Between the Bells

US stocks extended their rally with both the S&P500 and Nasdaq closing higher for the fifth straight session. The gains were supported by the US 10-year Treasury yield edging higher.

Despite the US pushing higher, if you go by the SPI futures, it’s suggesting that the Aussie share market will open slightly lower.

Stay tuned, later today we will be releasing a full report on The a2 Milk Company (ASX:A2M) and Woolworths (ASX:WOW)’s results.

What to watch today:

• It’s another big day of earnings season for Aussie shares. Investors will be digesting the results from companies including Appen (ASX:APX). Bell Potter expects NPAT to come in at US$11.1m. A few travel companies will report today, including Qantas (ASX:QAN), Flight Centre (ASX:FLT) & Air New Zealand (ASX:AIZ). Bell Potter are expecting Qantas to report a huge loss of $1.226 billion. Consensus is even more bearish, expecting a loss of $1.324 billion. 
• Other companies reporting today: Atlas Arteria (ASX:ALX), Blackmores (ASX:BKL), Costa Group Holdings (ASX:CGC), IOOF Holdings (ASX:IFL), Jumbo Interactive (ASX:JIN), Ramsay Health Care (ASX:RHC), St Barbara (ASX:SBM) and Whitehaven Coal (ASX:WHC).  
• One of the most traded stocks yesterday by Bell Direct clients was Flight Centre (ASX:FLT). Its share price lifted 7.4% yesterday, as investors eyed easing restrictions as vaccination numbers surge. 
• The oil price rose on US fuel demand. US government data showed that fuel demand climbed to its highest level since the start of the COVID-19 pandemic. 
• The gold price fell, further below the US$1,800 level as the dollar pushed higher and investors focused on the Fed’s verdict coming up this week. 

Trading ideas:

• Bell Potter has maintained its BUY recommendation on software and services business Infomedia (ASX:IFM) and has increased its price target by 14% to $2 (previously $1.75). This is off the back of Infomedia releasing its financial year 2021 results ahead of Bell Potter’s forecast and the guidance. IFM lifted 4.9% yesterday to $1.71, which implies about 17% share price growth. 
• Bullish charting signals have been identified in The a2 Milk Company (ASX:A2M), Fletcher Building (ASX:FBU) and Element 25 (ASX:E25) according to Trading Central.

US stocks gained for the fourth straight day. 

The Aussie share market will likely follow US stocks higher. The futures suggest a lift of 0.24%, with all eyes on travel, tourism and oil stocks. 

Stay tuned, later today we will be releasing a full report on Zip (ASX:Z1P)’s results.

What to watch today: 

• The iron ore and copper prices both rose 0.4%. The modest gains supported BHP listed in New York, which rose over 1%, while RIO rose almost 3%. Expect Aussie listed BHP, RIO and other iron ore and copper stocks to rise today. 
• The gold price holds above US$1800. 
• Company earnings results today: 
  • Afterpay (ASX:APT)’s key performance metric, its transaction margin, came in at 2.1%. This shows APT saw a drop in the money it makes from transactions (compared to last year’s net transaction margin of 2.3%). APT’s loss after tax deeply worsened, falling 597% to a loss after tax of $159.4 million, while the market expected a loss of just $17 million. 
  • Zip (ASX:Z1P) is set to report later today.  
  • Medibank (ASX:MPL)’s annual profit grew 40% to $441.2 million, amid policyholder growth and less payouts. Profit beat the $424.7 million expected. 
  • Adbri (ASX:ABC) 1H net profit grew 95% on the year to $56.6m. However, profit fell slightly short of market expectations of $60 million. 
• Clarity Pharmaceuticals (ASX:CU6) is set to list and start trading today, with a market value of nearly $360 million. CU6 is a radiopharmaceutical company with five clinical trials currently underway, to treat various conditions and cancers. 
• Kuniko (ASX:KNI) is also a new listing, whose parent organisation is Vulcan Energy (ASX:VUL). 
• Most traded stocks by Bell Direct clients yesterday include Qantas (ASX:QAN) and Monadelphous (ASX:MND). 

Trading Ideas: 

• Austal (ASX:ASB) was reiterated as a Citi BUY, however the investment bank dropped ASB’s 12 month price target to $3.10 (previously $3.35). ASB has new US opportunities continuing to emerge. Citi recognises ASB trades at a 73% discount to its global ship building peers. 
• Alcidion (ASX:ALC) was reiterated as a Bell Potter BUY, with a $0.45 price target, implying 23% share price growth in a year. 
• Scentre Group (ASX:SCG), Firefinch (ASX:FFX) and CogState (ASX:CGS) are all giving off bullish charting signals, according to Trading Central. 

US stocks rallied for the third straight day as equities climbed back to record highs. Investors bought into oil, tourism and vaccine stocks. 

Following the US, the Aussie share market is set to open higher. 

What to watch today: 

• ASX listed vaccine developers are likely to rally, such as CSL (ASX:CSL) and Telix Pharmaceuticals (ASX:TLX). This follows the US overnight, where Pfizer shares rose over 2%, BioNTech shares rose about 10%, Moderna rose 9%, and Trillium Therapeutics soared 188% off the back of news of a Pfizer takeover. 
• Expect oil stocks to charge. After the oil price jumped 6%, it partially recovered from its 9% pull back. This is its biggest weekly decline in 9 months. 
• The copper price jumped 1.9%. This supports stocks such as BHP (ASX:BHP) and Oz Minerals (ASX:OZL). 
• Company earnings results today: 
  • Seek (ASX:SEK) reported a net profit of $752 million in the 2021 financial year, rebounding from 2020’s loss of $113 million. As for the current financial year, SEK guided that profit will be lower, between $190 million and $200 million, amid unprecedented COVID-19 conditions. 
  • Boral (ASX:BLD) recovered from a $1.1 billion loss in 2020, swinging profit in FY21 to $639.9 million. This is an 156% improvement, beating market expectations of $260 million. The company will not be paying a final dividend, to preserve capital and remain cautious of COVID-19 conditions. 
  • Johns Lyng Group (ASX:JLG) reported net profit grew 17% in the full year to $18.6 million, missing expectations of $21.2 million profit. 
  • Western Areas (ASX:WSA) reported net loss after tax of $7.7 million, in line with expectations. 
  • AMA (ASX:AMA) reported a net loss of $97 million, after the market expected a profit. AMA declared it is unable to pay a final dividend. 
  • McMillan Shakespeare (ASX:MMS) reported net profit of $61 million. 

Trading Ideas: 

• Best & Less (ASX:BST) was initiated as a Bell Potter BUY rating, with a price target of $3.30, implying 30% share price growth in a year. 
• Openpay Group (ASX:OPY), Genetic Signatures (ASX:GSS) and Arometrex (ASX:AMX) are all giving off bullish charting signals, according to Trading Central. 

The Aussie share market will likely follow US stocks trading higher on Friday, with the futures suggesting a lift of 0.5%. 

What to watch today: 

• Company earnings and announcements today: 
  • Sonic Healthcare (ASX:SHL) reported its full year net profit grew 149% to $1.32 billion. This beat market expectations of $1.28 billion profit. SHL lifted its final dividend 8% to 55cps. 
  • Charter Hall (ASX:CHC) reported its full year profit rose 38% to $477 million. 
  • G8 Education (ASX:GEM) reported its first half net profit more than doubled to $25.1 million and revenue lifted 39%. G8 Education declared it won’t be paying a dividend. 
  • Sims Metals Management (ASX:SGM) will launch a $150 million share buy-back. 
  • IGO (ASX:IGO) announced its produced its first lithium hydroxide product through its 49% joint venture in Australia’s first lithium hydroxide project. 
  • Ampol (ASX:ALD) lobbed a takeover offer on Z Energy, a New Zealand petrol station operator, for NZ$3.78 per share. 
• The oil price settled 2.2% lower, falling for the 7th session and losing about 10% in the week, as demand concerns linger given global COVID-19 cases trend higher. 
• The copper price, the proxy for economic growth, is now 11% lower from its July high. However, as indicated by MACD and RSI, copper has been oversold. 
• The iron ore price is slightly higher, up 0.1% to US$160. 
• In economic news, services and manufacturing data for August will be released today. And on Friday, the Fed Chairman will give a speech. 

Trading Ideas: 

• While hard commodities continue to fall, soft commodities, such as poultry, are trading at record high territory. Therefore, Bell Potter has upgraded its BUY rating on Inghams (ASX:ING), with an increased price target from $4.25 to $4.55, implying 11% share price growth in a year. ING reported profit ahead of expectations. 
• Maggie Beer Holdings (ASX:MBH), Kangaroo Island Plantation Timbers (ASX:KPT) and Peel Mining (ASX:PEX) are all giving off bullish charting signals, according to Trading Central. 

Geopolitical tensions, local lockdowns, and global COVID-19 resurgences saw the volatility index hit its highest level in five months. As a result, the Aussie share market entered a short-term technical downtrend, however the long-term market uptrend remains intact. 

In this week’s wrap, Jessica covers: 

• (0:07) Why Australia is set to see its worst economic growth rate in 19yrs
• (1:37) How, despite a short-term technical downtrend, long-term growth remains intact
• (3:17) Banks, Energy, and Materials all taking a dip
• (3:40) NRW Holdings (ASX:NWH) rising 16% after reporting better than expected results
• (4:57) The reporting season big picture - 80% of companies have beat/met expectations

European markets closed lower, and US equities made slight gains, after the latest Federal Reserve minutes included discussion to remove some monetary stimulus this year. 

This morning the ASX200 is set to open higher, with the futures suggesting a rise of 34 points or 0.46% to 7,409 points. 

What to watch today:

• In economic news, yesterday the unemployment rate for July fell to 4.6%, after the market expected unemployment to rise from 4.9% to 5%. This is the lowest unemployment rate since 2008. Also, at 9:05am AEST, the RBA assistant governor Christopher Kent will give a speech to Foreign Exchange markets. 
• Cochlear (ASX:COH) is set to release its full year results today. Bell Potter and Citi expect NPAT of $250m. 
• The companies set to report earnings today include: Adairs (ASX:ADH), Cleanaway Waste Management (ASX:CWY), Inghams (ASX:ING), Steadfast (ASX:SDF), TPG Telcom (ASX:TPG), and Sydney Airport (ASX:SYD). 
• The most traded stocks by Bell Direct and advised clients yesterday were BHP (ASX:BHP), Fortescue Metals (ASX:FMG) and Mineral Resources (ASX:MIN).
• The oil price has dropped more than 4.5%, trading at US$62.50 a barrel. 
• The gold price is trading 0.4% lower and copper fell 1.8%. And iron ore is trading 0.5% higher at US$160 a tonne. 

Trading ideas:

• Bell Potter maintain their BUY recommendation on Australia and New Zealand Bank (ASX:ANZ), with an increased price target from $30 to $31, after a positive third quarter trading update. ANZ closed 0.4% lower yesterday, implying 8.9% share price growth in a year. However, Citi retain a SELL on ANZ. 
• Bullish charting signals have been identified in Uniti Group (ASX:UWL), Volpara Health Technologies (ASX:VHT) and Magnis Energy Technologies (ASX:MNS), according to Trading Central. 

Well, US equities once again headed south overnight, with all three major benchmarks closing in the red as investors digested the latest Federal Reserve meeting minutes.

The Aussie share market today will likely follow the US, with the futures down 0.66% or 50 points to 7,378.

What to watch today:

• It’s also another huge day of earnings season. Investors will be digesting the results from a number of companies. These include the Australian Securities Exchange (ASX:ASX) with consensus expecting NPAT to come in at $474.7m. Evolution Mining (ASX:EVN) is also set to report with consensus expecting NPAT to comes in at $375.6m, however Bell Potter are more bearish and are expecting NPAT of $389m. 
• Also keep an eye out for results from Iress (ASX:IRE), Orora (ASX:ORA), Origin Energy (ASX:ORG), Perpetual (ASX:PPT), Redbubble (ASX:RBL), South32 (ASX:S32), Star Entertainment Group (ASX:SGR), Newcrest Mining (ASX:NCM) and Treasury Wine Estates (ASX:TWE). 
• The most traded stocks yesterday by Bell Direct clients included BHP (ASX:BHP) who after revealing its energy deal with Woodside Petroleum (ASX:WPL) and its decision to end its dual-listed company structure, saw its shares plummet 7%, its worst one-day loss since May last year. WPL was also a most traded stock and saw its shares fall 2.1% yesterday. 
• In terms of economic news, the unemployment rate will be released today at 11:30am AEST. Due to the multiple COVID-19 restrictions across the country, it’s expected that July’s reading will come in at 5%, and further increase to 5.5% over the next few months. 
• Following a surge in COVID-19 cases worldwide and a strengthening US dollar, investors are cautious of the outlook for fuel demand. This saw the oil price fall about 1.7% on Wednesday, to settle at US$65.46 per barrel. 
• The gold price continues to hold steady at US$1,789, while the iron ore price tumbled toward US$150 a tonne.  

Trading ideas:

• Bell Potter has maintained its BUY recommendation on Domino’s Pizza (ASX:DMP) and increased its price target by 17% to $155 (previously $132). This is off the back of Domino’s strong all-round FY21 result they released yesterday. 
• Bullish charting signals have been identified in Calix (ASX:CXL), Fertoz (ASX:FTZ) and Fisher & Paykel Healthcare (ASX:FPH) according to Trading Central.

US stocks headed south overnight, after disappointing retail sales data. US retail sales fell 1.1% in July, when market expectations were a fall of just 0.3%. 

In addition, the Taliban has taken control of Afghanistan’s capital city, and China’s COVID-19 cases surged to an 8 month high. 

Following the US, the Aussie share market is set to open lower. 

Stay tuned, later today we will be releasing a full report on Coles (ASX:COL) and CSL (ASX:CSL)’s results.

What to watch today: 

• BHP have announced its petroleum business will merge with Woodside Petroleum (ASX:WPL), in the aim of reducing petroleum assets. WPL investors will hold the majority stake of the merged company. BHP also announced a $7.8 billion potash project, as well as the end of its dual-listed company structure. 
• BHP also reported its FY21 results, delivering record dividends to shareholders, with a US$2.00 final dividend. Profit grew 88% to US$17 billion, while earnings grew 69% to US$37.4 billion. 
• Dominos (ASX:DMP) reported underlying annual NPAT grew 29% to $188.2 million, slightly above market expectations of $187.7 million. 
• Coles (ASX:COL) reported annual profits grew 3%, and CSL (ASX:CSL) reported its annual profit rose 13%. Stay tuned to Bell Direct Reporting Season Coverage, with everything you need to know
• The oil price has fallen for the 4th session, which is the longest loosing streak since March. Oil is trading at US$66.63 a barrel, as global COVID-19 cases are trending higher. 
• The gold price is steady, trading at US$1,787, while the iron ore price rose 0.2%. 
• Cotton hit a 7 year high overnight, while the price of sugar rose to another 4 year high. 

Trading Ideas: 

• Mesoblast (ASX:MSB) was reiterated as a Bell Potter Speculative BUY, with a price target of $3.60, implying 89% share price growth in a year. 
• Limeade (ASX:LME), Red 5 (ASX:RED) and Ava Risk Group (ASX:AVA) are all giving off bullish charting signals, according to Trading Central. 

This morning, the Aussie share market is set to open higher. 

What to watch today: 

• The financial sector, led by Commonwealth Bank (ASX:CBA) and other major banks, has started to trend lower, putting weight on the market. Technical traders are taking profits from the big banks. CBA shares have fallen for the third day. Amid lockdowns, expect further selling in banks. 
• Galaxy Resources (ASX:GXY) has received court approval for its merger with Orocobre (ASX:ORE), making the company Australia’s biggest lithium miner and the 5th biggest in the world. 
• Breville (ASX:BRG) reported its best year of sales, with $1.2 billion in sales for the 2021 financial year. BRG reported a 25% increase in profits to $91 million, meeting expectations. 
• SCA Property Group (ASX:SCP) reported its NPAT rose 441% to $462.9 million. This was driven by an increase in the fair value of its investment properties. Reports beat profit expectations of $151.3 million. 
• Sims Metals Management (ASX:SGM) reported its profit after tax surged 186.5% to $229.4 million. Profit expectations were $235 million. 
• BHP (ASX:BHP) will report today after market close. 
• The oil price is trading 0.3% higher at US$67.40 a barrel. 
• The gold price has gained for the fourth session and is trading at US$1,789, while the iron ore price fell 0.6% to US$166.96. 
• The RBA meeting minutes will be released today. 

Trading Ideas: 

• Australia’s largest insurance broker Steadfast Group (ASX:SDF) was reiterated as a Citi BUY. The investment house increased SDF’s price target from $4.60 to $5.30. 
• PPK Group (ASX:PPK), PKS Holdings (ASX:PKS) and Liberty Financial Group (ASX:LFG) are all giving off bullish charting signals, according to Trading Central. 

The Aussie share market is set to open lower, with the futures suggesting a fall of 0.1% or 9 points. 

What to watch today: 

• So far this reporting season, 80% of companies that have released their results, have met or exceeded guidance. 
  • JB Hi-Fi (ASX:JBH) reporting NPAT growth of 67.4% to $506.1 million in the 2021 financial year, in line with expectations. 
  • GPT Group (ASX:GPT) reported net profit soared 246% to $760.5 million, beating expectations of $291.7 million profit growth. 
  • Also set to report today: Beach Energy (ASX:BPT) and Lendlease (ASX:LLC). BHP (ASX:BHP) will report tomorrow. 
• The oil price is trading 0.4% lower at US$68.17 a barrel. 
• The gold price is up 0.1% to US$1,780, and the iron ore price is slightly higher up 0.1% to US$167.95
• Economic news this week: Tomorrow, BRA meeting minutes will be released. Employment data is out on Thursday, with unemployment expected to rise to 5% from 4.9%. 

Trading Ideas: 

• Bell Potter upgraded its price target on Liontown Resources (ASX:LTR), from $0.61 to $1.33. 
• Hazer Group (ASX:HZR), Silver Mines (ASX:SVL), and Duratec (ASX:DUR) are all giving off bullish charting signals, according to Trading Central.