Between the Bells

The ASX200 index rose 1.72% this week so far (Mon – Thurs), boosted by a strong 4% gain in the financial sector. Economic data, US earnings, and commodity price volatility influenced market movements.

In this week’s wrap, Grady covers: 

• (0:20): the highlights in US earnings results released this week
• (2:03): key economic data out in China 
• (3:46): the best performers on the ASX200 this week
• (4:42): the most traded stocks & ETFs by Bell Direct clients 
• (5:10): economic news items to watch out for next week. 

Wall St closed higher overnight as the Dow Jones rose to a record close following a sell-off in its previous session, rising 0.79%. The S&P 500 rose by 0.47% and the tech-heavy Nasdaq jumped by 0.27%.

In terms of US stocks, Morgan Stanley gained 6.5% following strong third-quarter earnings which toppled Wall Street expectations.

Over in Europe, markets closed lower overnight with chips stocks and luxury goods leading losses following sales warnings. The STOXX600 fell 0.15% with half of the major sectors ending Wednesday’s trading session in negative territory. Germany’s Dax fell 0.27%, the French CAC lost 0.4% and over in the UK, the FTSE100 gained nearly 1% overnight.

Locally yesterday, the ASX200 fell by 0.4% with all but one major sector closing in the red. Losses were led by the information technology and utilities sectors which dropped 1.35% and 1.21% respectively. This was offset by the financial sector which gained 0.27% by the closing bell.

What to watch today:

• The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.72% at market open this morning.
• On the commodities front this morning,
  • Oil is trading 0.12% higher at 70 US dollars and 67 cents a barrel following continued uncertainty over the war in the Middle East.
  • Gold is trading half a percent higher at 2673 US dollars an ounce and iron ore is trading 0.45% lower at 106 US dollars and 63 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Catalyst Metals (ASX:CYL) and has a 12-month price target of $3.06. The 12-month price target of $4.30, indicates a share price growth of 40.5%, hence the buy rating is maintained.
• And Trading Central has identified a bullish signal in Kina Securities (ASX:KSL), indicating that the stock price may rise from the close of $1.04 to the range of $1.08-$1.10, on a pattern formed over 16 days, according to the standard principles of technical analysis.

Wall Streets’ green run ended on Tuesday with the major averages move away from record territory as investors digest some key Q3 earnings results. The Dow Jones fell 0.75%, the S&P500 lost 0.76%, and the tech-heavy Nasdaq fell 1.01%. UnitedHealth fell 8.1% after the company trimmed full-year earnings outlook, while Bank of America rallied 2% on better-than-expected results.

Citi shares fell over 4% on Tuesday even after the big bank beat Wall St expectations for Q3, and LVMH shares fell nearly 7% to their lowest level since October 2022 after the luxury fashion house posted disappointing results.

Over in Europe overnight, markets closed lower as investors responded to key earnings updates and monitored a sharp fall in oil prices. The STOXX 600 fell 0.7%, Germany’s DAX closed down 0.11%, the French CAC lost 1.05% and, in the UK, the FTSE100 ended the day down 0.52%.

Dutch semiconductor maker ASML tumbled over 15% after the company said in its earnings report that it expects net sale for 2025 to come in between 30 billion euros and 35 billion euros, at the lower half of the range it had previously provided.

Across the Asia region, markets closed mostly lower as China’s weak trade data weighed on investor sentiment in the region. China’s CSI index lost 2.66% on Tuesday after the nation’s September trade data showed exports rose 2.4% YoY and imports added just 0.3%, with both metrics sharply missing expectations. Hong Kong’s Hang Seng lost 3.67% on Tuesday, but Japan’s Nikkei rose 0.77%.

The local market extended this week’s rally into Tuesday’s session with a gain of 0.8% at the closing bell after hitting fresh intraday highs, buoyed by the banks with CBA rising 1.6%, Westpac adding 1.3%, ANZ rising 0.8% and NAB gaining 1.3%.

Tyro Payments tanked over 15% on Tuesday on news that the federal government of Australia is planning to crackdown on credit card surcharges by 2026, with the government even saying it will go as far as banning the practice to give consumers and small businesses a fair go. This move would impact Tyro Payments among other payment service providers that rely on such fees for earnings.

Hub24 rose 4.3% on Tuesday after posting record quarterly net inflows of $4bn announced in the company’s latest trading update while total funds under administration hit $113bn in the quarter.

What to watch today:

• Ahead of the midweek trading session here in Australia the SPI futures are anticipating the ASX to open the day down 0.38% on the back of Wall Street’s turbulence overnight.
• On the commodities front this morning, oil has tumbled 4.68% to trade at US$70.40/barrel, gold is up 0.55% at US$2663.90/ounce and iron ore is up 0.63% at US$107.11/tonne.
• The Aussie dollar has weakened overnight to buy US$0.67, 100.15 Japanese Yen, 51.27 British Pence and NZ$1.10.

Trading Ideas:

• Bell Potter has downgraded the rating on The a2 Milk Company (ASX:A2M) from a hold to a sell and have slightly reduced the 12-month price target on the company from $6.20 to $6.10 in-light of a recent share price gain on expectations of a rebound in demand in China. The analyst sees A2M trading at 17.5x FY25 expected EBITDA as not supported by any fundamental changes and sees better value elsewhere, especially given the rally puts A2M trading at a 51% premium to Dairy FMCG plays.
• And Trading Central has identified a bullish signal on Accent Group (ASX:AX1) following the formation of a pattern over a period of 38-days which is roughly the same amount of time the share price may rise from the close of $2.44 to the range of $2.82 to $2.90 according to standard principles of technical analysis.

Wall Street has extended on its record finish to trade higher yet again overnight. The Dow Jones jumped 0.47%, the S&P 500 gained 0.77% and the tech-heavy Nasdaq rose by 0.87%.

So far, this third quarter earnings season, the 30 companies on the S&P500 that have reported have beat earnings expectations by about 5% on average which is better than the 3% beat this time last quarter.

Over in Europe, markets closed higher following market rallies in Wall St overnight. The STOXX600 gained half a percent by the end of the trading day with tech stocks jumping 1.7%, whilst travel and leisure stocks fell 0.8%. Germany’s DAX rose 0.69%, the French CAC gained 0.32% and over in the UK the FTSE100 ended Monday’s trading session 0.47% in the green.

Locally yesterday, the ASX200 rose 0.47% despite the majority of sectors finishing in negative territory. Gains were led by the material and health sectors which rose by 1.3% and 0.89% respectively. This was offset by the energy sector which fell by 1.26%.

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,
   
  • At the time of recording, oil is trading 4.5% lower to 72 US dollars and 17 cents a barrel following concerns over China’s weakening economy after China’s Finance Ministry briefing on Saturday, which lacked new major financial stimulus. 
  • Gold is trading 0.39% lower at 2646 US dollars an ounce and iron ore is trading 0.6% higher at 106 US dollars and 44 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Bega Cheese (ASX:BGA) and has a current share price of $5.25. The 12-month price target of $6.45 represents a share price growth of 22.9% over the next 12-months, hence the buy rating is maintained.
• And Trading Central has identified a bullish signal on Perentin Ltd (ASX:PRN), indicating that the stock price may rise from the close of $1.05 to the range of $1.18-$1.22, on a pattern formed over 71 days, according to the standard principles of technical analysis.

Wall Street closed in record territory on Friday as the big banks had a very strong start to the third-quarter earnings season. The Dow Jones added 0.97% to a fresh record 42,863.86 on Friday while the S&P500 gained 0.65% to a fresh record 5815.03 and the tech-heavy Nasdaq rose 0.33%, just 2% below its record high.

JP Morgan Chase rose 4.4% after topping profit and revenue expectations for Q3 while Wells Fargo rose 5.6% on stronger-than-expected profits.

Over in Europe markets closed higher on Friday as investors assessed key UK growth figures and looked ahead to further key economic data out in the region soon. The STOXX 600 rose 0.53%, Germany’s DAX added 0.85%, the French CAC rose 0.48%, and, in the UK, the FTSE100 ended the day up 0.19%. The UK economy returned to GDP expansion in August with Britain’s GDP rising 0.2% in the month following flat readings in June and July.

Across the Asia region on Friday it was a mixed close as China’s stimulus-fuelled rally lost steam. China’s CSI index lost 2.77%, South Korea’s Kospi Index fell slightly despite the Bank of Korea cutting the benchmark interest rate by 25-basis points in the first rate cut since 2020. Japan’s Nikkei gained 0.57% on Friday and Hong Kong’s Hang Seng was close for a public holiday.

The ASX closed 0.1% lower on Friday as a broad sell off across 6 of the 11 sectors weighed on the key index.

Energy stocks rose on Friday on the oil price rebound – which has been the story of the last month with high volatility based on geopolitical tensions escalating and easing.

Capital raisings have been on the rise recently as the impacts of high interest rates and subdued demand finally hit company balance sheets. On Friday we saw Appen return to profitability but also announce a capital raise to expand into AI, while Dubber also announced a $25m capital raise to ‘accelerate sales momentum and execute a new sales strategy’.

Gold miners rallied on Friday due to the rising price of the precious commodity as demand for the safe-haven asset continues to rise.

What to watch today:

• Ahead of the first trading session this week the SPI futures are anticipating the ASX to open the new trading day up 0.56% on the back of Wall Street’s rally on Friday.
• On the commodities front this morning oil is trading 0.38% lower at US$75.56/barrel, gold is up 0.91% at US$2657/ounce, and iron ore is up 0.6% at US$106.44/tonne.
• AU$1.00 is buying US$0.67, 100.54 Japanese Yen, 51.63 British Pence and NZ$1.11.

Trading Ideas:

• Bell Potter has increased the rating on Catapult Group (ASX:CAT) from a hold to a buy and have raised the 12-month price target on the sports tracking software company from $2.35 to $2.75 ahead of the company’s first half results due out in a month’s time. The key focus for Bell Potter’s analyst in the upcoming results is the performance of the Tactics and Coaching division i.e. the video business from both a revenue and total contract value perspective.
• And Trading Central has identified a bullish signal on SG Fleet Group (ASX:SGF) following the formation of a pattern over a period of 23-days which is roughly the same amount of time the share price may rise from the close of $2.68 to the range of $2.81 to $2.85 according to standard principles of technical analysis.

Rio Tinto's acquisition of Arcadium Lithium has sent shockwaves through the lithium market. With its global reach and potential for supply deals with major carmakers, Rio's move suggests a renewed optimism about the future of lithium and the green energy transition.

In this week’s wrap, Grady covers:

• (0:14): how Rio’s deal sparked interest in lithium mining
• (1:37): why Rio is optimistic about the long-term fundamentals for lithium demand
• (3:03): the potential for increased interest in lithium mining
• (3:54): how the ASX200 performed this week so far
• (4:39): the most traded stocks & ETFs by Bell Direct clients
• (5:10): economic data to watch out for next week.

Wall Street rose for a second straight session on Wednesday to record territory as investors shook off geopolitical concerns and bought back into tech stocks. The Dow Jones rose 1.03% to a record close, as did the S&P500 ending the day up 0.71% also to a record close, and the tech-heavy Nasdaq added 0.6% at the closing bell. 

The driver of the rally in the US was the release of the Fed’s latest meeting minutes whereby majority of participants favoured reducing interest rates by more than 50 basis points.

Over in Europe overnight, markets closed higher ahead of key rate decisions out later this week and on easing oil prices. The STOXX 600 rose 0.66%, Germany’s DAX added 0.99%, the French CAC rose 0.52% and, in the UK, the FTSE100 ended the day up 0.65%.Across the Asia region on Wednesday it was a mixed session with China’s CSI index snapping a 10-day winning streak with a tumble of 7.05%, while Hong Kong’s Hang Seng fell 1.7%, but Japan’s Nikkei rose 0.87% and South Korea’s Kospi Index was closed for a holiday.

The Australian market closed 0.13% higher on Wednesday as a strong tech rally offset sharp declines among materials and energy stocks.

What to watch today:

• The local tech rally was on the back of Wall Street rising overnight back to near record territory. The materials sell off sparking investors to hit the sell-button on the big iron ore miners followed Beijing dampening hopes of more fiscal spending to aid China’s post-pandemic recovery efforts. 
• BHP (ASX:BHP) and Rio Tinto (ASX:RIO) fell 1.2% and 2.3% respectively on Wednesday.
• On the Rio Tinto story, the mining giant has become the first mining giant to snap up a large lithium company when it agreed to acquire Arcadium Lithium for US$6.7bn in an all-cash deal announced on Wednesday. While BHP is going hard at expanding into the copper space, Rio Tinto becomes the first major mining player to back the lithium space following years of depressed pricing for the once-loved green commodity.
• Over in New Zealand the RBNZ cut the cash rate by 50bps to 4.75% as inflation returned to the target 1-3%.
• Ahead of Thursday’s trading session on the ASX the SPI futures are anticipating the ASX to open the day up 0.4% tracking Wall Street’s rally overnight.
• On the commodities front this morning, oil is down 0.3% at US$73.36/barrel, gold is down 0.54% at US$2607/ounce and iron ore is down 5.42% at US$106.30/tonne.
• The Aussie Dollar is buying 67.31 US cents, 100.26 Japanese Yen, 51.36 British Pence, and 1 New Zealand dollar and 11 cents.

Trading Ideas:

• Bell Potter has downgraded the rating on GrainCorp (ASX:GNC) from a buy to a hold and have reduced the 12-month price target on the grain logistics and storage company on the back of analysing key drivers for FY25 including a frost event impacting East coast production and the narrowing of domestic oilseed pricing premiums. 
• Trading Central has identified a bullish signal on KMD Brands (ASX:KMD) following the formation of a pattern over a period of 27-days which is roughly the same amount of time the share price may rise from the close of 47cps to the range of 56 to 58cps according to standard principles of technical analysis.

Wall Street closed higher overnight as lowering oil prices takes the pressure off stocks. The Dow Jones rose by 0.3%, the S&P 500 gained 0.97% and the tech-heavy Nasdaq ended 1.45% higher by the closing bell.

Over in Europe, markets closed lower following eased stimulus talks coming out of China. The STOXX600 fell by 0.54% with all major sectors closing in the red, including mining stocks which dropped 4.47% and household goods which lost 1.47%. Germany’s DAX lowered by 0.2%, the French CAC fell 0.72% and over in the UK the FTSE100 ended Tuesday’s trading session 1.36% lower.

Locally on Tuesday the ASX200 fell 0.35% with BHP and Rio Tinto losing more than 2% each after China’s National Development and Reform Commission press conference was held without further material stimulus measures included.

What to watch today:

• The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.18% at market open this morning.
• On the commodities front this morning,
   
  • Oil is trading 4.37% lower at 73 US dollars and 76 cents a barrel as supply issues in the Middle East are yet to be impacted and investors have started to focus back towards Chinese demand 
• Gold is trading 0.84% lower at 2620 US dollars an ounce and iron ore is trading 3.26% higher at 112 US dollars and 39 cents a tonne.

Trading Ideas:

• Bell potter maintains a buy rating on Seven Group Holdings (ASX:SVW) and has a 12-month price target of $48.50. The buy rating is maintained by Bell Potter as SVW’s businesses and investments are market leaders in their respective industries, with scale, brand, and industry expertise underpinning commercial advantages that are hard to replicate by competitors. Bell Potter remains positive on the near-term outlook for mining production, engineering construction and transitional energy markets, hence the buy rating is maintained.
• And Trading Central has identified a bearish signal in IDP Education (ASX:IEL), indicating that the stock price may rise from the close of $15.04 to the range of $13.50-$13.80, on a pattern formed over 29 days, according to the standard principles of technical analysis.

Wall Street fell on Monday amid rising oil prices and escalating tensions in the Middle East. The Dow Jones fell 0.94%, the S&P500 fell 0.96% and the Nasdaq ended the day down 1.18%. The benchmark 10-year treasury yield rose 3 basis points to 4.01%, marking the first time that the yield has topped 4% since August.

US stocks failed to extend their rally from Friday following the release of a stronger-than-expected jobs report out in the region boosting confidence of a soft landing through economic stability while inflation eases and the Fed continues its rate cut plans.

Across European markets overnight, markets closed mostly higher in the region ahead of key economic data out throughout this week. The STOXX 600 rose 0.17%, Germany’s DAX fell 0.09%, the French CAC added almost half a percent and, in the UK, the FTSE100 ended the day up 0.28%.

Across the Asia region on Monday, markets closed higher ahead of three key rate decisions out of central banks in the region this week. Japan’s Nikkei led the gains with a near 2% rise while Hong Kong’s Hang Seng rose 1.6%, South Korea’s Kospi Index rose 1.58% and China’s CSI index remained closed for the Golden Week holiday.
 
The local market started the new trading week with a light trading session amid the Labour Day holiday in NSW, but shares still managed to end the day 0.7% higher, just 7 points shy of the latest record close set in September.

Investors fought to buy Arcadium Lithium shares yesterday sending the lithium miner’s share price soaring 46% after Rio Tinto confirmed it was in takeover talks with Arcadium. Rio Tinto shares fell 2.5% on Monday.

The Arcadium rally boosted fellow lithium miners like Liontown Resources which rose 18%, Sayona Mining which climbed 13% and Core Lithium which added 8.7% as investors see the big mining giant’s interest in lithium as a recovery outlook for the leading green commodity.

The recent rebound in the price of iron ore spilled into this week which boosted the big iron ore giants again on Monday with BHP and Fortescue adding 0.6% and 3% respectively at the end of Monday’s session. Speculations are circulating that further economic stimulus will be revealed out of China this week as the region puts in place material efforts and stimulus to reignite economic growth and expansion.

What to watch today:

• Ahead of Tuesday’s trading session locally, the SPI futures are anticipating the ASX to open the day down 0.05% tracking Wall Street’s losses overnight.
• On the commodities front this morning, oil has jumped 3.42% overnight to trade at US$76.92/barrel on escalating tensions and supply concerns out of the Middle East, gold is down 0.2% at US$2648/ounce, and iron ore is up 0.5% at US$108.84/tonne.
• The Aussie dollar has weakened against the greenback overnight to buy US$0.67 cents, 100.10 Japanese Yen, 51.86 British Pence and NZ$1.10.

Trading Ideas:

• Bell Potter has increased the 12-month price target on Light & Wonder (ASX:LNW) and maintain a buy rating on the leading global cross-platform games company after the analyst assessed the situation around the Dragon Train (DT) preliminary injunction whereby the US District Court for Nevada granted Aristocrat Leisure a preliminary injunction to Light & Wonder’s successful Dragon Train game preventing further installs of DT and sales globally. The upgrade in the price target by Bell Potter’s analyst is due to the company’s overall leading scale and cross-platform strategy producing a portfolio of high-performing games in both land and digital markets.
• And Trading Central has identified a bullish signal on Pepper Money (ASX:PPM) following the formation of a pattern over a period of 31-days which is roughly the same amount of time the share price may rise from the close of $1.40 to the range of $1.49 - $1.51 according to standard principles of technical analysis.

Markets this week saw volatility in commodity prices, particularly in oil, gold, and iron ore. The rising geopolitical tensions in the Middle East, combined with China’s economic stimulus measures, are driving up the prices of these commodities. While this presents opportunities for investors, it also poses risks due to the potential for price fluctuations.

In this week’s wrap, Grady covers:

• (1:29): how investors should approach investing in oil producers
• (2:04): why the gold rally continues to outshine the market
• (2:38): how China’s stimulus announcement moved the price of iron ore
• (4:13): the best performers on the ASX200
• (5:11): the most traded stocks & ETFs by Bell Direct clients this week
• (5:42): five economic news items to watch out for.