide since the release of its full year results on Tuesday. 

The most traded stocks by Bell Direct clients yesterday included AVZ Minerals (ASX:AVZ), Commonwealth Bank (ASX:CBA) and Westpac (ASX:WBC), while both Vanguard’s Australian Shares ETF (ASX:VAS) and International Shares ETF (ASX:VGS) made the top ten.

In the US, the Dow closed slightly lower, while the S&P500 and Nasdaq managed to post gains, as the recent jump in bond yields cooled down. 

This morning, the futures are suggesting the Aussie share market will open slightly higher this morning, up 0.12%

What to watch today:

• In economic data, Private Capital Expenditure for Q3 will be released this morning. This measures the change in the total inflation-adjusted value of new capital expenditures made by private businesses. 
• Oil prices steadied as investors questioned Biden’s strategic oil stockpile release. The crude oil price is currently trading at US$78.28. 
• The gold price came under pressure following the release of strong US economic data, which appears to be supporting an increase in interest rates. And the spot iron ore price was up 2% to US$92.50 a tonne, while the seaborne iron ore price trades higher at US$94.33
• Fisher & Paykel Healthcare (ASX:FPH) released their half year results this morning. Compared to the same period last year, NPAT was down 2%, operating revenue was also down 1%, while its interim dividend was increased by 6% to 17cps. 
• IOOF Holdings (ASX:IFL), Evolution Mining (ASX:EVN), NRW Holdings (ASX:NWH) Regis Resources (ASX:RRL), Kogan (ASX:KGN) and Ramelius Resources (ASX:RMS) will hold their AGM today.
• Nufarm (ASX:NUF) and Australian Vintage (ASX:AVG) are set to go ex-dividend today.

Trading Ideas: 

• Bell Potter have maintained their BUY rating on funeral business, Propel Funeral Partners (ASX:PFP) and have increased its price target to $5 (previously $4.90). PFP closed 3% higher yesterday to $4.44, which implies 12.7% share price growth in a year.
• Bullish charting signals have been identified in Strandline Resources (ASX:STA), Capricorn Metals (ASX:CMM) and OM Holdings (ASX:OMH), according to Trading Central. 

The ASX200 closed 0.8% higher, with Energy and Materials sectors making the strongest gains. All but three sectors advanced. 

Iron ore miners rose higher in response to the higher iron ore and oil prices in the spot market. Fortescue Metals (ASX:FMG) advanced almost 10% by close of trade. 

While gold miners fell yesterday, as the price of gold fell to a three-week low and the Australian dollar was down to a seven-week low. This saw Silver Lake Resources (ASX:SLR) down 5.6%. 

Meanwhile Bapcor (ASX:BAP) was the worst performer, after the company’s founder and CEO announced his departure. 

In US equities, the S&P500 rose 0.2% and the Dow rose 0.6%. However, rising treasury yields weighed down on the major tech stocks and the tech-heavy Nasdaq closed 0.5% lower, falling for the second consecutive day. 

The ASX200 is set to open flat this morning, with the SPI futures suggesting a modest rise of just 0.01%. 

What to watch today:

• The oil price is up 2.3% after an announcement of a coordinated release of oil reserves in the US, India, China, Japan, Republic of Korea, and the UK, in a bid to depress prices.
• Gold is trading below US$1,800 an ounce, the lowest level in three-weeks, following Jerome Powell’s reappointment. 
• Spot iron ore is trading almost 5% higher and the seaborne iron ore price is trading higher at US$94 a tonne. 
• Webjet (ASX:WEB) released its half year results this morning. The company reported significant positive cash generation, with cash surplus of $3.5 million per month, as well as increases in Total Transaction Volume, Revenue and EBIT.
• Harvey Norman (ASX:HVN) and Ramsay Health Care (ASX:RHC) will hold their AGM today. 
• Graincorp (ASX:GNC), HGL Limited (ASX:HNG) and Whitefield (ASX:WHF) are set to go ex-dividend today. This often sees shares fall as investors take their profits. 

Trading ideas:

• Bell Potter maintain their BUY rating on Nickel Mines (ASX:NIC) and have increased their price target from $1.42 to $1.68. Nickel Mines has advanced over 17% over the last week, and closed yesterday at $1.31, implying 27.8% share price growth in a year.
• Bullish charting signals have been identified in Tabcorp Holdings (ASX:TAH), Orocobre (ASX:ORE) and Centaurus Metals (ASX:CTM) according to Trading Central. 

The ASX200 started the week in the red, down 0.6% yesterday, with travel stocks coming under pressure and all four of the big banks closing between 1-2% lower.

Nickel Mines (ASX:NIC) closed about 8% higher after it signed a memorandum of understanding with Shanghai Decent Investment as a framework for future development projects. 

The US market was mixed. The Dow managed to gain 0.05%, however both the S&P500 and Nasdaq came under pressure. Biden announced that he would renominate Jerome Powell to continue to lead the Federal Reserve, which saw bond yields rise and bank stocks gain, while tech stocks lost strength. 

After a mixed session on Wall Street, the futures are suggesting the Aussie share market will open slightly lower this morning, down 0.16%.

What to watch today:

• Building Permits for October will be released today, which essentially shows the monthly change in the number of total dwelling units approved, including building activity carried out on existing buildings.
• Oil prices rose on Monday but continue to remain under pressure given rising COVID-19    cases in Europe. While the gold price fell over 2% as the US dollar firmed and off the back of Powell’s renomination.
• Watch BHP Group (ASX:BHP) and Woodside Petroleum (ASX:WPL) following WPL’s $40 billion deal to absorb BHP’s petroleum assets via an all stock merger was finalised by both companies’ boards yesterday. 
• TechnologyOne (ASX:TNE) is set to release its full year results today. 
• AGMs today include Brickworks (ASX:BKW), Mayne Pharma (ASX:MYX), Monadelphous Group (ASX:MND), Link Administration Holdings (ASX:LNK) and Pro Medicus (ASX:PME).
• Amcor (ASX:AMC) is set to go ex-dividend today.

Trading ideas:

• Bell Potter have maintained their BUY rating on mineral drilling contractor, DDH1 (ASX:DDH) and have increased its price target to $1.52 (previously $1.48). DDH closed 1.3% higher yesterday, which implies 29% share price growth in a year.
• Bullish charting signals have been identified in Silex Systems (ASX:SLX), People Infrastructure (ASX:PPE) and Lake Resources (ASX:LKE) and that’s according to Trading Central.