Between the Bells

Rising bond yields and stagflation fears weighed down on the market yesterday and the ASX200 closed in the red. 

In New York overnight, all three major indices closed lower, amid rising oil prices and economic worries. 

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

What to watch today:

• In economic news, business confidence data for September will be released at 10:30am AEDT. The business confidence index rose to -5 in August from -7 in July. Forecasts expect the index to rise to -2 in September. Confidence has been improving in transport, finance, business and property, while remaining weak in construction, mining and retail. 
• Keep watch of petroleum company Ampol (ASX:ALD). The company will acquire all of Z Energy shares (ASX:ZEL) for NZ$3.78 cash per share. This is a $1.9 billion acquisition that looks to fast track a transition to electric vehicles. ZEL rose 5.9% yesterday, while ALD rose 2.9%. 
• One of the most traded stocks by Bell Direct clients yesterday was Star Entertainment (ASX:SGR). Its share price tumbled 22.9%, amid suspected money laundering, fraud and organised crime at its casinos. Bell Direct and advised clients were also trading BHP (ASX:BHP) and Fortescue Metals (ASX:FMG), after the iron ore price jumped as Chinese markets returned from national holidays. FMG, which is currently a Bell Potter BUY, has also just announced its plans to build a hydrogen-equipment factory in Gladstone in Central Queensland.   
• Reece (ASX:REH) is set to go ex-dividend today. 
• The oil price continues to trade higher, above US$80. Crude oil futures rose to a record high US$82.14 a barrel.
• Spot gold is trading steady, while copper is higher. While the seaborne iron ore price has jumped more than 6%, trading at US$130.24 a tonne. 

Trading ideas:

• Bell Potter maintain their BUY rating on Imdex (ASX:IMD), after a positive first quarter trading update. They have increased their price target from $2.85 to $3.00, with a strong outlook for FY22 revenue growth and margin expansion. 
• Bullish charting signals have been identified in Firefinch (ASX:FFX), De Grey Mining (ASX:DEG) and KGL Resources (ASX:KGL), according to Trading Central. 

The Aussie share market is set to open lower, with the futures suggesting a fall of 0.1%. 

What to watch today: 

• Oil stocks were some of the best performers in the US and the same may occur on the ASX. The oil price rose to US$80 a barrel for the first time since 2014, as oil demand rebounds and supply remains low. The oil price has gained 60% this year and the market expects tight supply to remain for 6 months. 
• The iron ore price rose 5.4% to US$123.30 in China. This helped BHP in New York rise over 1%. Expect iron ore stocks like BHP (ASX:BHP), Fortescue Metals (ASX:FMG), Rio Tinto (ASX:RIO) and Mineral Resources (ASX:MIN) to follow. 
• Travel, tourism and food and beverage stocks are on watch ahead of NSW reopening its economy. Keep your eye on Australia’s biggest pub owner Charter Hall (ASX:CLW), as well as travel stocks that will likely see increased bookings. 
• In economic news, employment data will be released on Thursday for September. 
• Companies going ex-dividend today include Qualitas Real Estate Income Fund (ASX:QRI). RECHARGE FPO (ASX:REC) is due to list today. 

Trading Idea: 

• Bell Potter reiterated its BUY rating on Mineral Resources (ASX:MIN), however slashed its price targe to $54.25 (previously $61.85), accounting for the drop in iron ore prices. 
• Bullish charting signals have been seen in Vimy Resources (ASX:VMY), Westgold Resources (ASX:WGX) and Calix (ASX:CXL) according to Trading Central. 

 It was a bit of a topsy-turvy week for the Aussie share market. However, the market looks set to close higher on a weekly basis for the first time in five-weeks, fuelled by gains in the Energy & Financial sectors.

In this week’s wrap, Jessica covers: 

• (0:52) The best performing stocks this week 
• (1:15) Two key reasons why investors are moving into gold
• (3:13) Why October is traditionally one of the best performing months for stocks
• (4:21) The ten most traded stocks by Bell Direct clients this week
• (4:52) Why next week's employment data will be watched like a hawk

Watch the Weekly Wrap in video here.

Please note: The weekly wrap text was written at the close of trade Thursday 7 October.

Yesterday, the ASX200 gained 0.7% following a better night of trade on Wall Street, with the big banks and Woolworths notching up gains of 1%. Nearly all sectors closed in the green, with tech shares rallying. The only sector to fall was the Energy sector, as the US said it was considering selling oil from its strategic reserves and Russia said it was ready to stabilise the natural gas market.

Looking to the US, lawmakers reached a deal on Thursday to increase the debt ceiling in the short-term. The compromise will avoid an unprecendented debt default for now. This helped equities rally, with the Dow rising 300 points, the S&P500 closing 0.8% higher, and the tech-heavy Nasdaq up 1.1%. 

Following a positive session on Wall Street, the futures are suggesting the Aussie share market will open 0.46% higher this morning, with the market on track to finish higher for the first time in five weeks.

What to watch today:

• Continue to keep watch of travel and tourism, as well as food and beverage stocks as from Monday the 11th of October, fully vaccinated adults in NSW will enjoy more freedoms as several restrictions are eased as part of the reopening roadmap. 
• In economic news, yesterday, the services sector reading for September edged up 0.1 points to 45.7 from 45.6 in August, which points to the second consecutive month of contraction in the services sector. Today, investors will digest the latest building permits data for August, and the RBA will release its semi-annual Financial Stability Review, with talks that lending and housing are likely to feature prominently.  
• Companies that are paying their latest dividends include Healius (ASX:HLS), Reliance Worldwide Corporation (ASX:RWC), WiseTech Global (ASX:WTC) and Woolworths (ASX:WOW).
• The most traded stocks by Bell Direct clients yesterday included Whitehaven Coal (ASX:WTC), its shares fell 7% following the ongoing energy crisis that saw global coal futures tumble yesterday. Another most traded stock was Red 5 (ASX:RED). The gold stock charged about 18% yesterday as the business made further headway at is cornerstone King of the Hills (KOTH) project, where construction is underway on one of Australia’s most well-endowed gold assets.
• The oil price resumed its rally, lifting 1.1% higher to US$78.84 a barrel, now trading back at 7-year high territory. This comes as the market deemed it unlikely that the US would release emergency crude reserves or ban exports to ease tight supplies. 
• The gold price fell following a drop in US weekly initial jobless claims, which boosted treasury yields. Meanwhile, the seaborne iron ore price traded slightly higher, at $118. 

Trading ideas:

• Bell Potter has reiterated its BUY recommendation on software company, Envirosuite (ASX:EVS) with an increased price target of $0.22 (previously $0.20). EVS closed higher yesterday, up about 16% to $0.18, which implies about 19% share price growth.
• Bullish charting signals have been identified in Red 5 (ASX:RED), Lynas Rare Earths (ASX:LYC) and Piedmont Lithium (ASX:PLL) according to Trading Central.

 Yesterday, the ASX200 fell 0.6% after the Reserve Bank of New Zealand increased its interest rates, which affected sentiment on the ASX, making investors questions if the RBA would do the same.         

Today, the Aussie share market is set to open higher, with the futures suggesting a rise of 0.5%. 

What to watch today: 

• The oil price fell 2.5% to US$76.92, falling from a 7-year high. Oil prices have surged over 50% this year, adding to inflationary pressures. Iron ore prices remained relatively flat overnight on limited market activity. And thermal coal prices fell 10% from their record high. 
• Watch travel, tourism and food and beverage stocks ahead of NSW reopening next week. 
• In economic news, there will be a services sector reading today for September. 
• Companies going ex-dividend today include ARB Corp (ASX:ARB) and Macmahon Holdings (ASX:MAH). 

Trading Ideas:

• Citi reiterated its BUY rating for ship builder Austral Limited (ASX:ASB) with a $3.10 price target, implying 61% share price growth in a year. 
• Bullish charting signals have been seen in QBE Insurance (ASX:QBE), hipages Group (ASX:HPG) and Praemium (ASX:PPS) according to Trading Central

The major US indices rebounded in the US overnight, led by investors buying the dip into tech stocks. 

There is near term uncertainty in the market, as the world awaits the fate of China’s biggest property developer Evergrande, currently in a trading halt. Fantasia, another large Chinese developer, also missed a repayment. Therefore, iron ore demand is likely to slow down even further.

The Aussie share market is set to open higher, with the futures suggesting a rise of 0.5%, with a focus on tech and oil stocks. 

What to watch today: 

• The oil price rose to US$78.93, its highest level since 2014. Oil prices have surged over 50% this year, adding to inflationary pressures. 
• Uranium is trading higher as the International Atomic Energy Agency expects world nuclear-generating capacity to double by 2050, as the world aims to move away from fossil fuels to fight climate change. Keep you eye on Paladin (ASX:PDN) and Deep Yellow (ASX:DYL). Also keep in mind four uranium companies with licences to mine in South Australia. These include Alliance Resources (ASX:AGS), Boss Energy (ASX:BOE), BHP (ASX:BHP), as well as Energy Resources (ASX:ERA), one of the longest operating uranium producers, which is majority owned (86%) by Rio Tinto (ASX:RIO). 
• In economic news, yesterday Australia’s balance of trade data hit a record all time high, while iron ore sales to China were lower than expected in August compared to July. In addition, yesterday the RBA reconfirmed it will continue to buy bonds to support the economy until February next year. 

Trading Ideas: 

• Citi reiterated its BUY rating for baby retailer Baby Bunting (ASX:BBN) and has increased its price target to $6.11, implying 13% share price growth in a year. Baby Bunting’s AGM revealed sales momentum has accelerated, following the last trading update. Citi expects further acceleration in sales throughout the rest of this year as lockdowns end. The company is also making faster than expected progress on its private label strategy, resulting in gross margins being better than expected to date.
• Bullish charting signals have been seen in Silver Lake Resources (ASX:SLR), Kalium Lakes (ASX:KLL) and Teaminvest Private Group (ASX:TIP), according to Trading Central. 

US stocks started their trading week in the red, with concerns about rising long- term interest rates. 

The Aussie share market is set to open lower, with the futures suggesting a fall of 0.9%. 

What to watch today: 

• In economic news, business confidence for September will be released, and the RBA will hold its monthly meeting. Interest rates are tipped to remain on hold until next year, however the market will be focusing on the RBA reconfirming that it will continue to buy bonds until February. 
• The oil price rose 2.3% to US$77.62, a 7-year high, despite OPEC saying they will increase oil output in November. 
• The iron ore price is steady at US$117. The focus for iron ore investors will be China’s biggest property developer, Evergrande. 
• Companies going ex-dividend today include Sims (ASX:SGM), Perenti Global (ASX:PRN) and BWX (ASX:BWX). 

Trading Ideas: 

• Bell Potter reiterated Bega Cheese (ASX:BGA) as a BUY stock, with a price target of $6.35, implying 19% share price growth in a year. 
• Bullish charting signals have been identified in The a2 Milk Company (ASX:A2M), Mayne Pharma (ASX:MYX) and Rumble Resource (ASX:RTR), according to Trading Central. 

Friday’s sell off saw Australian shares close 2% lower. It was the 4th straight week of declines. Banking stocks were the worst performers. All four major banks tumbled, with Commonwealth Bank (ASX:CBA) down the most. Mining stocks also fell, while travel stocks were higher after Prime Minister Scott Morrison announced international borders will open in November. 

European stocks closed in the red on Friday after economic data released showed euro zone inflation hit a 13-year high. Inflation rose 3.4% in September, the highest reading since September 2008. The Stoxx 600 closed 0.4% lower. 

There was a broad rebound in New York. All three major benchmarks advanced, following a surge in US consumer spending data for August. The Dow gained 480 points, the S&P 500 rose nearly 1.2% and the Nasdaq gained 0.8%. The 10-year Treasury yield fell on Friday, back below 1.5%. 

Following US equities, the SPI futures are suggesting the ASX200 will open 0.7% higher. 

What to watch today, 

• Take note that October is historically another volatile month. 
• BSA Limited (ASX:BSA) goes ex-dividend today. 
• Some of the most traded stocks on Friday by Bell Direct clients were Fortescue Metals (ASX:FMG) and Mineral Resources (ASX:MIN), as mining stocks all dropped. FMG fell 2.6% on Friday and was one of the ASX200’s worst performers in September, falling over 20% the past month, with the drop in iron ore prices. FMG is a Bell Potter BUY. MIN fell 6.9% on Friday, that is a Citi BUY. 
• In economic news, housing data released on Friday saw property prices are still rising, up 1.5% in September and have jumped 20% over the year. Economic updates in the week ahead will include Balance of Trade data for August and the RBA’s interest rate decision released tomorrow and Building Permits out on Friday. 
• The oil price has lifted 1.1% and is trading above US$75, supported by tight supply and high demand ahead of OPEC’s meeting next week. 
• Gold is trading higher, with a strong dollar, rising bond yields, as well as expectations that the US Fed will pull back on bond-buying in November. 
• The coal price continues to rise, amid the tight supply in China, while the seaborne iron ore price is trading 3.6% lower at US$115 per tonne. 

Trading Ideas:

• Bell Potter have upgraded Uniti Group (ASX:UWL) from a HOLD to a BUY. Their 12-month price target remains unchanged at $4.50, where the total expected return is over 15%. Bell Potter views the recent pull back in UWL’s share price as a buying opportunity and forecast continued strong growth. UWL closed lower on Friday at $3.82, implying 17.8% share price growth in a year. 
• Bullish charting signals have been identified in Imdex (ASX:IMD), Cynata Therapeutics (ASX:CYP) and Elsight (ASX:ELS) according to Trading Central. 

With a somewhat bitter September behind us, we move into October, a month where markets historically rebound 0.9% on average. However, there's still a lot of short-term uncertainty globally, so what's ahead for equities?

In this week’s wrap, Jessica covers: 

• (1:15) Why Tech shares fell to a four-month low
• (1:53) Beach Energy (ASX:BPT) rising 26% as the oil price charges higher
• (3:23) What to consider given investment banks believe markets could fall further
• (4:47) The divided opinion on Fortescue Metals Group (ASX:FMG)
• (6:17) Key economic news out next Tuesday

Watch the Weekly Wrap in video here.

It was a positive day for Aussie shares yesterday with a broad rally in the final session of the quarter. The market rebounded with all 11 sectors closing higher.

European stocks wrapped up September in negative territory, however the STOXX 600 closed slightly higher, up 0.2%. 

US equities dropped overnight, with the S&P500 wrapping up its worst month since March 2020. This was amid rising rates, inflation fears, COVID-19, and concerns of the Chinese property market.

Today, following shares falling in New York, the SPI futures are suggesting the ASX200 will fall 1.6% at the open. 

What to watch today:

• In economic news, the Markit Manufacturing PMI for September will be released at 9am AEST. Forecasts expect it to rise from 52 to 57.3. Home Loan data for August will also be released today at 10:30am AEST. 
• Over 60 stocks and ETFs are set to go ex-dividend today. This often sees shares fall and investors take their profits. 
• The most traded stocks by Bell Direct clients yesterday included CSL (ASX:CSL), after falling almost 6% this week, but closing in the green yesterday. CSL is currently a Morgans BUY. Fortescue Metals (ASX:FMG) was another most traded stock, rising higher amid higher iron ore prices as Chinese steel mills stocked inventories before their national public holiday. However, Chinese iron ore demand remains constrained. And if you hold FMG, keep watch of it today – the company has suspended operations at its iron ore mine in Pilbara in WA, after an employee has tragically died in a ground collapse. FMG is currently a Bell Potter BUY.
• The oil price has risen almost 0.5%, trading just above US$75 a barrel. Gold is trading higher, while lithium has fallen heavily.  
• The coal price has surged to a record high of $212 per metric, amid tight supply in China as they aim for carbon neutrality and the seaborne iron ore price is trading slightly lower at US$119.65. 

Trading ideas:

• Bell Potter maintain their BUY rating on Coronado Global Resources (ASX:CRN), and have increased their price target from $1.20 to $1.40. Strong met coal prices and improving operational performance has flowed through to cash flow. CRN closed yesterday at $1.29, implying 8.5% share price growth in a year. 
• Citi has upgraded JB Hi-Fi (ASX:JBH) to a BUY after positive share price performance. Citi pulled back its price target on JBH to $53 (previously $55), with an expected share price return of 19.9%.  
• Bullish charting signals have been identified in Resolute Mining (ASX:RSG), Orica (ASX:ORI) and Crown Resorts (ASX:CWN), according to Trading Central.