Between the Bells

This week, several ASX-listed companies provided quarterly updates as we close out Q1. Among those reporting were Commonwealth Bank, James Hardie, and Xero. Additionally, check out Grady’s insights on the key themes for FY25 as depicted in Q1 results.

In this week’s wrap, Grady covers:

• (0:23): CBA soared to record highs, but what does the outlook suggest?
• (2:05): Xero maintains profitability, how did markets react?
• (3:54): the key themes and outlook for FY25
• (5:15): how the ASX200 performed this week so far 
• (6:17): the most traded stocks & ETFs by Bell Direct clients 
• (6:47): economic news items to watch out for.

Wall St extended its post-rally breather into Wednesday with the major averages ending the day mostly flat. The Dow Jones rose 0.11%, the S&P500 added just 0.02% and the tech-heavy Nasdaq ended the day down 0.26%.

The US CPI index for October showed inflation rose to an annual rate of 2.6% which met economists’ expectations and was a slight uptick from the 2.4% reported in September. Core inflation which excludes food and energy rose 3.3% in the last month which also met expectations.

Over in Europe on Wednesday, the global market pullback extended into the Euro region with the STOXX 600 falling 0.17%, while Germany’s DAX lost 0.16%, the French CAC fell 0.14% and, in the UK, the FTSE100 ended the day up just 0.06%.

Across the Asia region overnight, markets in the region mostly fell in line with the global market sell off and as investors assessed corporate goods data out of Japan showing YoY price growth reached its highest level since July 2023, for the month of October with a reading of 3.4%. China’s CSI index rose 0.62%, while Hong Kong’s Hang Seng fell 0.45%, Japan’s Nikkei lost 1.66% and South Korea’s Kospi index ended the day down 2.64%.

Locally yesterday, the ASX200 tumbled 0.75% taking lead from Wall Street’s losses on Tuesday US time, as investors took a breather from the recent post-election rally. 10 of the 11 sectors on the ASX ended Wednesday’s session in the red led by financials stocks falling 1.07%.

CBA shares fell almost 0.5% on Wednesday after the leading Aussie bank released a quarterly trading update including operating income out 3.5%, OpEx up 3%, and unaudited statutory NPAT of $2.5bn. CBA shares hit a record $150/share on Tuesday and a vast number of market participants continue to question whether this valuation is fair or if the bank is overvalued.

Building materials producer James Hardie Industries bucked the sell-off on Wednesday to close higher despite outlining profit dropped 23% in Q2FY25 results out yesterday due to weakness in Europe and China, while its North American division, the key driver of revenue, is expected to continue growing into FY26.

In economic data out yesterday, Australia’s wage price index rose at the weakest level since Q4 2022 with a QoQ rise of just 0.8% and an annual rise of 3.5%, both of which fell short of economist’s expectations and provide a strong sign of inflation easing in Australia as wages inflation has been a key driver of the stickiness of inflation in recent months.

What to watch today:

• Ahead of Thursday’s trading session in Australia the SPI futures are anticipating the ASX will open the day up 0.35% despite the global market turbulence overnight.
• On the commodities front this morning, oil is trading 0.24% lower at US$67.95/barrel, gold is down 1.18% at US$2575.86/ounce and iron ore is down 0.14% at US$102.96/tonne.
• The Aussie dollar has weakened again overnight against the greenback to buy US$0.65, 100.83 Japanese Yen, 51.20 British Pence and NZ$1.10.

Trading Ideas:

• Bell Potter has increased the 12-month price target on Light and Wonder (ASX:LNW) from $165 to $180 and maintain a buy rating on the gaming technology provider following the release of the company’s Q3 update including 12% YoY revenue growth and adjusted NPATA of US$122m which is growth of 23% YoY. The company’s outlook target of FY25 AEBITDA at US$1400m was reaffirmed.
• And Trading Central has identified a bearish signal on South32 (ASX:S32) following the formation of a pattern over a period of 21-days which is roughly the same amount of time the share price may fall from the close of $3.54 to the range of $3.19 to $3.27 according to standard principles of technical analysis.

The Wall Street post-election rally took a breather on Tuesday from the record highs set across the major averages in recent sessions. The Dow Jones fell 0.86%, the S&P500 lost 0.3%, and the Nasdaq ended the day down 0.09%. Treasury yields also climbed on Tuesday with the 10-year adding around 10 basis points which also weighs on investor appetite for equities.

In Europe overnight, markets closed lower in the region as investors digested what the Trump White House could mean for the eurozone economy. The STOXX 600 fell 2.01% as mining stocks led the losses, while Germany’s DAX fell 2.13%, the French CAC lost 2.7% and, in the UK, the FTSE100 ended the day down 1.22%.

Across the Asia markets on Tuesday, it was a sea of red to end the trading day as investors assessed key economic data out in the region including retail sales and business confidence data. Japan’s Nikkei fell 0.4% on Tuesday, China’s CSI index lost 1.1%, Hong Kong’s Hang Seng tumbled 2.84% and South Korea’s Kospi Index ended the day down 1.94%.

The local market started the week lower as miners weighed on the local index amid weakened commodity prices across the board on China’s lacklustre stimulus and demand outlook. The ASX closed 0.13% lower on Tuesday as a sharp selloff in materials and energy stocks offset a near 1.4% rally among tech stocks.

Uranium miner Paladin Energy tanked over 20% on Tuesday after the company cut its production guidance for FY25 at its Langer Heinrich Mine in Namibia amid ongoing challenges and operational variability to date that is impacting the ramp up in production at the mine. The new FY25 production guidance from the Langer Heinrich Mine is expected between 3-6m pounds of uranium, below the previously issued guidance of 4-4.5m pounds and management withdrew all other guidance for FY25.

A boom in New Zealand-based claims for insurer NIB is expected to hit profits for the first half, as NIB said ‘extraordinary growth in NZ claims’ would result in an operating loss in the first half of around $10m. Shares in NIB fell 0.7% on Tuesday.

Westpac Consumer Confidence for November and NAB Business confidence for October were released yesterday with both strongly beating economists’ forecasts. Consumer confidence decreased slightly to 5.3% from 6.2% in October but this was well above the forecast of a decline to minus 0.8%, while business confidence rose to 5 points in October from minus 2 points in September and beat the market expectations of a rise to 2 points. Easing inflation was the driver of the boost in confidence readings.

What to watch today:

• Ahead of the midweek session here in Australia the SPI futures are anticipating the ASX to open the day down 0.98% on the back of the global market sell off on Tuesday.
• On the commodities front this morning, oil is trading 0.39% higher at US$68.31/barrel gold is down 1.11% at US$2595/ounce and iron ore is down 0.7% at US$103.10/tonne.
• The Aussie dollar has weakened against the greenback to buy US$0.65, 100.92 Japanese Yen, 51.10 British Pence and NZ$1.10.

Trading Ideas:

• Bell Potter has initiated coverage of Woolworths with a hold and a 12-month price target of $31.75. The analyst says the recent share price correction follows the commencement of legal action by the ACCC and softer 1H25 guidance.
• Bell Potter has initiated coverage of Perenti (ASX:PRN) with a buy rating and a 12-month price target of $1.47 with the analyst noting shares should appeal to investors as they trade 6x under FY25 EPS, offer high cash generation, a discount NTA of $1.26/share and offer a 6% yield with an approx. 3% buyback planned. The buy is also supported by higher mining and drilling demand for gold in Australia and Africa.

Wall St closed higher to start the trading week as the Dow Jones closes above 44,000 for the first time ever, jumping 0.69%. The S&P500 rose by 0.1% and the tech-heavy Nasdaq gained 0.06%.

In terms of US stocks, JP Morgan Chase and Goldman Sachs rallied 1.1% and 2.3% respectively as investors hope that Trump’s election into the white house could lead to easier regulation in the banking sector.

Over in Europe, markets closed higher ahead of important economic data readings this week including inflation readings in Germany and the US and GDP readings in the UK. The STOXX600 closed 1.1% higher with the majority of sectors closing Monday’s trading session in 

the green, with construction and materials stocks gaining 2%. Germany’s DAX rose 1.21%, the French CAC gained 1.2% and over in the UK, the FTSE100 closed Monday’s trading session 0.65% higher.

Locally yesterday, the ASX200 closed 0.35% lower to start the trading week. Losses were led by the materials and consumer staples sectors which fell 2.8% and 1.84% respectively. This was offset by the information technology sector which rose 1.39%.

What to watch today:

• The Australian share market is set to open flat, with the SPI futures suggesting a slight rise of 0.01% at market open this morning.
• On the commodities front this morning,
   
  • Oil is trading 3.09% lower at 68 US dollars and 21 cents a barrel after China’s economic stimulus measures fell short of expectations, increasing concerns for the demand for oil. 
  • Gold is trading 2.3% lower at 2622 US dollars an ounce and iron ore is trading 1.33% lower at 103 US dollars and 82 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Infomedia (ASX:IFM) and has a 12-month price target of $1.78. The current share price of $1.29 predicts a 12-month share price growth of 37.5%, hence the buy rating is maintained.
• Trading Central has identified a bearish signal in Treasury Wine Estates (ASX:TWE), indicating that the stock price may fall from the close of $11.01 to the range of $9.30-$9.70, on a pattern formed over 35 days, according to the standard principles of technical analysis.

Wall St topped record territory on Friday with the S&P500 and Dow Jones ending the day at fresh record highs in the wake of Trump’s election victory and the Fed cutting interest rates by 25-basis points late last week. The S&P500 rose 0.38% to a fresh record 5,995.54 points, while the Dow Jones rose 0.6% to a fresh record 43,988.99 points and the Nasdaq ended the day up 0.09%.

Despite the rally, investors are concerned about the large federal deficit and increased tariffs sparking fears of an uptick in inflation in the US.

Across European markets on Friday, markets in the region closed lower as investors assessed key corporate results and rate cuts out of the Bank of England and US Fed. The STOXX 600 fell 0.66%, Germany’s DAX fell 0.8%, the French CAC lost 1.17% and, in the UK, the FTSE100 ended the day 0.84%.

Shares in British Airways owner company IAG rose 6% on Friday after reporting a 15% uptick in third-quarter profit which beat analysts’ expectations.

The Asia region closed mixed on Friday after China’s central government announced it would allocation a further 6 trillion yuan too local governments to help tackle debt issues.

Locally on Friday the ASX 200 rallied sharply, ending the day up 0.84% led by a surge in tech stocks while the energy sector was the only sector to end the day in the red. For the week the ASX had its best week since mid-August with a gain of 2.17%. Further stimulus out of China and another rate cut in the US were the drivers of the local rally on Friday.

Leading global geolocation tracking tech provider Life 360 soared to a record high on Friday after UBS raised its price target on the company’s US shares from US$35 to US$50.

Biotech company Neuren soared a further 14% on Friday extending its rally of the last few sessions after reporting strong US sales of its Daybue drug which is used for the treatment of Rett Syndrome.

Elsewhere in the healthcare space, Mayne Pharma rose 14% on Friday after the AFR reported Jefferies Australia has been quietly marketing the company to prospective buyers.

What to watch today:

• Ahead of the first trading session of the new week, the SPI futures are anticipating the ASX to open the day down 0.43%.
• On the commodities front this morning, oil is trading 2.74% lower at US$70.38/barrel, gold is down 0.83% at US$2684/ounce and iron ore is down 1.33% at US$103.82/tonne.
• The Aussie dollar is buying US$0.65, 100.56 Japanese Yen, 50.92 British Pence and NZ$1.10.

Trading Ideas:

• Bell Potter has increased the 12-month price target on REA Group (ASX:REA) from $239 to $258 and maintain a buy rating on the leading online property advertising and service-related tech company following the release of the company’s 1Q 25 trading update including listings growing 7%, group revenue up 21%, and the outlook for double-digit buy yield growth.
• And pre-IPO company Cuscal (ASX:CCL) told the market on Friday that it has excess demand for the shares on offer as part of an IPO with the payment’s infrastructure company preparing for its market debut on November 21 where it hopes to raise $136m with a $437m market value on debut.

This week saw global markets rally in anticipation of the outcome of the US Presidential Election earlier this week. Wall Street rallied following Donald Trump’s second win of the US presidential election, with the major averages reaching record highs at the closing bell on Wednesday. 

In this week’s wrap, Grady covers:

• (0:42): why the gold price took a hit this week
• (1:22): EV giant Tesla’s share price jump
• (2:12): how energy & industrials performed this week
• (3:27): stock & sector beneficiaries of the Trump victory 
• (4:51): how the ASX200 performed this week so far 
• (5:40): the most traded stocks & ETFs by Bell Direct clients 
• (6:10): economic news items to watch out for.

Wall St ended Wednesday’s trading session with its major benchmarks hitting record highs as Donald Trump regained the title of President of the United States of America. The Dow Jones had its best day since 2022 jumping 3.57%, the S&P 500 rose by 2.53% and the tech-heavy Nasdaq gained 2.95%.

In terms of US shares, Tesla whose CEO, Elon Musk is seen as a massive backer of Trump saw shares jump 14%, whilst bank shares also saw a rise with JP Morgan climbing 10% and Wells Fargo rallying 12%.

Over in Europe, European markets close lower as investors react to Donald Trump winning the US election. The STOXX600 fell 0.59% with the majority of sectors ending the trading day in the red. Losses were led by the utilities sector which fell 2.61%, whilst financial services stocks gained 1.84%. Germany’s DAX lost 1.13%, the French CAC dropped over half a percent, and over in the UK the FTSE100 ended Wednesday’s trading session 0.07% lower.

Locally on Wednesday the ASX200 rose 0.8% with 8 of the 11 sectors ending the day in the green. Dual listed companies in the US and Australia felt an extra boost yesterday on the back of the election rally with Light & Wonder rising 4.7%, while News Corp added 4% and Block Inc. surged 4.1%.

What to watch today:

• The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.24% at market open this morning.
• On the commodities front this morning,
  • Oil is trading 0.05% lower at 71 US dollars and 94 cents a barrel as investors react to the potential impact Trump’s election will have on the energy market.
  • Gold has fallen 3.08% to 2661 US dollars an ounce following the strengthening value of the US dollar.
  • And iron ore is trading 1.14% higher at 105 US dollars and 9 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Austal Limited (ASX:ASB) and has a 12-month share price target of $3.75. The current share price of $3.25 shows a 15.4% share price growth over the next 12-months, hence the buy rating is maintained.
• And Trading Central has indicated a bullish signal on Aspen Group (ASX:APZ), indicating that the stock price may rise from the close of $2.19, to the range of $2.58-$2.66, on a pattern formed over 27 days, according to the standard principles of technical analysis.

With the US election voting happening now, the markets responded with a rally on Wall St on Tuesday as the outcome of the election is expected to be tight between Kamala Harris and former President Donald Trump. The S&P500 rose 1.23% on Tuesday, while the Nasdaq added 1.43% and the Dow Jones ended the day up 1.02%.

Based on historical data, the major averages tend to rally between Election Day and the end of the year, but investors should brace for some choppiness especially if there is uncertainty over the outcome of the election.

Over in Europe overnight, markets closed mostly higher as global markets await the outcome of the US election. The STOXX 600 rose 0.06% led by industrials stocks rallying 1.2%, while Germany’s DAX added 0.6%, the French CAC rose 0.5% and, in the UK, the FTSE100 ended the day down 0.14%.

In Asia on Tuesday markets closed mixed ahead of the outcome of the US election and on the back of the RBA holdings rates on Tuesday in Australia. Japan’s Nikkei rose 1.43% while South Korea’s Kospi Index fell 0.47%, and China’s CSI index rose 2.29% after China’s services sector in October grew at its fastest rate in three months climbing to 52 points in October from 50.3 points in September.

The ASX had a light day of trading yesterday due to the Melbourne Cup, but markets still closed lower by 0.4% as investors responded to the RBA holding the nation’s cash rate at 4.35% for the period ahead. RBA Governor Michele Bullock signalled the RBA is not comfortable enough to say inflation is sustainably in the target band and more data is needed to convince the central bank that the recent ease of inflation is not just temporary.

There was a lot of movement stock specific wise yesterday with Domino’s Pizza falling 6.3% after the company’s Chief Executive Don Meji announced he will be exiting the company after 22-years leading the Pizza giant. The announcement came amid weak sales outlined in the latest trading update.

Mineral Resources shares recovered 4.1% yesterday, a day after news hit that the mining giant’s founder Chris Ellison would step down in the next 18-months after board found he was allegedly using company resources for personal business.
 And emerging copper-gold miner Firefly Metals rallied 1.6% yesterday after RBC Capital Markets initiated coverage on the company with an outperform rating.

What to watch today:

• Ahead of the midweek trading session the SPI futures are anticipating the ASX to open the day up 0.75% on the back of Wall Street’s rally.
• On the commodities front this morning, oil is trading 1.05% higher at US$72.22/barrel, gold is up 0.22% at US$2741/ounce and iron ore is up 1.4% at US$103.91/tonne.
• The Aussie dollar is buying US$0.66, 100.65 Japanese Yen, 50.85 British Pence and NZ$1.11 cents.

Trading Ideas:

• Bell Potter has reduced the 12-month price target on Talga Group (ASX:TLG) from $2.35 to $1.90 and maintain a speculative buy rating on the battery materials and technology company after the company received a positive update in relation to its Natura 2000 environmental permit for its Nunasvaara natural graphite project in Sweden. The permit issued by the Mining Inspectorate of Sweden provides Talga the rights to conduct mining activities over a period of 25-yeas with options for extension. With this in mind, Bell Potter’s analyst now adjusted the timeline to production allowing for construction commencing in Q3, 2025 and first production in CY27. The reduction in price target is due to adjustments on timing and dilution expectations heading into production.
• And Trading Central has identified a bearish signal on Aussie Broadband (ASX:ABB) following the formation of a pattern over a period of 32-days which is roughly the same amount of time the share price may fall from the close of $3.63 to the range of $3.22 to $3.30 according to standard principles of technical ana

Wall St closed lower overnight as investors await results from the US federal election this week. The Dow Jones fell 0.61%, the S&P500 lost 0.28% and the tech-heavy Nasdaq dropped 0.33%.

Over in Europe, markets closed lower with the STOXX600 closing 0.3% lower. Technology stocks were the biggest losers, lowering 1.1%, whilst banks gained 0.7%. Germany’s DAX lost 0.56%, the French CAC dropped half a percent and over in the UK the FTSE100 closed slightly higher by 0.09%.

Locally yesterday, the ASX200 closed 0.56% higher with the majority of sectors closing in the green by the closing bell. Gains were led by the information technology and utilities sectors which rose by 1.71% and 1.7% respectively. This was offset by the energy sector which fell by 0.71% by the end of the trading day.

What to watch today:

• The Australian share market is set to open lower, with the SPI futures suggesting a fall of 0.4% by market open this morning.
• In terms of economic news, the RBA interest rate decision will be released today with a forecast and consensus for it to stay steady at its previous result of 4.35%. The US presidential results will also be announced after local market close today.
• On the commodity front this morning,
  • Oil is trading 3.12% higher at 71 US dollars and 71 cents a barrel as there are concerns that Iran may strike back at Israel in the coming days. 
  • Gold is trading flat at 2736 US dollars an ounce and iron ore is trading 1.29% lower at 102 US dollars and 49 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on AV Jennings Limited (ASX:AVJ) and has a current 12-month price target of $0.45. The current share price of $0.30 indicates a share price growth of 50%, hence the buy rating is maintained.
• And Trading Central has identified a bullish signal in Resimac Group (ASX:RMC) , indicating that’s the stock price may rise from the close of $0.89 to the range of $1.01-$1.03, on a pattern formed over 74 days, according to the standard principles of technical analysis.

Wall Street closed higher at the close of the first trading session for November despite the release of a weaker-than-expected jobs report out in the U.S. The unemployment rate held at 4.1% in October, but the US economy added just 12,000 jobs over the month which fell well short of economists’ expectations of 100,000 jobs being added.

The Nasdaq gained 0.8% on Friday, the S&P500 rose 0.41% and the Dow Jones ended the day up 0.7%.

Amazon rallied over 6% on the back of stellar quarterly results while Intel also added 7.8% on strong revenue and guidance exceeding expectations. 

Over in Europe on Friday markets in the region closed higher, rebounding from 3 negative sessions. The STOXX 600 rose 1.1%, Germany’s DAX added 0.93%, the French CAC gained 0.8% and, in the UK, the FTSE100 ended the day up 0.83%.Across the Asia markets on Friday, it was mostly a sea of red led by Japan’s Nikkei falling 2.6% after the bank of Japan held interest rates steady for the next period. China’s manufacturing purchasing managers index for October came in at 50.3 points which topped economists’ expectations and showed a positive uptick in economic output in the region.

Locally on Friday the ASX200 fell half a percent to close at the lowest level in 7-weeks as investors reacted to Q3 producer price index data coming in lower than expected with an annual rise of 3.9% compared to the 4.8% economists were expecting. The price of gold rose 6% over October which propelled gold miners on the ASX with tailwinds expected to continue for the foreseeable future while oil prices steadied on Friday following weeks of volatility.

What to watch today:

• Ahead of Monday’s trading session the SPI futures are anticipating the ASX will open the day up 0.44%.
• On the commodities front this morning, oil is trading 0.33% higher at US$69.49/barrel, gold is down 0.4% at US$2736/ounce, and iron ore is down 1.24% at US$104.29/tonne.
• The Aussie dollar is buying 65.81 US cents, 50.86 British pence, 100.55 Japanese yen and 1 New Zealand dollar and 10 cents.

Trading Ideas:

• Bell Potter has slightly reduced the 12-month price target on Nickel Industries (ASX:NIC) from $1.47 to $1.43 and maintain a buy rating on the leading global nickel producer following the release of the company’s September quarter results. During the quarter, Nickel Industries reported nickel production was below BPe, cash costs were 10% above BPe, and production from the company’s Hengjaya mine nearly doubled. The reduction in the 12-month price target is due to lower FY24 earnings which are slightly offset by the establishment of an increased production profile at the Hengjaya Mine.
• And Bell Potter has reduced the 12-month price target on MedAdvisor (ASX:MDR) from 62 cps to 55cps and maintain a buy rating on the healthcare tech company following the release of the company’s Q1 results which were softer than expected but not worth the considerable sell-off experienced on the day of the results being released.