Between the Bells

The Australian share market is set to have a sluggish lift of 0.1%. Just 1 day out from the U.S. election, investors bought the dip, pushing up key U.S. indices such as the S&P500, Dow Jones, and Nasdaq rising 1.2%, 1.6%, and 0.4% respectively.

In commodities, Oil gained 3.7% rising to US$37.12, while gold commenced US$1,896.

What to watch today:
 -         The RBA meets, with rates expected to be cut to 0.1%
 -         Additionally, the RBA is set to announce more bond buying, with at least $5 billion a month in order to get more money in the economy.

Local trading ideas:
 -         UBS increased CSR’s (ASX:CSR) buy rating and price target to $5.19
 -         ResMed (ASX:RMD) was yesterday upgraded by Credit Suisse, Macquarie, UBS, and Wilsons. Credit Suisse is the most bullish with a target of $31
 -         UBS reiterated Westpac (ASX:WBC) as a buy with a $20.50 price target, after the bank announced what some would call a multi-year turnaround report card.
 -         Lastly, Trading Central’s technical analysis suggests that Amaysim (AYS), Ansell (ANN) and Bellevue Gold (BGL) are all showing bullish signals

The Australian share market is eyeing a lift of 0.9% at the open. With one day left until the U.S. election, amid the uncertainty investors exercised caution, with the Dow Jones, S&P500 and Nasdaq losing 0.6%, 1.2% and 2.5% respectively.

Oil holds at a five-month low at US$35.79 on demand concerns with U.S. COVID-19 cases hitting an all time high, while Germany and France entered new lockdowns last week.

What to watch today:

• AMP (ASX:AMP) confirmed its take-over offer from Ares Management Corporation is for $1.85 per share. On Friday AMP closed at $1.53, so expect a rally today.
• Westpac (ASX:WBC) reported it full year results, reporting a cash earnings of $2.61b which was less than UBS’s forecast of $2.62b.
• Results are out today for CSR (ASX:CSR). 

Local trading ideas:

• Bell Potter reiterated Medical Developments (ASX:MVP) as a Buy, but trimmed its price target to $7.50, implying 38% upside in the year. MVP has a new strategy for the green whistle in Europe and hired CSL’s former head of Seqirus as its CEO.
• Citi reiterated Incitec Pivot (ASX:IPL) as a Buy with a $2.40 price target, expecting fertilisers to drive earnings growth in FY21.
• Bell Potter reiterated Immutep (ASX:IMM) as a Speculative Buy with a 60 cent target, implying 131% upside in the year.
• Rio Tinto (ASX:RIO), Mortgage Choice (ASX:MOC) and PKS Holdings (ASX:PKS) are all showing bullish charting signals according to Trading Central.

The Aussie share market copped a 3.4% pullback (Mon-Thu) - its biggest weekly fall in six months. With the U.S. election around the corner, and new European COVID-19 lock downs in force, Australian investors have been flicking the risk-off button amid the uncertainty.

In this week’s wrap, Jessica covers:

• (0:22) Investors abandoning cyclicals for defensive sectors
• (1:10) Coca-Cola Amatil (ASX:CCL) fizzing up 16%
• (1:53) Light at the end of the tunnel: the end of Australia's recession
• (2:18) Whether interest rates will be cut next week
• (3:29) Why the Aussie share market could rally after the U.S. election
• (4:37) Potential merger and acquisition stocks to watch, with BUY ratings: Nufarm (ASX:NUF), Southern Cross Media (ASX:SXL) & Computershare (ASX:CPU)

The Aussie share market is eyeing a gain of 0.6% at the open, a welcome lift from the 3.4% fall Monday to Thursday this week.

U.S. economic growth rebounded in the third quarter up 33.1%, beating expectations and almost in a V shape recovery formation. That rebound in growth erased the 31.4% plunge in GDP in the second quarter.

What to watch today:

• AMP (ASX:AMP) confirmed it has received a takeover offer from Ares Management. The takeover offer amount was not disclosed, but you’d think AMP shares will rally on the hype.
• Northern Star Resources (ASX:NST), ResMed (ASX:RMD) and National Storage REIT (ASX:NSR) report quarterly results today.
• Carsales.Com (ASX:CAR), Austal (ASX:ASB), EML Payments (ASX:EML), GWA Group (ASX:GWA), Integral Diagnostics (ASX:IDX), Recce Pharmaceuticals (ASX:RCE) and Southern Cross Media Group (ASX:SXL) hold their AGMs today.

Local trading ideas:

• Bell Potter reiterated The a2 Milk Company (ASX:A2M) as a sell with a $12.70 target, implying it will fall 11% in a year.
• Citi reiterated ship builder Austal (ASX:ASB) as a buy, but trimmed its target price to $4.30.
• UBS reiterated Newcrest Mining (ASX:NCM) as a buy, but trimmed its price target by 50 cents, to $38.00 with UBS saying although NCM’s costs are higher, its gold mine in WA is still growing nicely.
• Matador Mining (ASX:MZZ), PRO-PAC Ltd (ASX:PPG) and Catapult Group International (ASX:CAT) are all showing bullish charting signals according to Trading Central.

The futures are suggesting that the ASX200 is eyeing a fall of 1.7% or 103 points at the open. There’s five days until the U.S. election, and as its history goes, the risk-off environment continues. The Dow sank over 900 points, or 3.4%, its biggest retreat since June. The tech-heavy Nasdaq fell 3.7%, but it’s still up 21% this year.

Commodities mirrored equities; Oil fell 5% to US$37.34, and Gold lost 1.8% to US$1,877.

What to watch today:

·       Quarterly results are out today for: ANZ (ASX:ANZ), Fortescue Metals Group (ASX:FMG), Newcrest Mining (ASX:NCM), Orocobre (ASX:ORE), Janus Henderson (ASX:JHG) and IOOF Holdings (ASX:IFL).

·       ANZ’s results showed their statutory profit fell 40% to $3.58 profit.

·       AGMs: Australian Ethical (ASX:AEF), Challenger (ASX:CGF), JB Hi-Fi (ASX:JBH), Jumbo Interactive (ASX:JIN), Pinnacle Investment Management (ASX:PNI), Reece (ASX:REH), Reliance Worldwide Corporation (ASX:RWC).

 
 Trading ideas:

·       Bell Potter upgraded Life360’s (ASX:360) Buy rating, increasing its price target to $7.70 implying 92.5% upside in a year.

·       Afterpay (ASX:APT) was also upgraded by Bell Potter, increasing its Buy rating and price target to $137. That implies 33% upside in a year. Morgan Stanley targets $121.

·       UBS upgraded Qantas Airways’ (ASX:QAN) Buy rating, increasing its price target to $5.25 with the focus on Australian travel growth.

·       Champion Iron Ltd (ASX:CIA), Vulcan Energy Resources (ASX:VUL) and ResMed (ASX:RMD) are all showing bullish charting signals according to Trading Central

The local futures are suggesting the market will fall 0.4% at the open, which will mark the fifth straight day of falls. But keep in mind, every year after a U.S. presidential election, over the last 36 years, the Aussie market has rallied and had a positive year. 

Commodity traders breathed a sigh of relief. Oil rallied up 2% to US$38.97 and Gold edged up 0.2% to US$1,908.

What to watch today:

·       Afterpay (ASX:APT) announced underlying sales sky rocketed 115% to $4.1b in the September quarter, up from $1.9b the same time last year. Morgan Stanley recently upgraded APT’s buy rating and price target to $121.  

·       Quarterly results: Coles (ASX:COL) and Galaxy (ASX:GXY).

·       AGMs: Medical Developments International (ASX:MVP), Netwealth Group (ASX:NWL), Steadfast Group (ASX:SDF), Super Retail Group (ASX:SUL), Tassal Group (ASX:TGR), Vocus Group (AS:VOC) & Codan (ASX:CDA).

 
 Trading ideas:

·       Bell Potter upgraded heavy equipment maintenance company, Mader Group’s (ASX:MAD) Buy rating, increasing its price target to $1.25 implying 37.4% upside in a year, on the back of borders opening up in Australia.

·       Bell Potter increased ANZ’s (ASX:ANZ) Buy rating, increasing its target to $21.20 implying 9% upside in a year.

·       Citi reiterated Nick Scali (ASX:NCK) as a Buy, increasing its price target to $10.50, expecting 20% share price return and 6.6% dividend yield.

·       West African Resources (ASX:WAF), Kina Securities (ASX:KSL) and Harvest Technology Group (ASX:HTG) are all showing bullish charting signals - according to Trading Central

The local futures are pricing in that the market could fall 0.9% at the open. Overnight on markets, the undertone was mostly negative, with COVID-19 cases spiking in the U.S., China and Europe. The Dow fell 2.3%, marking its worst fall in 8-weeks. the S&P 500 shed 1.9% and the Nasdaq fell 1.6%.

Commodities were weaker. Oil fell over 3% to US$38.55 with Libyan output rising. Gold steadied at US$1,904, as investors topped up their bond exposure instead.What to watch today:

·       Boral (ASX:BLD) agrees to sell its 50% stake in USG Boral for A$1.43 billion

·       Northern Star (ASX:NST) announced first quarter gold sales are at the top end of guidance.

·       Evolution Mining (ASX:EVN) announced quarter results. Pointsbet Holdings (ASX:PBH) is due to hand down theirs today.

·       AGMs: Bendigo and Adelaide Bank (ASX:BEN), Nick Scali (ASX:NCK), Bega Cheese (ASX:BGA), Boral (ASX:BLD) & Link Market Services (ASX:LNK).

 
 Trading ideas:

·       Bell Potter upgraded Technology One’s (ASX:TNE) Buy rating, increasing its price target to $10, implying 14.4% upside in a year.

·       Bell Potter downgraded Stanmore Coal (ASX:SMR) as a Sell, dropping its price target to $0.50, implying a fall 31% in a year.

·       UBS reiterated Flexigroup (ASX:FXL) as a Buy with a $1.45 price target.

·       UBS reiterated Westpac (ASX:WBC) as a Buy with a $20.50 price target. Bell Potter targets WBC as a hold with a $20 target.

Perenti Global (ASX:PRN), Arena REIT (ASX:ARF), and IDP Education (ASX:IEL) are all showing bullish charting signals - according to Trading Central. 

The Aussie share market is eyeing a gain of 0.3% following Wall Street’s positive close on Friday.

The focus this week will be on economic data, with economic growth data out for the U.S. and Australia for the third quarter.

In Australia, quarterly results this week are out for TPG (ASX:TPG), ANZ (ASX:ANZ), Janus Henderson (ASX:JHG) and ResMed (ASX:RMD).

Local trading ideas:

• Bell Potter upgraded Mineral Resources (ASX:MIN) to a buy, increasing its price target to $28.50, implying 14% growth.
• Bell Potter upgraded Insurance Australia Group (ASX:IAG) to a buy with a $5.60 target, implying 14.3% upside.
• UBS reiterated Worley (ASX:WOR) as a buy with a $12.32 price target.
• NRW Holdings (ASX:NWH), Charter Hall Group (ASX:CHC) and JB Hi-Fi (ASX:JBH) are all showing bullish charting signals according to Trading Central.

In just one week the Aussie share market hit a seven-month high, whilst also hitting an eight-day low. It seems this pendulum of volatility is a reaction to the impending U.S. election in ten days. The technical viewpoint indicates there is upside to come.

In this week’s wrap, Jessica covers:

• (1:05) Investors rotating out of defensive sectors and into cyclicals
• (1:19) Pro Medicus (ASX:PME) jumping 14%, while Megaport (ASX:MP1) sinks 9%
• (2:07) The pre-election cash build up: what you need to know
• (3:02) What the markets tell us about the U.S. election
• (5:05) Three trading ideas in IT, Education & Property

The ASX200 is eyeing a flat open today with all eyes and ears on the U.S. presidential debate kicking off at 11am AEDT.

The first COVID-19 treatment was approved by the U.S. FDA, giving Gilead Sciences’ drug, Remdesivir, formal approval to treat COVID-19.

What to watch today:

• Restaurants, cafes, pubs and clubs will be able to take group bookings of up to 30 people.
• Flash PMI numbers for October are out, they are a preview of what to expect ahead of official numbers.

Trading ideas:

• Citi reiterated Aristocrat Leisure (ASX:ALL) as a buy with a $34.60 price target.
• Bell Potter upgraded Laybuy Group Holdings (ASX:LBY) as a speculative buy, increasing its price target to $3.00. This implies 76% upside on its rapid and record growth.
• Bell Potter upgraded Aeris Resources Ltd (ASX:AIS) as a buy, increasing its target to $0.109, implying 79% upside.
• Navigator Global Investments (ASX:NGI), MyFiziq (ASX:MYQ) and Tesoro Resources (ASX:TSO) are all showing bullish charting signals according to Trading Central.