Between the Bells

Wall St closed 400 points lower on Friday as inflation and tariff concerns worried investors towards the back end of the week. The Dow Jones fell 1, the S&P500 dropped 0.95% and the tech heavy Nasdaq lost 1.36%.

Over in Europe, markets followed the US and closed lower as corporate earnings continue to roll out. The STOXX600 fell 0.38% after a key US jobs report disappointed investors. Germany’s DAX lost over half a percent, the French CAC dropped 0.43% and over in the UK, the FTSE100 ended Friday’s trading session 0.31% in the red.

Locally on Friday, the ASX200 closed 0.11% lower with half of the sectors closing in negative territory. Losses were led by the energy and health sectors which lost 1.45% and 1.03% respectively. This was offset by the information technology sector which gained over half a percent.

What to watch today:

• The Australian share market is set to open lower, with the SPI futures suggesting a fall of 0.76% at market open this morning.
• On the commodities front this morning,
   
  • Oil is trading 0.55% higher at 71 US dollars a barrel, gold is trading 0.05% higher at 2859 US dollars an ounce and iron ore is trading 0.13% higher at 106 US dollars and 37 cents a tonne.

Trading Ideas:

• Bell Potter initiates coverage on Aristocrat Leisure (ASX:NGI) with a buy rating and has a 12-month share price target of $83. With a current share price of $73.72, this indicates a share price growth of 12.6% over the next 12-months, hence the buy rating is recommended. 
• And Trading Central has identified a bullish signal on Navigator Global  Investments (ASX:ALL), indicating that the stock price may rise from the close of $1.60 to the range of $1.83-$1.89 on a pattern formed over 74 days according to the standard principles of technical analysis.

Reporting Season has kicked off to a surprisingly strong start with a host of companies reporting their results in this first week of February. ResMed smashed investor expectations and REA Group produced stellar results despite the report being overshadowed by the retirement of the company’s CEO, Owen Wilson after 10 years with the company. Also, join Grady as she covers the ASX market performance this week and provides an outlook on what to expect for the remainder of this Reporting Season.

In this week’s wrap, Grady covers: 

• (0:14): implications of Trump’s tariff halts with Mexico and Canada
• (0:50): surprisingly strong results that have kicked off Reporting Season
• (1:25): ResMed results exceeding expectations
• (2:33): REA Group’s 20% rise in revenue 
• (5:26): how the local market performed this week so far 
• (6:23): the most traded stocks & ETFs by Bell Direct clients 
• (6:51): economic news items to watch out for. 

Wall St closed higher overnight as investors pushed past the trade turmoil earlier on in the week. The Dow Jones gained 0.71%, the S&P 500 rose by 0.39% and the tech-heavy Nasdaq jumped by 0.19%.

Over in Europe, markets closed higher on Wednesday as earnings beats rose stock gains across the major sectors. The STOXX600 rose by 0.47%, with the majority of major sectors closing in the green. Germany’s DAX rallied 0.37%, the French CAC dropped 0.19% and over in the UK the FTSE100 ended the trading day 0.61% higher.

Locally yesterday, the ASX200 rose by 0.51% with most major sectors closing higher. Gains were led by the materials and information technology sectors which closed 1.61% and 1.56% higher. This was offset by the health sector which fell by 0.55%.

What to watch today:

• The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.7% at market open this morning.
• On the commodities front this morning,
  • Oil is trading 2.03% lower at 71 US dollars and 22 cents a barrel as oil inventories increased by 8.664 million barrels last week, the largest build in nearly a year. 
  • Gold is trading 0.83% higher at 2864 US dollars an ounce and iron ore is trading 0.36% higher at 105 US dollars and 40 cents a tonne.

Trading Ideas:

• Bell Potter maintains a speculative buy rating on Comet Ridge Ltd (ASX:COI) and has a current share price of 13 and a half cents. With a 12-month price target of 21 cents, this indicates a share price growth of 56%, hence the buy rating is maintained.
• Trading Central has identified a bullish signal on Jumbo Interactive (ASX:JIN), indicating that the stock price may rise from the close of $13.23 to the range of $15.20-$15.70, on a pattern formed over 114 days, according to the standard principles of technical analysis.

Over in the US on Tuesday, stocks closed higher as investors shift focus from Trump’s trade wars to fourth quarter earnings results. The Nasdaq rose 1.35%, the S&P500 gained 0.72% and the Dow Jones ended the day up 0.3%. Palantir, the big data analytics software provider, soared 24% on Tuesday to become a $200bn company after posting Q4 results that topped expectations.

In Europe overnight, markets closed mostly higher amid Trump’s tariffs pauses with Mexico and Canada and on the back of strong key corporate results out in the region. The STOXX 600 rose 0.3%, Germany’s DAX added 0.4%, the French CAC climbed 0.7%, and, in the UK, the FTSE100 ended the day down 0.15%.

Across the APAC region on Tuesday, markets rallied as China retaliated to Trump’s tariffs by slapping tariffs on US imports between 10% to 15% for certain goods. Hong Kong’s Hang Seng rose 2.83%, Japan’s Nikkei added 0.72%, South Korea’s Kospi index climbed 1.13% and China’s CSI index remains closed for the Lunar holiday.

Locally yesterday the ASX posted a slight loss of 0.06% yesterday as investors responded to Trump’s tariffs on China coming into effect and the late afternoon retaliation of Beijing placing a 10-15% tariff on certain goods from the US. On Monday, Trump suspended tariffs on Mexico and Canada as discussions between the regions began, while the tariffs in China came into effect late on Tuesday AU time. Tech stocks offset some of the heavy losses yesterday with a gain for the sector of 1.52%, while REIT and consumer discretionary stocks fell 1.06% and 0.76% respectively.

Online jobs advertisement platform Seek’s proposed acquisition of Xref for a value of $42.1m fell through yesterday after Xref’s shareholder voted against the takeover bid. Shares in Xref tumbled 22.6% yesterday while shares in Seek fell just 0.2%.
 Crop protection solution producer Nufarm rallied over 3% on Tuesday after reporting a positive trading update including the expectation to achieve $100m from its omega-3 revenue in FY25 and its belt-tightening program for cost cutting remains on track with $50m of annualised savings.

What to watch today:

• Ahead of the midweek trading session here in Australia the SPI futures are anticipating the ASX will open the day up 0.64% tracking Wall Street’s rebound overnight.
• On the commodities front this morning, oil has slipped to trade 0.70% lower at US$72.65/barrel, gold is up 1.04% at US$2843/ounce and iron ore is up 3.38% at US$105.02/tonne.
• The Aussie dollar has strengthened against the greenback to buy US$0.62, 96.41 Japanese Yen, 50.04 British Pence and NZ$1.11.
• On the reporting season calendar today, BWP Trust will release results.

Trading Ideas:

• Bell Potter has increased the 12-month price target on Nufarm (ASX:NUF) from $4.25 to $4.35 and maintain a buy rating on the crop protection company following the release of a FY25 trading update. The analyst sees it has been a pleasing start to FY25 with strong levels of demand for crop protection products and the company remains on track to deliver $100m in Omega-3 revenues this year. The company is also on track to reduce working capital by 25-days per year end.
• And Trading Central has identified a bearish signal on Cleanaway Waste Management (ASX:CWY) following the formation of a pattern over a period of 15-days which is roughly the same amount of time the share price may fall from the close of $2.70 to the range of $2.63 to $2.65 according to standard principles of technical analysis.

Over in the US on Monday, stocks were heavily sold off in morning trade before recovering some losses in afternoon trade amid news of tariffs between the US and Mexico would be paused for a month as conversations between the presidents of the countries begin. The Dow Jones fell 0.28%, the S&P500 lost 0.76%, and the Nasdaq ended the day down 1.2%.

In Europe overnight markets closed lower after President Trump imposed tariffs on several countries and threatened to expand the tariffs to the European Union and the UK. The STOXX 600 fell 0.93%, Germany’s DAX lost 1.4%, the French CAC fell 1.2%, and, in the UK, the FTSE100 ended the day down 1.04%.

Across the Asia region on Monday negative investor sentiment around Trump’s tariffs spread into the region with Japan’s Nikkei falling 2.66% while South Korea’s Kospi lost 2.52%, Hong Kong’s Hang Seng dropped just 0.04% and, China’s CSI index remained closed for the Lunar holiday.

The local market started the new trading week with a significant sell-off, closing Monday’s session down 1.79% with every sector ending the day lower as investors reacted to the downside risk of flow through effects into our economy from Trump’s tariffs announced over the weekend.

Over the weekend President Trump introduced 25% tariffs on Canadian and Mexican imports and an additional 10% tariff on Chinese goods, which led Canada to retaliate with a 25% tariff on US goods into Canada.

There were few stories of good news on the market on Monday, but Lynas Rare Earths led the ASX200 gains with a rise of 3% despite no news out of the rare earth’s producer. The possible catalyst for the rise in the share price may be due to Gina Rinehart’s Hancock 

Prospecting buying up shares in the rare earth’s producer over recent days.

Magellan shares also tumbled 8.7% yesterday following the departure of the company’s long-standing boss Gerald Stack.

What to watch today:

• Ahead of Tuesday’s trading session on the ASX, the SPI futures are anticipating the ASX will open the day up 0.47%.
• On the commodities front this morning oil is trading 0.26% higher at US$72.71/barrel, gold is up 0.8% at US$2819/ounce, and iron ore is up 0.26% at US$101.59/tonne.
• The Aussie dollar has slightly weakened against the greenback to buy US$0.61, 95.55 Japanese Yen, 49.82 British Pence and NZ$1.11.

Trading Ideas:

• Bell Potter has slightly decreased the 12-month price target on Aeris Resources (ASX:AIS) from 34cps to 29cps and maintain a buy rating on the multi-mine copper and gold producer following the release of the company’s December quarter update. Production at the company’s Tritton mine fell short of Bell Potter expectations while AISC topped BPe, while the company’s Cracow mine produced more gold at a lower cost than BP was expecting. The company’s near-term outlook is highly leveraged to the copper price and increasing grades and production at its Tritton copper mine.
• And Trading Central has identified a bearish signal on Bravura solutions (ASX:BVS) following the formation of a pattern over a period of 7-days which is roughly the same amount of time the share price may fall from the close of $2.11 to the range of $1.93 to $1.97 according to standard principles of technical analysis.

Wall Street had a negative end to the last trading week after President Donald Trump announced aggressive tariffs against major US trading partners would begin on Saturday. The Dow Jones fell 0.75%, the S&P500 lost 0.5% and the tech-heavy Nasdaq ended the day down 0.28%. Stocks with exposure to the key trade partners like Mexico, Canada and China posted greater losses on Friday including Mexican Food outlet Chipotle and Corona brewer Constellation Brands. Over the weekend President Trump introduced 25% tariffs on Canadian and Mexican imports and an additional 10% tariff on Chinese goods, which led Canada to retaliate with a 25% tariff on US goods into Canada.

In Europe on Friday, markets rose to end the week higher following the release of strong earnings results in the region. The STOXX 600 rose 0.13%, Germany’s DAX gained 0.02%, the French CAC added 0.11%, and, in the UK, the FTSE100 ended the day up 0.31%.

Across the APAC region on Friday, markets mostly rose following strength on Wall St on Thursday. Japan’s Nikkei added 0.15%, South Korea’s Kospi Index fell 0.77%, and India’s Nifty 50 added 1.18%, while China’s CSI and Hong Kong’s Hang Seng were both closed for the Lunar New Year. 

What to watch today:

• Locally to end the last trading week, the ASX200 post a 0.45% gain on Friday and 1.83% rise for the trading week as a rally late in the week for mining stocks finished off a strong week on the local market. Rate sensitive sectors like tech, REIT and consumer discretionary stocks also had a strong week after inflation data in Australia came in below economists’ expectations and pave the way for the RBA to seriously consider a rate cut in 2 weeks. 
• Simonds Group shares had a stellar day on Friday with a rise of 27% after leading Australian home building company agreed to pay $10m for the acquisition of Melbourne-based Dennis Family Homes to increase its new construction builds by 25% next financial year.
• PointsBet on the other hand tumbled over 13% on the release of the company’s quarterly trading update including flat growth in quarterly total net win and negative normalised EBITDA of $3.3m for the first half.
• Ahead of the first trading session of the new week and new month the SPI futures are anticipating the ASX will open the day down 1.19% likely due to investor reactions to the Trump tariffs announced over the weekend.
• On the commodities front this morning oil is trading 0.3% lower at US$72.53/barrel, gold is up 0.04% at US$2797/ounce and iron ore is up 0.26% at US$101.59/tonne.
• The Aussie dollar has further weakened to buy 62.15 US cents, 95.37 Japanese Yen, 50.12 British Pence and 1 New Zealand dollar and 10 cents.
• On the reporting season calendar today, Argo Investments will release results today.

Trading Ideas:

• Bell Potter has downgraded the rating on Strike Energy (ASX:STX) from a speculative buy to a speculative hold rating and have a 12-month price target of 27cps on the gas producer following the release of a 2Q trading update outlining production and revenue lower than Bell Potter expected due to maintenance impacting output.
• Trading Central has identified a bullish signal on Nufarm (ASX:NUF) following the formation of a pattern over a period of 11-days which is roughly the same amount of time the share price may rise from the close of $3.65 to the range of $3.86 to $3.92 according to standard principles of technical analysis.

Australian stocks rallied to record highs this week due to easing inflation and positive corporate results, raising hopes for a February rate cut. The upcoming earnings season will reveal the impact of factors like subdued Chinese demand, a weakening Australian dollar, and fluctuating commodity prices on various sectors, including miners, tech, REITs, and consumer discretionary.

In this week’s wrap, Grady covers: 

• (0:50): China’s signs of a post- pandemic recovery
• (1:31): what the gold rally means for gold producers 
• (2:11): the performance of mining stocks 
• (3:30): what to expect this reporting season 
• (4:23): how the local market performed this week so far 
• (5:11): the most traded stocks & ETFs by Bell Direct clients 
• (5:38): economic news items to watch out for. 

Wall St fell overnight as the Federal Reserve left interest rates unchanged in its first policy decision of the year. The Dow Jones fell 0.31%, the S&P 500 dropped 0.47% and the tech-heavy Nasdaq closed just over half a percent higher.

Over in Europe, markets closed higher as corporate earnings results start to get released. The STOXX600 rose by half a percent with gains lead by the technology sector which rose by 2%. Germany’s DAX jumped nearly 1%, the French CAC fell 0.32% and over in the UK the FTSE100 rose by 0.28%.

Locally yesterday the ASX200 rose by 0.57% following the release of important inflation data. The quarterly inflation print has boosted investor sentiment and hopes for the RBA rate cut cycle to begin in February as underling inflation fell at a sharper rate than expected to the lowest level in 3-years of 3.2% for the December quarter.

Star Entertainment shares rose over 13% yesterday after the company made its first sale of non-core assets to the value of $60m for the sale of its Sydney entertainment centre assets. While it isn’t enough to revive the company, it is a welcome start on the journey to rebuilding.

What to watch today:

• The Australian share market is set to open lower with the SPI futures suggesting a fall of 0.06% at market open this morning.
• On the commodities front this morning, 
  • Oil is trading 1.08% lower at 72 US dollars and 97 cents a barrel following concerns over rising US stockpiles.
  • Gold is trading 0.21% lower at 2756 US dollars an ounce and iron ore is trading 0.04% lower at 101 US dollars and 30 cents a tonne.

Trading Ideas:

• Bell Potter has slightly increased the 12-month price target on Pilbara Minerals (ASX:PLS) from $2.95 to $3.00 and maintain a buy rating on the leading lithium producer following the release of the company's 2Q25 results. Despite depreciated pricing of lithium in the current cycle, PLS beat analysts' expectations for sales volumes and average realised pricing.
• Trading Central has identified a bullish signal on Endeavour Group (ASX:EDV) following the formation of a pattern over a period of 41-days which is roughly the same amount of time the share price may rise from the close of $4.23 to the range of $4.37 to $4.41 according to standard principles of technical analysis.

In the US on Tuesday stocks recovered after the sharp sell-off following the emergence of China’s DeepSeek AI model that offers a lower cost alternative to the billions the US is spending in the AI space. The Nasdaq rallied 2.03%, the S&P500 climbed 0.92% and the Dow Jones ended the day up 0.31%. The DeepSeek AI sell-off on Wall St was due to social media buzz over the weekend around the Chinese startup unveiling a free open-source large language model of AI that it says took less than $6 million to build.

In Europe overnight, markets in the region also mostly rebounded on Tuesday in the in the wake of the global AI sell-off that spread through global markets on Monday. The STOXX 600 rose 0.5%, Germany’s DAX added 0.7%, the French CAC fell 0.12% and, in the UK, the FTSE100 ended the day up 0.35%.

Across the Asia region overnight, markets closed mixed as the AI-sell off continued to spread throughout the region. Japan’s Nikkei extended losses for a second session with a loss of 1.4% on Tuesday as China’s AI advancements threaten to challenge the US dominance in the space which flows through to countries like Japan who form a key part of the US AI-chip supply chain, while Hong Kong’s Hang Seng rose 0.14%, and South Korea’s Kospi Index ended the day up 0.85%.

The local market closed the first trading session of the week down 0.12% as fears of China’s AI rival DeepSeek taking power on the AI front dampened investor sentiment to start the holiday shortened trading week.

The datacentre, AI and broad tech rally of the last year took a sudden halt yesterday with local darlings in the sector like Goodman Group, and NextDC each falling over 6% amid the emergence of China’s DeepSeek AI rival and overvaluation fears in the sector.

The DeepSeek fear-based sell-off expanded into the uranium space, sending Paladin Energy and Boss Energy down over 10% each as investors fear less uranium will be needed to fuel nuclear power for the global AI revolution.

Sigma Healthcare rose over 12% yesterday after the Chemist Warehouse merger partner reported a strong trading update from Chemist Warehouse for the first half of FY25 including record sales, up 13% on the PCP, margin expansion through cost management and the opening of 19 new stores in the half. Sigma is set to merge with the discount chemist retail giant next month.

What to watch today:

• Ahead of the midweek session the SPI futures are anticipating the ASX will open the day up 0.43% tracking Wall Street’s rebound on Tuesday so far.
• On the commodities front this morning oil is trading 0.01% lower at US$73.17/barrel, gold is up 0.6% at US$2757.72/ounce and iron ore is flat at US$101.34/tonne.
• The Aussie dollar has slightly weakened against the greenback to buy US$0.62, 97.19 Japanese Yen, 50.22 British Pence, and NZ$1.10.

Trading Ideas:

• Bell Potter has slightly increased the 12-month price target on Bellevue Gold (ASX:BGL) from $1.90 to $2.00 and maintain a buy rating on the gold producer. Despite weaker 2Q production leading to a FY25 guidance downgrade, the analyst sees upside to the share price from continuing improvement in production and cost performance in ongoing production ramp-up and expansion, strong gold prices and near-mine exploration programs.
• And Trading Central has identified a bullish signal on Accent Group (ASX:AX1) following the formation of a pattern over a period of 37-days which is roughly the same amount of time the share price may rise from the close of $2.38 to the range of $2.75 to $2.85 according to standard principles of technical analysis.

In the US on Monday the S&P500 and Nasdaq fell sharply to start the week lower on investor concerns about the AI bubble bursting due to the emergence of Chinese startup DeepSeek which has possibly made a competitive AI model for a fraction of the cost of the billions Silicon Valley is spending in the space. The Nasdaq tumbled 3.07% and the S&P500 lost 1.46%, while the Dow Jones ended the day down 0.65%.

European markets closed slightly lower on Monlday as investors reacted to the breakout of a new Chinese AI competitor. The STOXX 600 fell 0.07%, Germany’s DAX lost 0.53%, the French CAC fell 0.27% and, in the UK, the FTSE100 ended the day flat.

Across the Asia region, markets closed mostly higher on industrial profits in China and on the emergence of an AI rival in China. Japan’s Nikkei fell 0.92% in the days after the Bank of Japan increased the country’s cash rate to the highest level in 17-years, while Hong Kong’s Hang Seng rose 0.66%, China’s CSI index added 0.41% and South Korea’s Kospi Index gained 0.85%. China’s industrial profits jumped 11% from on the PCP, but for the year profits declined for a third straight year in data out yesterday for the month of December.

The local market was closed on Monday for the Australia Day holiday but on Friday the ASX200 posted a 0.36% gain on Friday to end a strong week on the local index following strength in the US on Thursday and strong corporate earnings reports boosting investor sentiment.

Synlait Milk soared 24% on Friday after reporting an impressive turnaround in operations in the first half and increased its guidance for the second half, with an outlook to a return to profitability this year. The milk producer underwent an aggressive cost cutting strategy through reducing head count and is set to increase prices to drive margin appreciation in the second half.

Oil producers locally on Friday tumbled tracking the declining price of oil amid Trump’s comments urging OPEC plus to bring down the price of oil.

What to watch today:

• Ahead of the first trading session of the new trading week the SPI futures are anticipating the ASX will open the day up 0.17%.
• On the commodities front this morning oil is trading 2.06% lower at US$73.14/barrel, gold is down 1.05% at US$2741/ounce and iron ore is flat at US$101.34/tonne.
• The Aussie dollar has strengthened overnight against the greenback to buy 62.85 US cents, 97.24 Japanese Yen, 50.28 British Pence and 1 New Zealand dollar and 11 cents.

Trading Ideas:

• Bell Potter has slightly decreased the 12-month price target on Kogan.com (ASX:KGN) from $5.30 to $5.10 and maintain a hold rating on the online retailer following the release of the company’s preliminary 1H25 update including adjusted EBITDA missing expectations driven by an incremental increase in marketing investment during the promo period and the Mighty Ape re-platforming related issues which persisted through October.
• And Trading Central has identified a bearish signal on Healius (ASX:HLS) following the formation of a pattern over a period of 290-days which is roughly the same amount of time the share price may fall from the close of $1.41 to the range of $0.70 to $0.85 according to standard principles of technical analysis.