Between the Bells

The market finished the week with three straight days of gains, closing with 0.4% higher on Friday. The communications services sector gained 1.65%, while energy and information technology sectors were the only two sectors in the red.

IT company Link Group (ASX:LNK) led Friday’s advance, after they received a takeover bid from Carlyle Group, a private equity company in the US. The news saw LNK rise 8.6%. While, Afterpay (ASX:APT) fell more than 5%, after its soon to be listed US parent company Square reported third quarter results which saw its price tumble. 

Stocks rallied on Wall Street with all three major benchmarks recorded a winning week. The S&P500 up 0.4%, the Dow up 0.6% and the Nasdaq up 0.2%. 

Following US equities, the SPI futures are suggesting the ASX200 will rise 0.3% at the open. 

What to watch today:

• Keep watch of Sydney Airport (ASX:SYD). Over the weekend they received the binding offer for IFM Investors and Global Infrastructure Partners to takeover Sydney Airport for $32 billion. The bid is worth $8.75 cash per share and the airport’s board are expected to accept the bid today. 
• Australia and New Zealand Bank (ASX:ANZ) and Macquarie Group (ASX:MQG) go ex-dividend today. 
• Commonwealth Bank of Australia (ASX:CBA) was one of the most traded stocks by Bell Direct clients on Friday. Broker ratings on CBA vary. The stock is a Bell Potter BUY, while other brokers are not as positive on the stock. CSL (ASX:CSL) was another highly trading stock, gaining over 3% over the week and is now trading at $314. 
• The oil price jumped more than 3% higher, after OPEC agreed to stand by their plan to raise oil output by 400,000 barrels per day until December. Gold is also trading higher, as the Bank of England held interest rates at record lows and positive job data came through in the US. 
• And the seaborne iron ore price has fallen to US$94.43 per tonne. 

Trading ideas:

• Bell Potter have upgraded their rating on coal mining company Bathurst Resources (ASX:BRL) from a HOLD to a BUY, maintaining their price target at $0.98. 
• Bullish charting signals have been identified in Firefinch (ASX:FFX), Strategic Elements (ASX:SOR) and Nufarm (ASX:NUF), according to Trading Central. 

Yesterday, the ASX200 rallied 0.9%, its best session in a month. Supporting the market was strong gains from the materials sector and major banks, while the tech sector closed in the red, down 0.19%. 

The best performer of the ASX200 was AMP (ASX:AMP), its shares closed 9.3% higher after the company agreed to divest its 19.13% equity interest in Resolute Life Australasia for a consideration of $524 million to Resolution Life Group. Tyro Payments (ASX:TYR) was the worst performer, tumbling over 15% after its AGM update. 

In the US, all three benchmarks closed at new records following the Fed Reserve confirming that it would begin winding back some of its COVID stimulus later this month and will also reduce buying by $15 billion a month. This puts it on track to end quantitative easing by the middle of next year, which is in line with expectations. 

After a positive session on Wall Street, the futures are suggesting the Aussie share market will open 0.50% higher this morning.

What to watch today: 

• In economic news, Australia’s balance of trade data for September will be released today at 10:30am AEDT. That’s the difference between what we export vs. what we import. It’s calculated by subtracting the value of the goods and services Australia buys from overseas from the value of the goods and services we sell to other countries. Australia’s trade surplus, increased to a record high of $15.08 billion in August. Third quarter retail sales volumes will also be released today. 
• Companies holding their AGMs today include Domain (ASX:DHG), Credit Corp Group (ASX:CCP), Ingham’s Group (ASX:ING), Zip (ASX:Z1P) and Myer (ASX:MYR).
• The most traded stocks by Bell Direct clients yesterday, included three of the big four banks – Westpac (ASX:WBC), CBA & ANZ, as well as lithium company, Lake Resources (ASX:LKE).
• Medusa Mining (ASX:MML) is set to go ex-dividend today. 
• Oil prices fell on Wednesday after US crude stocks rose more than anticipated. The WTI crude oil price fell about 4.7% to US$80 a barrel. The gold price also came under pressure, down nearly 1%, and the iron ore price continues to be dragged into a bear market off the back of weakening steel production and an economic slowdown in China.

Trading Ideas:

• Bell Potter has reiterated its BUY recommendation on agricultural chemical company, Nufarm (ASX:NUF), with an increased price target of $5.35 (previously $5.30). NUF is currently up nearly 14% YTD and closed 4.2% higher yesterday to $4.67. 
• Bullish charting signals have been identified in Imugene (ASX:IMU), Syrah Resources (ASX:SYR) and Nanosonics (ASX:NAN) and that’s according to Trading Central.

Yesterday, the ASX200 fell about 46 points in a volatile session. Real Estate shares rebounded, while Materials dropped the most. Goodman Group (ASX:GMG) advanced 5.6%, after a positive trading update. Whitehaven Coal (ASX:WHC) was the worst performer. Its shares fell alongside the price of Chinese thermal coal. 

In New York overnight, the three major benchmarks closed at a record for the third session in a row. Investors are waiting on a key Federal Reserve decision. 

Following US equities, the SPI futures are suggesting the Aussie share market will rise 0.97% at the open. 

What to watch today:

• In economic news, yesterday, the RBA held the cash rate at its record 0.10%. The RBA also discontinued its monetary policy measures, its yield curve control, and they will drop the 10-point target on the 3-year bond, expiring 2024. 
• Services PMI was released this morning for October, increasing to 52 from 45.5 in September. This indicates a return to expansion, after three months of contraction due to lockdown restrictions. 
• AGMs today include Domino’s Pizza (ASX:DMP), Worley (ASX:WOR), Cedar Woods Property (ASX:CWP) and Tyro Payments (ASX:TYR). 
• The most traded stocks by Bell Direct clients yesterday were Westpac (ASX:WBC) and Commonwealth Bank of Australia (ASX:CBA), as financials fell, and investors took profits. 
• Iron ore declined overnight, with BHP and Rio Tinto closing lower in both London and New York. Expect ASX-listed BHP and RIO to follow. The seaborne iron ore price is currently trading more than 3% lower at US$99. 
• Oil is also trading lower as markets await OPEC’s meeting. Spot gold is trading lower, below $1,790 amid a weaker dollar. And the coal price has tumbled 6%, as China aims to boost coal production. 

 Trading ideas:

• Bell Potter have upgraded software design company Altium (ASX:ALU) from a HOLD to a BUY and have increased their price target by 31% to $42.50, taking into account earnings changes as well as market movements and time creep. ALU closed yesterday at $37.33, implying 13.8% share price growth in a year. 
• Bullish charting signals have been identified in Evolve Education Group (ASX:EVO), Aristocrat Leisure (ALL) and Australian Strategic Materials (ASX:ASM), according to Trading Central.   

Yesterday, the ASX200 started the month of November with an advance of 0.6%, supported by a busy session of merger and acquisition activity. All sectors of the market gained ground, except for the Financials sector which fell 0.48%.

In the US, the Dow, S&P500 & Nasdaq all closed at record highs to start the month of November. Stocks linked to the economic recovery performed well, including Ford, airlines, and retailers. While mega cap tech stocks underperformed. 

After a positive session on Wall Street, the futures as at 7:40am AEDT this morning are suggesting the Aussie share market will open 0.18% higher.

What to watch today:

• In economic news, the Manufacturing PMI for October was released yesterday. The PMI in October was revised to 58.2, which marked the strongest expansion in factory activity in 4 months. As a reminder, given the reading came in above 50 points, that indicates an expansion of the manufacturing sector compared to the previous month. 
• Today, the RBA, meets at 2:30pm AEDT to discuss the cash rate. While it’s expected that central bank will keep rates on hold at the current historical low of 0.1%, it’s also expected that the RBA will signal the end of quantitative easing, scrap its yield target framework, and could bring forward its rate hike guidance. 
• Keep an eye on travel stocks today after international travel resumed yesterday in Australia for the first time in 600 days. Travel stocks posted solid gains yesterday. Qantas (ASX:QAN) was up 3% and Flight Centre (ASX:FLT) up 2%.
• Brickworks (ASX:BKW) goes ex-dividend today. 
• Oil prices rose sharply on strong demand outlook, despite China fuel reserves releasing. And the gold price also rose as the dollar eased.

Trading Ideas:

• Bell Potter has reiterated its BUY recommendation on iron ore company, Fortescue Metals (ASX:FMG), with a revised price target of $19.75. FMG is currently down nearly 39% YTD, and closed 2.9% higher yesterday to $14.33, which implies 37.8% share price growth. 
• Bullish charting signals have been identified in AVZ Minerals (ASX:AVZ), Hazer Group (ASX:HZR) and Seek (ASX:SEK) and that’s according to Trading Central.

On Friday, the ASX200 had its worst day in 4-weeks, ending the month slightly lower, falling 0.1% in October. All sectors closed in the red on Friday. Some of the best performers on Friday were GUD Holdings (ASX:GUD) up 6.9%. ResMed (ASX:RMD) also made gains. Its trading update saw revenue climb 20%. Unibail-Rodamco-Westfield (ASX:URW) declined the most despite its centres reopening. 

European markets closed mixed, while the US stock market finished at record highs. This was despite disappointing earnings reports from Amazon & Apple.

Following US equities, the SPI futures are suggesting the ASX200 will rise 0.9% today. 

What to watch today: 

• In economic news, on Friday the Producer Price Index was released. That’s business inflation data, which rose 1.1% in September, which was more than expected. Economic data to look out for today includes the Manufacturing PMI for October. Forecasts expect PMI to be 57.3. PMI above 50 represents an expansion from the month prior. Home Loan data for September will also be released today at 10:30am AEDT.  
• More than 15 stocks and ETFs are set to go ex-dividend today. Keep in mind this often sees shares fall as investors take profits. 
• The oil price is trading higher, above US$83, ahead of OPEC’s meeting on Thursday, with expectations to maintain production cuts. 
• Gold is trading lower as treasury yields are higher, and the dollar is lower. Coal is trading at its lowest levels since the end of September as China struggles with the energy crisis. And the seaborne iron ore price is trading lower at US$121. 

Trading ideas:

• Bell Potter maintain their BUY rating on copper production company Aeris Resources (ASX:AIS), on a 4% lower price target of $0.22. They lowered FY22 earnings forecast by 20%, on higher costs and lower production. AIS last closed at $0.16, implying 37.5% share price growth in a year. 
• Bullish charting signals have been identified in Syrah Resources (AS:SYR), Incannex Healthcare (ASX:IHL) and Alpha HPA (ASX:A4N), according to Trading Central. 

The Aussie share market enjoyed a gain of 0.2% this week (Mon-Thu). Australia's core inflation rate hit a six-year high and all eyes will be on the RBA minutes. 
 
 In this week’s wrap, Sophia covers: 

• (0:42) Reliance Worldwide (ASX:RWC) gaining 10% after an announcement 
• (1:45) Two stocks that saw big gains this week
• (2:19) An idea to compliment US mega cap exposure 
• (3:08) What stocks Bell Direct clients were trading this week
• (3:42) Six economic news items to watch out for 

Watch the weekly wrap video here.

Yesterday, the ASX200 struggled to find direction for most of the day, finishing flat as investors contemplated the possibility of interest rate hikes happening sooner rather than later. The best performing sector was the Communication Services sector, up 2%, while the Consumer Staples sector fell the most, down 2%. Uniti Group (ASX:UWL) led the gains, up 6%, following the company announcing it will be under taking a share buyback. The worst performer was a2 Milk (ASX:A2M). Investors were selling down a2 Milk shares, after the company released an update that revealed its margins were significantly lower compared to pre-COVID-19 levels. 

In the US, the earnings season rally seems to have lost some of its momentum, with the S&P500 slipping from its record high and the Dow falling for the first time in four days. The Nasdaq closed flat, despite Microsoft and Alphabet reporting results that exceeded estimates. 

After a mixed session on Wall Street, the futures are suggesting the Aussie share market will open 0.54% lower this morning.

What to watch today:

• In economic news, yesterday, the ABS released its key inflation reading. The Consumer Price Index (CPI) rose 0.8% this quarter. Over the twelve months to the September 2021 quarter, the CPI rose 3.0%. The quarterly rise was driven primarily by a 7.1% jump in fuel and a 3.3% jump in new dwelling purchase costs. Today, investors will hear from RBA Deputy Governor Guy Debelle who will respond to the latest inflation figures. 
• Australia and New Zealand Bank (ASX:ANZ) and Fortescue Metals (ASX:FMG) are set to report today. ANZ is set to release its full year results this morning. FMG will release its first quarter update, which should provide investors with an idea of just how badly the pullback in iron ore prices has impacted its margins. 
• AGMs wise, there’s 14 companies holding theirs today. To list a few, South32 (ASX:S32), JB Hi-Fi (ASX:JBH) and Boral (ASX:BLD).
• Companies going ex-dividend today include Bank of Queensland (ASX:BOQ) and Centrepoint Alliance (ASX:CAF).
• Oil prices fell on Wednesday after crude stockpiles rose more than expected and fuel inventories unexpectedly increased last week in the US, the world’s largest oil consumer. The gold price steadied off the back of a softer dollar and US bond yields retreating, currently trading at $US1,796 an ounce. And the sea borne iron ore price continues to trade at around US$122 a tonne.

Trading ideas:

• Bell Potter has reiterated its BUY recommendation on IT company, Life360 (ASX:360), a company best known for its family location sharing app. Bell Potter has increased Life360’s price target by 16% to $12.50 (previously $10.75). 
• Bullish charting signals have been identified in Carnarvon Petroleum (ASX:CVN), Uniti Group (ASX:UWL) and Tyro Payments (ASX:TYR), according to Trading Central.

Yesterday the Aussie share market closed flat. The Tech sector was the best performer, gaining 1.34%. The worries for BNPL stocks were eased by Macquarie who don’t see an impact on the removal of the no-surcharge rule and kept their outperform rating on Afterpay (ASX:APT). Meanwhile Utilities fell the most. 

Casino operators were outperformers yesterday. Crown Resorts (ASX:CWN) rose 8.7%, after receiving approval to continue operating its Melbourne casino, despite regulatory breaches. 

Pilbara Minerals (ASX:PLS) also advanced after finalising a joint venture agreement with Korean company POSCO, to operate a lithium conversion facility in South Korea. 

Mineral Resources (ASX:MIN) was the worst performer after a quarter update that saw a decline in lithium and iron ore production.  

US equities closed higher overnight. Amid strong earnings reports, the Dow rose for the third straight day, the S&P500 rose 0.2% and the Nasdaq also made slight gains. In economic data, US consumer confidence rose in October. 

Following US equities, the SPI futures are suggesting the ASX200 will rise 0.05% this morning.

What to watch today:

• In economic news, a key update on the inflation rate will be released at 10:30am AEDT. 
• Telstra (ASX:TLS) has announced their acquisition of Digicel Pacific and brokers are optimistic on the news. Goldman Sachs has retained its BUY rating. Morgans have an ADD rating and Credit Suisse have an OUTPERFORM rating. 
• Kogan.com (ASX:KGN)’s value has almost halved this year. The stock could potentially fall out of the ASX200 in December’s quarterly rebalance. 
• The oil price is trading 0.8% higher, while gold and coal are trading lower. The seaborne iron ore price is trading slightly higher at US$122. 

Trading ideas:

• Bell Potter maintain their BUY rating on gold mining and production company Regis Resources (ASX:RRL) and have cut their price target from $4.05 to $3.81. 
• Bullish charting signals have been identified in Syrah Resources (ASX:SYR), Pantoro (ASX:PNR) and Nanosonics (ASX:NAN), according to Trading Central. 

The ASX200 lifted 26 points or 0.34%, which marks the third straight gain, with the market now tracking 1.5% higher for the month of October. Sectors wise, the energy sector rose the most, up 2.6%, fuelled by further gains in oil prices. The tech sector fell the most, down 0.7%.

The best and worst performers of the ASX200 yesterday included Mineral Resources (ASX:MIN) on top of the leader board, after the company announced that operations would restart at the Wodgina Lithium Mine, in the Pilbara region of WA. The worse performing stock was Perpetual (ASX:PPT), which was down 5%, and this may be due to profit taking after its strong gains last week. 

In the US, equities rose to record highs on Monday as investors prepare for a huge week of earnings from heavyweight tech companies. The Dow and S&P500 both closed at record highs and the Nasdaq lifted 0.9%, taking it just 1% off its record high. 

Following the gains on Wall Street, the futures are suggesting the Aussie share market will open 0.19% higher this morning.

What to watch today:

• There’s a few companies holding their AGMs later today. These include gold producer Regis Resources (ASX:RRL), Redbubble (ASX:RBL), Sealink Travel Group (ASX:SLK), medical device company Polynovo (ASX:PNV) and Bega Cheese (ASX:BGA).
• Southern Cross Electrical Engineering (ASX:SXE) goes ex-dividend today. 
• One of the most traded stocks yesterday by Bell Direct clients was mineral exploration company, Andromeda Metals (ASX:ADN). Its shares came under pressure, falling 11.9% after the market digested its quarterly update. 
• Oil prices were mixed - the WTI crude oil price was down 0.1% to US$83.68 a barrel, while the Brent crude oil price rose 0.5% to $85.93 a barrel, as global supply remained tight amid strong demand worldwide. The gold price rose 1% higher on lower US yields and the sea borne iron ore price traded slightly lower at US$122 a tonne.

Trading ideas:

• Bell Potter has reiterated its BUY recommendation on death care services company, Propel Funeral Partners (ASX:PFP) with a price target of $4.90. The stock is currently trading up 48% YTD and at its current share price of $4.21, that implies 16.5% share price growth. 
• Bullish charting signals have been identified in Galan Lithium (ASX:GLN), Genex Power (ASX:GNX) and American Pacific Borates (ASX:ABR), according to Trading Central.