Between the Bells

This week, key economic news was released which drove both international and global markets. From inflation data readings coming out of both the US and China, to jobs data coming out in Australia, impacting the local market. Grady dives deep into the impact these readings had on the market as we head towards the festive period.

In this week’s wrap, Grady covers:

• (0:25): the final US inflation reading of 2024
• (1:43): China’s easing inflation, signalling sluggish economic recovery
• (2:45): Australian unemployment falling below economist expectations
• (3:33): how the ASX200 performed this week so far 
• (4:16): the most traded stocks & ETFs by Bell Direct clients 
• (4:42): economic news items to watch out for.

Wall St closed mixed overnight as the Nasdaq closed over 20,000 points for the first time. The Dow Jones fell by 0.22%, the S&P 500 jumped 0.82% and the tech-heavy Nasdaq gained 1.77%. 

US inflation data was released overnight with core inflation coming in steady at 0.3% month on month, the same as its previous result and forecast.

Over in Europe, markets closed higher as US inflation data came in as expected. The STOXX 600 closed 0.28% higher with gains led by media stocks which rose 1.4%, whilst retail stocks dropped 1.7%. Germany’s DAX rose by 0.34%, the French CAC gained 0.39% and over in the UK the FTSE100 ended the trading day 0.26% in the green.

Locally yesterday, the ASX200 fell 0.47% with most major sectors closing in the red. Losses were led by the information technology and industrial sectors which fell by 1.35% and 1.02% respectively. This was offset by the real estate sector which gained 0.81%.

What to watch today:

• The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.45% at market open this morning.
• On the commodities front this morning,
   
  • Oil is trading 2.42% higher at 70 US dollars and 25 cents a barrel, gold is trading 0.76% higher at 2716 US dollars an ounce and iron ore is trading 0.67% lower at 105 US dollars and 63 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Champion Iron (ASX:CIA) which has a current share price of $6.11. The buy rating is maintained by Bell Potter as they see upside risk spots in iron ore prices and the shift to higher grade production in the 2nd half of 2025 will likely support average realized prices and earnings amid an iron ore price environment which is generally expected to weaken.
• And Trading Central has identified a bearish signal in Beach Energy (ASX:BPT), indicating that the price may fall from the close of $1.22 to the range of $1.10-$1.12, on a pattern formed over 38 days, according to the standard principles of technical analysis.

Over in the US on Tuesday markets pulled back from the recent rally to end the day lower as investors await key inflation data out in the US on Wednesday US time. The Dow Jones fell 0.35% on Tuesday, the S&P500 lost 0.3% and the tech-heavy Nasdaq ended the day down 0.25%. The inflation data out on Wednesday is a key economic reading as it will influence the Fed’s last rate decision for 2024 which will be handed down at the FOMC meeting between December 17-18.

In Europe overnight, markets closed lower, snapping an 8-day winning streak as investors in the region also await the final inflation reading of the year from the US. The STOXX 600 fell 0.52%, Germany’s DAX lost 0.08%, the French CAC fell 1.14% and, in the UK, the FTSE100 ended the day down 0.86%.

Across the Asia region on Tuesday, it was a mixed session across the markets as fresh stimulus talks out of China boosted some regions to a positive close. China’s CSI index rose 0.74% on Tuesday, Japan’s Nikkei added 0.53%, while Hong Kong’s Hang Seng fell 0.5%.

China’s trade balance data out for November yesterday indicated further economic struggle out of the world’s second largest economy with imports declining 3.9% while exports rose 6.7% which was sharply lower than the 12.7% growth in October.

The ASX had a significant rally in afternoon trade as investors welcomed the RBA holding the nation’s cash rate at 4.35% for the last meeting of 2024, meaning it will remain at this level until the RBA meets again on the 18th February, 2025. Despite the afternoon rally, the key index still closed 0.4% lower on Tuesday as tech and financial stocks weighed on the key index.

The afternoon rally was the result of investors welcoming RBA governor Michele Bullock’s comments of ruling out a rate hike this period as inflation pressures continued to fall including economic growth and wages growth easing since the November meeting.

Investors bought into the miners yesterday on hopes of further stimulus out of China reigniting demand for Australia’s key commodities. Any news and promises out of Chinese officials regarding stimulus packages and boosts to the Chinese economy have led to gains for the local mining sector over the last 12-months, however, it is a reminder to be cautious about buying into the hype rally before seeing material flow through of the stimulus to economic recovery in the world’s second largest economy.

Australian business confidence data also weighed on investor sentiment yesterday after data revealed business confidence plummeted by 8 points in November to -3 points, reversing October’s gains and signalling tougher market conditions and sentiment from Aussie businesses last month.

Insurance Australia Group fell over 1% on Tuesday after the insurance provider said it intends to defend itself against a class action brought to the Supreme Court of Victoria.

What to watch today:

• Ahead of the midweek trading session here in Australia, the SPI futures are anticipating the ASX will open the day down 0.32% tracking Wall Street’s pullback overnight.
• On the commodities front this morning, oil is trading 0.7% higher at US$68.83/barrel, gold is up 1.16% at US$2691/ounce and iron ore is up 2.14% at US$106.34/tonne.
• The Aussie dollar has further weakened overnight to buy US$0.64, 96.96 Japanese Yen, 50.37 British Pence and NZ$1.10.

Trading Ideas:

• Bell Potter has increased the rating on Pilbara Minerals (ASX:PLS) from a hold to a buy and maintain a 12-month price target on the company of $2.95 following recent share price weakness due to the recent high short position in the company reducing in recent weeks. Bell Potter’s analyst sees lithium markets have stabilised and commodity prices have marginally improved which places PLS as an attractive opportunity given its low-cost asset in a tier one jurisdiction.
• Trading Central has identified a bullish signa

Over in the US on Monday afternoon trade, Wall St has pulled back from record territory as investors look ahead to key inflation data out later this week in the US. The Nasdaq and S&P500 retreated from record highs to end the day down 0.61% and 0.61% respectively, while the Dow Jones ended the day down 0.54%. Nvidia shares lost 2.6% on Monday following a Chinese regulator announcing it is investigating the AI semiconductor giant for potentially violating the country’s antimonopoly law.

In Europe overnight, markets mostly extended the positive run from last week into the new trading week as investors assessed further stimulus talks out of China, a key trading area for Europe. The STOXX 600 rose for an eighth straight session to close 0.14% higher, Germany’s DAX fell 0.19%, the French CAC rose 0.72% and, in the UK, the FTSE100 ended the day up 0.52%. Chinese leaders on Monday promised more proactive fiscal measures and moderately looser monetary policy for next year.

Across the Asia region on Monday, markets closed mixed amid revised economic growth data out of Japan and on the release of China’s November inflation data. Japan’s Q3 GDP growth was revised up from 0.2% to 0.3% on a QoQ basis which topped analysts’ estimates and boosted Japan’s Nikkei to a 0.1% rise on Monday. China’s CPI or inflation data on the other hand was also released on Monday and had the opposite response from investors as inflation in the region rose 0.2% YoY in November which missed expectations and was a decrease from the 0.3% rise in October indicating further sluggish recovery in the region, this led to China’s CSI index falling 0.6% on Monday. Hong Kong’s Hang Seng also fell 0.6% on Monday and South Korea’s Kospi Index ended the day down over 2% on political instability.

The local market had a lacklustre start to the week however recovered from early losses on Monday to end the day with a rise of just 0.03%. Consumer discretionary stocks boosted the market to a positive close yesterday with a rise of 0.64% while the energy sector fell 1.05% tracking the weaker price of oil over recent weeks.

Aussie telco provider Superloop rallied 1.8% on Monday after announcing it has entered a deal to acquire Optus’ subsidiary brand Uecomm for $17.5bn which will add over 2000km of high-capacity fibre assets to Superloop’s brand.

Platinum asset management tumbled 14.35% on Monday after its takeover talks with Regal Partners ended with no deal reached. This was on top of Platinum also announcing its Funds Under Management took a major hit in November.
And capital raisings hit a few companies share prices yesterday with Calix ending the day down 12.22% after announcing the completion of an institutional placement that raised $20m at 75cps, while Paradigm Biopharmaceuticals tumbled 7.76% after raising $16m at 40cps, which is over a 30% discount to the previous closing price of the share.

What to watch today:

• Ahead of Tuesday’s session on the ASX the SPI futures are anticipating the ASX will open the day up just 0.04%.
• On the commodities front this morning, oil is trading 1.95% higher at US$68.51/barrel, gold is up 1.25% at US$2666.13/ounce, and iron ore is down 2.05% at US$104.11/tonne.
• The Aussie Dollar has further weakened overnight to buy US$0.64, 97.70 Japanese Yen, 50.19 British Pence and NZ$1.10.
• We may also see investors react to the RBA’s rate decision and commentary around the last rate decision for 2024 this afternoon where it is widely expected Australia’s central bank will hold the cash rate at the current level of 4.35%.

 Trading Ideas:

• Bell Potter has downgraded the rating on Platinum Asset Management (ASX:PTM) from a hold to a sell and have significantly dropped the price target on the company from $1.21 to 74cps following funds under management dropping over 10% in November to $10.957bn and on the back of merger talks ending with Re

Wall St closed mixed on Friday as the S&P 500 finished the week at a record close. The Dow Jones fell 0.28%, the Nasdaq gained 0.81% and the S&P 500 rose by 0.25%.

Over in Europe, markets closed higher on Friday despite the latest political turmoil in France. The STOXX600 rose by 0.2% as investors digested news that a vote toppled the French Prime Minister’s government on Wednesday evening. Germany’s DAX rose by 0.13%, the French CAC jumped 1.31% and over in the UK the FTSE100 fell by half a percent.

Locally on Friday, the ASX200 closed 0.64% lower, with all but one major sector closing in the red. Losses were led by the energy and consumer discretionary sectors which fell by 1.21% and 0.94% respectively. This was offset by the utilities sector which rose by 0.39%.

What to watch today:

• The Australian share market is set to open lower, with the SPI futures suggesting a fall of 0.3% at market open this morning.
• On the commodities front this morning,
  • Oil is trading 1.61% lower at 67 US dollars and 20 cents a barrel, gold is trading 0.02% lower at 2633 US dollars an ounce and iron ore is trading over 2% lower at 104 US dollars and 11 cents a tonne.

Trading Idea:

• Bell Potter downgrades its buy rating to a hold for Resource Development Group (ASX:RDG) which has a current share price of 2.4 cents. A hold rating has been recommended as RDG’s share price has come under pressure following shareholder concern regarding parent entity Mineral Resources’ governance affairs.

In a special edition of our Weekly Wrap newsletter, Bell Direct Advantage brings you exclusive insights straight from the helm of the rising stars of the mining industry. Join us as we delve into the captivating world of the ASX’s resources sector. Grady Wulff sits down with six key executives from the Resources Rising Stars summer series. Gain valuable insights into their strategic vision, growth potential, and innovation approaches that are driving their success.

Wall St closed lower overnight as investors await for further economic data including unemployment data coming out in Friday’s trading session. The Dow Jones fell over half a percent, the S&P 500 dropped 0.19% and the tech-heavy Nasdaq lost 0.18%.

US unemployment data for November will be released after local market close tonight with a forecast to maintain at 4.1%, the same as its previous result.

Over in Europe, markets closed higher after the STOXX600 maintained its positive momentum, rising 0.43%.  Banks and travel stocks led gains, both up over 2%, whilst oil and gas stocks dropped 0.35%. Germany’s DAX rose 0.63%, the French CAC closed the day 0.37% higher and over in the UK the FTSE100 ended the day 0.16% in the green.

Locally yesterday, the ASX200 rose by 0.15% with half of the major sectors ending Thursday’s trading session positively. Gains were led by the information technology and the consumer discretionary sectors which gained 1.13% and 1.08% respectively. This was offset by the real estate sector which fell by 1.38%.

What to watch today:

• The Australian share market is set to open lower, with the SPI futures suggesting a fall of 0.24% by market open this morning.
• On the commodities front this morning, 
  • Oil is trading 0.03% lower at 68 US dollars and 52 cents a barrel, gold is trading 0.72% lower at 2631 US dollars an ounce and iron ore is trading 0.2% higher at 106 US dollars and 29 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Perpetual Ltd (ASX:PPT) and has a 12-month price target of $24.76. The current share price of $21.82 indicates a share price growth of 13.5%, hence the buy rating is maintained.
• And Trading Central has identified a bullish signal on G8 Education (ASX:GEM), indicating that that the stock price may rise from the close of $1.39 to the range of $1.59-$1.65, on a pattern formed over 90 days, according to the standard principles of technical analysis.

Locally yesterday the ASX200 closed 0.38% in the red with eight of the eleven industry sectors lower. Real estate was down the most, while materials, information technology and energy sectors were the only sectors to close in the green. 

In US equities overnight, the S&P500 and the Nasdaq both reached record highs, as technology shares led markets, rallying after strong reports released from Salesforce and Marvell Technology. Tech shares saw the Nasdaq close 1.3% higher, the S&P500 gained 0.61%, while the Dow Jones gained 0.69% or 308 points to close above 45,000 for the first time ever. 

European markets were mostly higher. The STOXX 600 up 0.37%, the German DAX up more than 1%, France’s CAC up 0.66%, while the FTSE 100 declined 0.28%. 

What to watch today:

• The Australian market is set to open higher this morning, with the SPI futures suggesting a rise of 0.12% at the open. 
• In economic data, the GDP growth rate was released yesterday, coming in slightly below expectations at 0.3% for the quarter. Today, Balance of Trade data for October will be released at 11:30am AEDT. The prior reading for September saw Australia’s trade surplus on goods declined, falling short of market expectations. 
• In commodities, 
• Crude oil is trading lower, settling at US$68.50 per barrel, reversing gains from a rise of 2.7% the previous session, as investors await an important OPEC _ decision on production policy. The decision on output cuts is expected to significantly sway prices. 
• Gold is in the green as markets continue to assess the political and monetary outlook
• And iron ore is trading higher, supported by hopes that Beijing will introduce more stimulus measures during its political meetings this month. 

Trading Ideas:

• Bell Potter has initiated coverage of Integral Diagnostics (ASX:IDX). The merger between Integral Diagnostics and Capitol Health results in a diagnostic imaging company which operates 151 clinics throughout Australia. Bell Potter’s price target is $3.87 and at IDX’s current share price of $3.04, this implies 27.3% share price growth in a year. 
• And Trading Central have identified a bullish signal on Australian Clinical Labs (ASX:ACL) indicating that the stock price may rise form the close of $3.63 to the range of $3.78 - $3.82 over 15 days, according to the standard principles of technology analysis. 

On Wall Street overnight the S&P 500 notched another fresh record high ending the day up 0.05%, while the Nasdaq added 0.4% and the Dow Jones underperformed the market with a decline of 0.17%. Key US jobs data also out overnight indicated there were more job openings in October than September with 7.74 million openings which topped Dow Jones estimates of 7.5 million, indicating the labour market is cooling.

In Europe overnight markets closed mostly higher as investors assessed political instability in France. The STOXX 600 rose 0.44%, Germany’s DAX added 0.42%, the French CAC rose 0.3% which was a pullback from earlier gains following France’s PM Michael Barnier turning to special constitutional powers to pass a contested budget bill without parliamentary vote. And, in the UK, the FTSE100 ended the day up 0.56%.

Across the Asia markets on Tuesday, it was a green finish as markets in the region tracked record closes for the S&P 500 and Nasdaq in the US on Monday. Japan’s Nikkei rose 2.22% on Tuesday, Hong Kong’s Hang Seng rose 1%, South Korea’s Kospi index added 1.71%, and China’s CSI index added 0.11%.

The ASX rose 0.6% on Tuesday setting a third record high in the past week and boosting the key index over 8500 for the first time in history during the day. The year-to-date gains for the ASX have now risen to almost 12% buoyed by the strong tech rally this year which has propelled the tech sector up 58% year-to-date. KFC Australia operator Collins Foods (ASX:CKF) lagged the market gains yesterday with a loss over 4% after the company revised FY25 earnings guidance downwards amid a challenging consumer market and sticky inflationary pressures. Zip Co (ASX:ZIP) shares also fell 0.6% after co-founder Larry Diamond sold $100m worth of shares in the buy now, pay later company a day after he resigned from the board to focus on family and philanthropic ventures.

What to watch today:

• Australia’s retail sales data for October released on Monday showed that despite the high cost-of-living environment, Aussies are still spending with retail sales up 3.4% in October compared to a year earlier. Cafes, restaurants, and takeaway services recorded a rise of 2.3% while ‘other retailing’ which includes cosmetics, sport and recreational goods’ rose a significant 8.4%. This rise in retail spend adds to the RBA’s inflation journey headache as retail spend is a key driver of inflation remaining sticky in Australia.
• On the commodities front this morning, oil is trading almost 3% higher at US$70.15/barrel, gold is up 0.12% at US$2645/ounce and iron ore is up 2.81% at US$105.32/tonne.
• The Aussie dollar has slightly weakened overnight to buy US$65.11, 96.88 Japanese Yen, 51.14 British Pence and NZ$1.10.
• Ahead of the midweek trading session in Australia the SPI futures are anticipating the ASX will open the day down 0.35%.

Trading Ideas:

• Bell Potter has initiated coverage of Fenix Resources (ASX:FEX) with a buy rating and a price target of 41cps as the analyst sees the WA-based mining company’s portfolio of low-capital mining assets and integrated logistics networks should continue to underpin robust cash flows, funding growth expenditure and shareholder returns.
• Trading Central has identified a bullish signal on Nick Scali (ASX:NCK) following the formation of a pattern over a period of 24-days which is roughly the same amount of time the share price may rise from the close of $14.47 to the range of $15.40 to $15.60 according to standard principles of technical analysis.

Our local market yesterday started the week in the green, closing 0.14% higher with technology, consumer discretionary and energy in the lead. Overnight, Wall Street saw technology stocks improve. The Nasdaq closed at records to kick off the first trading day of December, up 0.97%. The S&P500 briefly hit an all-time high before closing 0.24% in the green, while the Dow Jones was just under, closing 0.29% lower. Intel was in focus, making strong gains before sharply falling before the close, after announcing its CEO Pat Gelsinger will be retiring. Super Micro Computer (NASDAQ:SMCI) jumped after announcing the search of a new finance chief – this also follows the announcement that the business found no evidence of fraud or misconduct. It’d share price has been on a rollercoaster ride this year due to claims of accounting manipulation. And retail stocks also did quite well, off the back of the Black Friday and Cyber Monday sales, which saw strong gains from Macy’s and Lululemon, among others. 

What to watch today: 

• The SPI futures are pointing to an improvement, suggesting our local market will open 0.73% higher this morning. 
• In commodities, 
  • The iron ore price should be supported today, with recent data showing that China’s factory activity expanded at its fasted pace in 5 months. This was above expectations, signalling an expansion in activity. Now note, the rate of change is still modest, however it is a pickup in activity for China. 
  • Gold is trading lower, therefore sector worth watching in early trade today. 
  • And crude oil is also trading lower, as investors monitor the bullish economic data from China and await the upcoming OPEC+ meeting. 
• The US dollar continued its unstoppable run, which has seen the Aussie dollar is back to the bottom end of its recent rage at US$0.65. And buying 96.85 Japanese Yen, 0.51 British pence and NZ$1.10. 

Trading Ideas: 

• Bell Potter maintains their BUY rating on Northern Star Resources (ASX:NST), a large-scale Australian gold producer with projects in Western Australia and North America. Northern Star Resources and DeGrey Mining (ASX:DEG) announced that they have agreed that NST would acquire DEG by Scheme of Arrangement. Their price target is $19.55 and at NST’s current share price of $16.59, this implies 17.8% share price growth in a year. Bell Potter also have a Speculative Buy rating on DEG with a valuation of $2.15 per share. 
• Also in the gold sector, Bell Potter maintains a Buy rating on Gold Road Resources (ASX:GOR), off the back of the Northern Star Resources and DeGrey Mining acquisition announcement. Gold Road Resources are the largest shareholder of DeGrey Mining. Bell Potter’s increased their [roce target from $2.40 to $2.55, and at it’s current share price of $2.04, this implies 25% share price growth in a year.