Between the Bells

 The Aussie share market rose above 7,600 points this week, breaking a historical record. Themes remained consistent, with Lithium and Financial stocks continuing to make headway.

In this week’s wrap, Jessica covers: 

• (0:46) Financials rising 3% after CommBank (ASX:CBA) reported better than expected profits
• (1:35) Lithium and Agricultural stocks delivering the goods
• (3:20) Three key reasons why the Lithium train isn't slowing down...
• (5:04) The good, the bad, and the ugly: reporting season results so far
• (6:53) The expected rise in the unemployment rate

Australian shares were trading higher yesterday, supported by strong earnings reports. 

US equities edged higher overnight, with both the blue-chip Dow Jones and the S&P500 closing at record highs. 

This morning the ASX200 is set to rise 0.4% or 28 points, to 7,526 points. 

What to watch today:

• Yesterday, consumer inflation expectations decreased to 3.3% in August, which was below expectations of 3.8%. Today, New Home Sales data for July will be released at 2pm AEST, expected to increase 13%. 
• Baby Bunting (ASX:BBN) released their full year 2021 results this morning. Total sales increased 15.6% to $468.4 million. Statutory NPAT increased 76% to $17.5 million. The company also announced a fully franked final dividend of 8.3 cents per share, that’s a full year dividend of 14.1 cents, up 34.1%. 
• Commonwealth Bank (ASX:CBA) was one of the most traded stocks by Bell Direct clients yesterday. CBA fell yesterday after a week on an uptrend, and after hitting a record high on Monday. CBA is a Bell Potter BUY stock, while other brokers are bearish. CBA is a Macquarie and Morgan Stanley SELL stock. And Citi released a report yesterday, downgrading CBA to SELL.
• Rio Tinto (ASX:RIO) was also one of the most traded stocks yesterday, after trading ex-dividend yesterday morning. RIO are paying shareholders fully franked dividends of 760.06 cents per share. RIO closed more than 1% lower yesterday. And overnight, the UK listed Rio Tinto dragged down mining stocks in Europe, falling 5.5%, while RIO’s US listed shares fell 1.7% in New York. 
• The oil price fell 0.5% to US$68 a barrel following concerns of rising COVID-19 cases in China. 
• The gold price has edged 0.1% higher and the iron ore price is trading 0.7% lower at US$167 a tonne.

Trading ideas:

• Bell Potter have a BUY recommendation on Lycopodium (ASX:LYL), a provider of full lifecycle services to the Mineral Processing industry. Bell Potter have reduced their price target on LYL from $6.50 to $6.00, as ongoing COVID-19 restrictions increase operational difficulty. 
• Bullish charting signals have been identified in Challenger Exploration (ASX:CEL), Deterra Royalties (ASX:DRR), and Corporate Travel Management (ASX:CTD), according to Trading Central. 

The Aussie share market looks set to open in the green, up 0.13% or 10 points to 7,503, if you go by the futures.  

What to watch today:

• This morning, company’s reporting earnings: 
  • Telstra (ASX:TLS) announced an on-market share buy-back, that will return about 50%, or up to $1.35 billion to shareholders during financial year 2022.  
  • AMP (ASX:AMP) reported an improved first half 2021 performance with underlying NPAT of $181 million, up 57%. 
  • QBE Insurance Group (ASX:QBE) announced a first half 2021 statutory NPAT of $441 million, compared with a net loss after tax of $712m in the prior period. QBE also reported gross written premium (GWP) growth of 20%.
  • AGL Energy (ASX:AGL) reported a 10% statutory loss after tax and an interim ordinary dividend of $0.31cps and special dividend of 10 cents declared.
• Goodman Group (ASX:GMG) and Mirvac Group (ASX:MGR) are also set to report today. 
• The most traded stocks by Bell Direct clients yesterday were Galaxy Resources (ASX:GXY) & Pilbara Minerals (ASX:PLS). Both stocks hit record highs yesterday, lifting over 5% as the demand for battery materials remains strong. GXY shares are up 153% YTD, while PLS shares are up a huge 182%. 
• In economic news, consumer confidence data was released yesterday, with sentiment falling to its lowest reading in 11 months. Confidence has been hit hard amid extended lockdowns across the country. However, sentiment remains in positive territory overall. August’s reading came in at 104.1, a decline of 4.4% when compared with July’s reading. 
• The oil price reversed it losses to trade in the green on Wednesday, at US$69.34, up 1.5% . 
• The gold price also lifted about 1.4% as US inflation readings eased fears that the Federal Reserve would taper its economic support sooner than expected. 
• The iron ore price traded slightly up, at about US$169. 

Trading ideas:

• Bell Potter has upgraded its recommendation on Australia’s largest company, Commonwealth Bank (ASX:CBA) from a HOLD to a BUY, with an increased price target of $118 (previously $105). Bell Potter highlighted CBA’s report card yesterday was a solid result for the business despite the expected pandemic impacts and ongoing lingering uncertainty in operating conditions. CBA lifted 1.5% higher yesterday to $108.17, which implies about 9.1% share price growth. 
• Bullish charting signals have been identified in Senex Energy (ASX:SXY), Imdex (ASX:IMD) and Opthea (ASX:OPT) according to Trading Central.

US stocks reached record highs after the US Senate passed a $1 trillion infrastructure bill. Funds will go towards building transportation, an electric vehicle grid, charging stations, and cybersecurity. 

Overnight, investors bought stocks in energy, mining and industrials as the oil price rose back to US$68. Tech stocks succumb to profit taking, including Moderna, which fell 5%, after jumping 17% the session prior. 

This morning the futures are suggesting the Aussie share market will rally up 0.3%. 

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

What to watch today: 

• CommBank (ASX:CBA) will boost sentiment today, after releasing their earnings results this morning. Headline profit surged 19% to $8.8 billion, beating the $8.6 billion expected, supported by a surging business and household lending. CBA increased its full year dividend by 17% to $3.50 and announced a $6.2 billion share buyback to return money to shareholders. This is over $1 billion more than expected. 
• More company reports today: IAG (ASX:IAG) reported a profit loss of $427 million. Computershare (ASX:CPU) reported profit of US$188 million, missing market expectations of US$284.9 million. 
• The oil price is up 0.3% to US$68.42 a barrel. 
• The gold price fell 0.1% to US$1,729, to another 4 month low, while the iron ore price fell 2.8%. 
• Consumer confidence data will be released today. 

Trading Ideas: 

• Telix Pharmaceuticals (ASX:TLX) was initiated as a Bell Potter Speculative BUY, with an $8.00 price target, implying over 44% share price growth in a year. 
• oOh!media (ASX:OML), Bentley Capital (ASX:BEL) and Australian Vintage (ASX:AVG) are all giving off bullish charting signals, according to Trading Central. 

US investors brace for a big jump in US inflation data on Wednesday night. 

Overnight, the energy sector fell 1.5% on concerns of rising COVID-19 cases. Investors sold stocks tied to the economic recovery, with American Airlines and United Airlines both falling 2%. 

This morning, the futures are suggesting the Aussie share market will rally 0.3%. 

What to watch today: 

• Australia will soon receive the Moderna vaccine, which was approved for use by the TGA. 
• Challenger (ASX:CGF) announced a huge recovery in the 2021 financial year. The company swung from a loss in 2020, to $592 million statutory NPAT, compared to the expected $284 million. CGF’s profit strengthened as its asset under management (AUM) grew and saw record sales growth. CGF declared a full year dividend of $0.20ps, which is a 14% jump on last year. CGF guided for a stronger FY22, with expected profit to grow 15%. 
• Coronado Glaobal Resources (ASX:CRN) will report its HY21 results today at 10am AEST. 
• The oil price fell $0.40 or 0.6%, compared to this time yesterday. Oil is now trading at US$66.84 a barrel, the same price it traded at in May. 
• Gold holds a four month low, however it rose slightly by 0.3%, after tumbling on stronger than expected job data. 
• The seaborne iron ore price gained 0.9%, supporting Rio Tinto listed in New York, which rose 0.7%, while BHP fell 0.2% in New York, after the copper price fell over 1%. Expect the locally listed counterparts to see volatility. 
• Business confidence data will be released today. 

Trading Ideas: 

• The a2 Milk Company (ASX:A2M) was reiterated as a Bell Potter BUY, with a price target of $8.50, implying over 45% share price growth in a year. 
• Karoon Energy (ASX:KAR), Elixr Energy (ASX:EXR) and Senex Energy (ASX:SXY) are all giving off bullish charting signals, according to Trading Central. 

Today, the Aussie share market is set to rally up 0.4% as stocks in the US mostly closed higher on at the weekend following a stronger than expected US jobs report.

All eyes this week will also be on companies reporting.

What to watch today: 

• The NSW Premier set a target for 70% of the population to be vaccinated before restrictions are eased. NSW construction works in non-hotspot LGAs are now allowed back at work, if they have received their first vaccine dose. 
• Suncorp (ASX:SUN) reported NPAT jumped 13% to $1.3 billion, beating the $976.3 million profit expected. SUN also declared a 40cps dividend, a special 8cps dividend, and a $250 million share buyback. Suncorp also reported that the biggest growth in the financial year came from a 42% jump in insurance profit and a 69% jump in banking profit thanks to surges in lending and savings. 
• Reporting this week: Commonwealth Bank (ASX:CBA) report on Wednesday, with headline profit expected to be $8.6 billion with a $5 billion share buyback for shareholders. Also, Telstra (ASX:TLS) reports on Thursday, with expected profit of $1.5 billion and $1.4 billion share buyback for shareholders. 
• The oil price fell 1.2% to US$67.24 a barrel, on fears that demand will slow as US COVID-19 cases are at a 6 month high. 
• Gold slid 2% on stronger than expected US job numbers. And iron ore steadied, gaining 0.1%. In New York on Friday, RIO finished 0.2% up, while BHP fell 0.4%. 
• Business and consumer confidence data will be released on Tuesday and Wednesday. 

Trading Ideas: 

• Comet Ridge (ASX:COI) was reiterated as a Bell Potter Speculative BUY, with an increased price target of $0.18. 
• FYI Resources (ASX:FYI), Sheffield Resources (ASX:SFX) and Corporate Travel Management (ASX:CTD) are all giving off bullish charting signals according to Trading Central. 

Despite rising COVID-19 cases and a falling iron ore price, the Aussie share market rose 1.6% (Mon-Thu), its best gain in 11 weeks. The electric vehicle (EV) mega trend continued to make headlines... Could EV stocks continue to gain momentum and overtake sentiment more recently reserved for the buy now pay later (BNPL) industry?
 
 In this week’s wrap, Jessica covers:  

• (0:37) The Tech sector's huge 11% boost this week
• (1:29) The iron ore price falling into bear market territory
• (2:22) Afterpay (ASX:APT) rising 29% on plans it will be taken over by US giant, Square
• (3:58) Why the lithium sector is worth taking a closer look at
• (4:54) Why upside is ahead for the Aussie share market
• (6:07) Next week's focus on share buy backs and dividends
• (7:29) Three key economic news items to watch next week 

All three major US benchmarks pushed higher overnight. Energy and travel stocks bounced back ahead of Friday’s key jobs report, a key data point for the Federal Reserve as it considers when to tighten monetary policy.

Following the US, the Aussie share market is set to open ever so slightly higher, up 0.04% or 3 points to 7,423. 

What to watch today:

• Today, we have RBA Governor Phillip Lowe testifying at 9:30am AEST, followed two hours later by the RBA’s statement on monetary policy.
• ResMed (ASX:RMD) announced its fourth quarter fiscal year 2021 results. RMD’s revenue increased by 6% to US$3.2 billion on a constant currency basis in comparison to the prior year period, and operating profit was up 12% on a non-GAAP basis. RMD closed yesterday at $37.18, trading at record high territory.
• REA Group (ASX:REA) are set to report its financial year 2021 results. According to Goldman Sachs analysts, a 12% increase in REA’s revenue is expected as well as a 20% lift in EBITDA. 
• James Hardie (ASX:JHX) will be holding its AGM today. 
• The most traded stocks by Bell Direct clients yesterday: Fortescue Metals (ASX:FMG) after its share price came under pressure yesterday following the news that one of its contractors had returned a weak positive test result for COVID-19, which saw FMG’s share price fall 3.4%. However, it was later advised by the Department of Health, that the contactor had subsequently returned a negative test result. Also, Pinnacle (ASX:PNI, its share price lifted about 9% yesterday after reporting its financial year 2021 results, where the company’s net profit increased by more than 100% on the prior year. 
• The oil price lifted about 1.4%, the gold price dropped 0.4% overnight, and the iron ore continues to come under pressure, falling about 5.8% to US$171, now trading around 22% lower than its high last month. 

Trading ideas:

• Bell Potter has maintained its BUY recommendation on construction and engineering business, GenusPlus Group (ASX:GNP), with an increased price target to $1.30 (previously $1.25). Bell Potter believes its acquisition of selected Tandem Corp’s assets and contracts can drive several key strategic benefits including increased maintenance revenue, greater diversification of end markets and the ability to target work on Australia’s 5G rollout. 
• Bullish charting signals have been identified in Sezzle (ASX:SZL), HomeCo Daily Needs REIT (ASX:HDN) and Imdex (ASX:IMD) according to Trading Central.

Yesterday the Aussie share market closed at a record high, just over 7,500 points. 

Overnight, shares were mixed, with broad selling over on Wall Street. 

Following US equities, this morning the Aussie share market is set to open lower, with the futures suggesting a 0.2% fall. 

What to watch today:

• Buy now, pay later company, Splitit (ASX:SPT) seems to be benefiting from Afterpay’s takeover announcement. Yesterday SPT closed 23% higher, while the leading BNPL stocks such as Z1P and APT closed with small gains. 
• Companies set to report their earnings: Centuria Industrial REIT (ASX:CIP) are set to report their half year results and News Corp (ASX:NWS) with report their 2021 fourth quarter and full year earnings. 
• In economic news, Balance of Trade data for June will be released today at 11:30am AEST. 
• The most traded stocks by Bell Direct clients yesterday. They were Bank of Queensland (ASX:BOQ), Fortescue Metals (ASX:FMG) and Silver Lake Resources (ASX:SLR). 
• The oil price has sunk 3.6% to US$68 a barrel, after US stockpiles increased. 
• The gold price is up 0.8%, and iron ore is also trading 0.8% higher at US$182.50 per tonne. 

Trading ideas:

• Bell Potter have a Speculative BUY recommendation on Comet Bridge (ASX:COI), with an increased price target to $0.18 (previously $0.13). Yesterday COI rallied 22% in afternoon trade, before closing higher 7.7%. COI’s capital growth is 98% in the year. However, Bell Potter believe are speculative on the stock, as the company only has prospective operations and cash flows, therefore recognising the volatility of returns. 
• Bullish charting signals have been identified in Core Lithium (ASX:CXO), Splitit Payment (ASX:SPT) and South32 (ASX:S32), according to Trading Central. 

The Aussie share market is likely to head back into record high territory today. The futures are suggesting a rise of 0.1%. 

What to watch today: 

• The iron ore price has stabilised. Spot iron ore prices rose 0.3%, and seaborne iron ore prices held steady after a 14% fall in the previous selling. This supported investors buying into BHP In New York overnight, helping BHP shares rise 1.7%. Therefore, (ASX:BHP) and other iron ore stocks on the ASX are likely to follow. 
• The oil price fell slightly 0.3% to US$70.35. 
• Consumer Confidence data to be released for August. Keep an eye on the reaction in consumer spending stocks. 
• BWP Trust (ASX:BWP) released their earnings. Headline profit fell about 3% to $114 million, slightly under what the market expected of $114.7 million in profit. 
• GUD Holdings (ASX:GUD) are set to report. 

Trading Ideas:

• Laybuy Group (ASX:LBY) was reiterated as a Bell Potter Speculative BUY, with a much slimmer price target of $1.20. This implies over 100% share price growth in a year. 
• Chalice Mining (ASX:CHN), Nearmap (ASX:NEA), and Warrego Energy (ASX:WGO) are all giving off bullish charting signals, according to Trading Central.