Between the Bells

Wall Street closed lower across the board on Friday as investors assessed the August jobs report which was released on Friday morning. The S&P500 fell 1.73% to post its worst week since 2023 with a 4.3% decline over the 5-trading days, while the Nasdaq tumbled 2.55% on Friday and the Dow Jones ended the day down 1.01%. The jobs data out for August on Friday indicated non-farm payrolls rose by 142,000 compared to economists’ expectations of 161,000, but the unemployment rate fell to 4.2%, painting a mixed picture about the strength of the US jobs market. Investors took the weaker-than-expected reading in non-farm payrolls as a signal of economic weakness and as a result sold out of equities on Friday.

Over in Europe, markets closed Friday’s session lower in the worst week since the early August slump as the US jobs report clouded investor sentiment around global economic stability. The STOXX600 fell 1.15%, Germany’s DAX lost 1.48%, the French CAC fell 1.07% and, in the UK, the FTSE100 ended Friday’s session down 0.73%.

Across the Asia region on Friday the sea of red mostly extended across the region as key economic data weighed on investor sentiment including Japan’s household spending data for July rising just 0.1% on the previous year, compared to the 1.2% rise economists were expecting. Japan’s Nikkei fell 0.72%, South Korea’s Kospi Index lost 1.21% and China’s CSI index ended the day down 0.81%.

Locally on Friday the ASX200 rose 0.4% with the bankers driving the positive close to offset some of the heavy losses experienced this week. Energy stocks tumbled over 3% on Friday, extended the week’s losses amid the volatile price of oil, while consumer discretionary stocks rallied 1% on the final trading session of last week.

Materials stocks came under pressure on Friday after China’s steel advisory group advised mills to be cautious on boosting outlook on fears of subdued demand and subdued pricing. Therefore, impacting iron ore prices late last week and the local miners were sold off as a result.

Strike Energy soared almost 9% on Friday in the days after the gas exploration and development company released plans to expand the Eastern Perth Basin with major discoveries at its Erregulla Deep-1 exploration well.

What to watch today:

• Ahead of the first trading session of the new trading week, the SPI futures are expecting the ASX to open the day down 1.28% following the Wall St slide last week.
• On the commodities front this morning, oil is trading 0.80% higher at US$68.20/barrel, gold is up 0.41% at US$2497/ounce and iron ore is up 0.34% at US$91.61/tonne.
• AU$1.00 is buying US$0.66 cents, 50.79 British Pence, 94.86 Japanese Yen, and NZ$1.08.

Trading Idea:

• Bell Potter has increased the 12-month price target on GrainCorp (ASX:GNC) from $9.90 to $10.20 and maintain the buy rating following the release of the ABARE September 2024 east coast winter crop forecast reflecting a 6% upgrade relative to the record June 2024 estimate to 28.8million tonnes. The consensus EBITDA FY25 expectations for GNC of $320m imply an outcome consistent with GNC’s through-the-cycle EBITDA projection, which appear conservative especially if the basis trade emerges over harvest which Bell Potter would expect to occur on a winter crop of this magnitude.

The Australian market has just weathered a turbulent reporting season for FY24, with many companies struggling under the weight of rising interest rates and inflationary pressures. Despite a handful of standouts, the overall outlook for FY25 is cautiously pessimistic. As we dive deeper into the key takeaways and predictions for the coming year, it's clear that businesses will need to adapt to a more challenging economic landscape.

In this week’s wrap, Grady covers:

• (0:46): how weakening commodity prices influenced the resources sector
• (1:37): why dividends were on the chopping block
• (3:08): how retailers performed this August
• (4:36): how the ASX200 performed this week
• (5:19): the most traded stocks by Bell Direct clients
• (5:45): economic news items to watch out for.

Wall St closed lower overnight as the S&P 500 and the Nasdaq fell for the second straight session to start September. The S&P 500 fell 0.16%, the tech-heavy Nasdaq ended the day 0.3% lower and the Dow Jones had a slight rise of 0.09%.

Over in Europe, markets closed lower on Wednesday’s trading session following losses on Wall St. The STOXX600 closed 1% lower with most sectors closing in the red. Losses were led by technology stocks which saw a 3.2% decline, whilst household goods also fell 2%. Germany’s DAX fell 0.83%, the French CAC closed nearly 1% in the red and over in the UK the FTSE100 dropped 0.35%.

Locally yesterday, the ASX200 closed 1.88% lower will all major sectors ending Wednesday’s trading session lower. Losses were led by the materials and energy sectors which fell 3.03% and 2.99% respectively.

What to watch today:

• The Australian share market is set to open slightly higher, with the SPI futures suggesting a rise 0f 0.03% at market open this morning.
• On the commodity front this morning,
   
  • Oil is trading 1.87% lower at US$68.90/barrel following concern from investors over future demand for oil. 
  • Gold is trading 0.09% higher at US$2495/ounce and iron ore is trading 1.87% higher at US$100.55/tonne.

Trading Idea:

• Bell Potter maintains a speculative buy rating on Curvebeam (ASX:CVB) which is a healthcare equipment and services company which combines market leading point-of-care diagnostic beam CT imaging solutions with Artificial Intelligence. Bell Potter’s valuation of $0.26, implies a 40.5% share price growth of the current share price of $0.185, hence the speculative buy rating is recommended.

Well, the Australian market closed yesterday’s session slightly lower, as consumer and mining stocks weighed on the ASX200, ahead of Australia’s GDP reading for Q2 out later this morning. Economists are expecting 0.3% growth, from 0.1% reported in Q1. The market may see a strong investor reaction if reports are below expectations, as the high-interest rate environment continues to weigh on the economy. Woolworths (ASX:WOW), Coles (ASX:COL) and Endeavour (ASX:EDV) shares were among the hardest hit yesterday, as each of the consumer staples company’s went ex-dividend.

US equities tumbled in the red overnight for the first US trading session of September. Technology heavyweights struggled to rally into the new month and fresh economic data came in weaker-than-expected. The market has seemed to be data dependent recently, as the Nasdaq declined 3.6%, the S&P500 down 2% and the Dow Jones closed 600 points or 1.5% lower. 

European markets also closed in the red, with the STOXX600 down 0.97%. 

What to watch today:

• Following US markets overnight, the SPI futures are suggesting that Australian market will drop 1.17% at the open this morning. 
• In commodities, 
  • Crude oil is down 5% to US$70.36 per barrel, the lowest since the start of January as muted demand magnified the impact of relatively ample supply. Plus, new data out in China aggravated concerns that the economic growth from one of the largest oil consumers in the world, is unlikely to bounce back this year, after factory demand dropped more than expected in August. So keep watch of energy producers today, including Beach Energy (ASX:BPT) and Woodside Energy (ASX:WDS). 
  • Gold is trading slightly lower as the US dollar added pressure. 
  • And iron ore is trading in the green after weighing down on our large mining stocks yesterday, as weakness in China’s economic recovery and steel industry sparked yesterday’s iron ore price to drop below US$100 per tonne. BHP Group (ASX:BHP), Champion Iron (ASC:CIA) and Fortescue (ASX:FMG) were all lower. 
    • On that note, Fortescue is also set to go ex-dividend today, which may see FMG’s share price fall, as investors take their profits. 
• And the Australian dollar is buying US$67.36, 97.92 Japanese Yen, 51.32 British Pence and NZ$1.09.

Trading Ideas:

• Bell Potter initiated coverage on Northern Star Resources (ASX:NST), the largest solely ASX listed gold mining company. Bell Potter initiate coverage with a Buy recommendation in accordance to their ratings structure. Their 12-month price target is $17.50 and that their current share price of $14.87, this implies 17.7% share price growth in a year. 
• And Trading Central have identified a bearish signal on Goodman Group (ASX:GMG) indicating that the stock price may fall from the close of $33.07 to the range of $29.20 to $30.00 over 7 days, according to the standard principles of technical analysis. 

Due to the Labour Day holiday over in the US, markets were closed in the region, however over in Europe, markets ended the day flat to start September. The STOXX600 closed 0.04% lower, with losses led by retail stocks which dropped 0.77%, whilst telecoms stocks added 0.78%. Germany’s DAX added 0.13%, the French CAC gained 0.2% and over in the UK the FTSE100 fell 0.15%.

Locally yesterday, the ASX200 rose 0.22% by market close yesterday. Gains were led by the financial and energy sectors which gained 1.14% and 1.1% respectively. This was offset by the materials sector which fell 1.11% by end of trade on Monday.

What to watch today:

• The Australian share market is set to open slightly higher, with the SPI futures predicting a rise of 0.05% at market open this morning.
• On the commodities front this morning,
   
  • Oil is trading 0.7% higher at 74 US dollars and 6 cents a barrel, gold is trading 0.13% lower at 2499 US dollars an ounce and iron ore is trading 0.07% higher at 98 US dollars and 60 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Resource Development Group (ASX:RDG) and has a 12-month price target of $0.034. The buy rating is maintained by Bell Potter following the release of FY24 results in which RDG reported a revenue of $136m, up 145% year-on-year and an underlying EBITDA of $28.4m which was up 53% year-on-year. As well as this, RDG continues to focus on implementing modifications and upgrade works to the Lucky Bay plant to achieve nameplate capacity, with an upgraded New Constant Density tank commissioned during July 2024, yielding improved plant stability and greater heavy mineral recovery and production. An expanded attritioning circuit was also installed which will improve product quality, hence the buy rating is maintained.
• Trading Central has identified a bullish signal in Elders Ltd (ASX:ELD), indicating that the stock price may rise from the close of $9.37 to the range of $10.05-$10.20, on a pattern formed over 22 days, according to the standard principles of technical analysis.

Wall St closed higher on Friday to end what was a volatile month, with the Dow Jones posting a fresh record high. The S&P 500 gained over 1%, the tech-heavy Nasdaq jumped 1.13% and the Dow Jones ended the trading day over half a percent higher. US inflation data was released on Friday, with the personal consumption expenditure price index rising 0.2% in July, in line with economist expectations.

Over in Europe, markets closed lower as investors consumed the latest inflation data from around the world. The STOXX 600 closed 0.09% higher on Friday, Germany’s DAX fell 0.03%, the French CAC dropped 0.13% and over in the UK the FTSE100 ended Friday’s trading session 0.04% lower.

Locally on Friday, the ASX200 gained 0.58% with the majority of sectors finishing in the green. Gains were led by the industrial and energy sectors which gained 1.65% and 1.27% respectively. This was offset by the consumer discretionary sector which fell 0.46% by the closing bell.

What to watch today:

• The Australian share market is set to open lower, with the SPI futures suggesting a fall of 0.22% at market open this morning.
• On the commodity front this morning,         
  • Oil is trading 3.11% lower at 73 US dollars and 55 cents a barrel as investors factored in the likelihood of a rise in OPEC+ supply starting in October.
  • Gold is trading 0.65% lower at 2503 US dollars an ounce and iron ore is trading 0.07% higher at 98 US dollars and 70 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Aeris Resources (ASX:AIS) and has a 12-monht price target of $0.27. The buy rating is maintained by Bell Potter following the release of FY24 results in which EBITDA came in ahead of Bell Potter forecasts and a revenue of $540m was recorded. AIS is a copper dominant producer with all its assets in Australia. Its near-term outlook is highly leveraged to the copper price and increasing grades and production at the Tritton copper mine. Successful delivery offers significant upside and a strategically attractive asset in Tritton, hence the buy rating is maintained.
• Trading Central has identified a bullish signal in IGO Ltd (ASX:IGO), indicating that the stock price may rise form the close of $5.55 to the range of $5.75-$5.83, on a pattern formed over 20 days, according to the standard principles of technical analysis.

ASX heavyweights released results this week that painted a mixed picture about the outlook for FY25. Over August, 275 companies released results, with 85 beating expectations. From soaring profits to unexpected setbacks, join Grady as she delves into the details and analyses the implications for investors.

In this week’s wrap, Grady covers:

• (0:37): how Wesfarmers shares declined following strong results
• (2:00): why Qantas’ share price ran into turbulence
• (2:51): what caused mining giant Mineral Resources to tumble
• (4:52): how the market performed this week so far
• (5:39): the most traded stocks & ETFs by Bell Direct clients
• (6:06): economic data to watch out for.

Wall St closed mixed on Thursday as the Dow Jones closed at fresh highs overnight. The tech-heavy Nasdaq fell 0.23%, the S&P500 remained flat and the Dow Jones gained 0.59% to end the trading day.

Over in Europe, markets closed higher as investors reacted to interest rate decisions across Europe. The STOXX600 closed 0-.74% higher with all major sectors ending Thursday’s trading session in the green. Gains were led by tech stocks which rose 2.05%, following the announcement of quarterly results from AI giant, Nvidia. Germany’s DAX rose 0.69%, the French CAC gained 0.84% and over in the UK, the FTSE100 rallied 0.43% by the closing bell.

Locally yesterday, the ASX200 ended Thursday’s trading session 0.26% higher, despite the majority of sectors closing in the red. The two major sectors which did end the day positive were the financial and real estate sectors which gained 1.46% and 1.19% respectively. This was offset by the information technology sector which fell 1.88%.

What to watch today:

• The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.64% by market open this morning.
• On the commodities front this morning,
   
  • Oil is trading 1.65% higher at 75 US dollars and 75 cents a barrel, gold is trading over half a percent higher at 2521 US dollars an ounce and iron ore is trading 0.06% higher at 98 US dollars and 51 cents a tonne.

Trading Idea:

• Bell Potter maintains a speculative buy rating on Matrix Composites & Engineering (ASX:MCE) and has increased its 12-month price target to $0.44. The speculative buy rating is maintained by Bell Potter following the release of FY24 results in which reported revenue was up 80% year-on-year, in line with guidance and forecast. MCE is also exposed to a protracted capital expenditure up-cycle across the global off-shore energy sector and is leveraged to growing activity across the global offshore floating wind sector, providing a medium-term earnings catalyst.

Wall Street closed lower at the end of the midweek session as investors braced for the release of Nvidia’s Q2 earnings results that were released after the closing bell. The Dow Jones fell 0.39% on Wednesday, the S&P500 lost 0.6% and the tech-heavy Nasdaq ended the day down 1.12%. Nvidia’s results have fast become one of the most important pieces of data the market analyses for outlook on growth in the AI revolution. For the second quarter, Nvidia reported record quarterly revenue of US$30bn, up 15% on Q1 and a rise of 122% from a year ago, record quarterly data centre revenue of $26.3bn was also reported which is a rise of 16% on Q1 and 154% from a year ago. In after-hours trade, Nvidia shares are down over 6.5% despite the company posting outlook for revenue growth to US$32.5bn in Q3.

Over in Europe on Wednesday, markets closed mostly higher in the region on strong corporate earnings results out in the region. The STOXX 600 rose 0.33%, Germany’s DAX added 0.54%, the French CAC rose 0.16%, and in the UK, the FTSE100 ended the day down just 0.02%.

Across the Asia region on Wednesday markets closed mixed as investors digested key economic data out in the region. Hong Kong’s Hang Seng fell 1.05% on Wednesday, China’s CSI index lost 0.57%, Japan’s Nikkei rose 0.22% and South Korea’s Kospi Index closed flat on Wednesday.

Locally on Wednesday, the ASX200 closed flat as investors responded to corporate earnings results and the release of key inflation data that came in slightly hotter-than-expected. Australia’s monthly CPI indicator rose 3.5% in the 12-months to July 2024, down from 3.8% in June, but above the 3.4% economists were expecting. The greatest contributors to the 3.5% rise for July were housing up 4%, food and non-alcoholic beverages up 3.8%, alcohol and tobacco up 7.2% and transport up 3.4%. The nation’s core inflation which strips out volatile metrics including fuel, fruit and holiday travel, was 3.7% for the year to July, down from 4% in June.

Woolworths shares rallied 3.4% on Wednesday after the supermarket giant reported strong FY24 results including a special dividend of 40cps.

Travel agency group Flight Centre also rallied nearly 2% yesterday after releasing FY24 results outlining airfares moderated and travel demand remained strong over the last financial year, with total transaction value topping $23.7bn for FY24, which was $1.8 bn more than FY23.

Fortescue shares fell 2% yesterday despite the mining giant reporting an 18% jump in net profit for FY24 to $8.4bn. Investors likely sold out due to the near $1bn loss reported for Fortescue’s green energy division.

What to watch today:

• Ahead of the local trading session here in Australia, the SPI futures are anticipating the ASX to open the day down 0.27% tracking turbulence on Wall St overnight.
• On the commodities front this morning, oil is trading 1.44% lower at US$74.45/barrel, gold is down 0.7% at US$2508/ounce and iron ore is up 0.15% at US$98.45/tonne.
• AU$1.00 is buying US$0.67, 97.94 Japanese Yen, 51.36 British Pence and NZ$1.09 cents.

Trading Ideas:

• Bell Potter has increased the rating on Fortescue (ASX:FMG) from a sell to a hold and have raised the 12-month price target on the mining giant from $17.41 to $17.58 following the release of the company’s FY24 results with the belief subdued outlook in priced into the current market price. FY24 results were reported broadly in-line with market expectations with moderately lower NPAT due to higher tax and D&A charges. The analyst believes the results in FY24 were solid but subdued iron ore outlook and interest rate differentials pointing to a stronger AUD to USD exchange rate, will pressure build on FMG’s margins.
• And Trading Central has identified a bullish signal on NRW Holdings (ASX:NWH) following the formation of a pattern over a period of 8-days which is roughly the same amount of time the

Over in the US, markets closed higher as investors await further key corporate earnings out later this week. The Dow Jones rose by 0.02%, the S&P500 rallied 0.16% and the tech-heavy Nasdaq ended the day 0.16% in the green. 

Investors are eagerly awaiting the release of results from AI and chip making giant Nvidia, which will come out after the closing bell on Wednesday, to gain insight into the growth potential for the company and broader tech sector.

In Europe overnight, markets closed mostly higher as investors continue to weigh the impact of geopolitical tensions against corporate earnings and commentary. The STOXX600 rose 0.23% led by travel stocks on Tuesday while Germany’s DAX added 0.35%, the French CAC fell 0.32% and, in the UK, the FTSE100 ended the day up 0.21%.

The local market rally ended on Tuesday with the key index falling 0.16% at the closing bell as geopolitical tensions and corporate results weighed on investor sentiment. Tech and banking stocks took the biggest hit yesterday while energy producers ended the day higher on the rising price of oil.

What to watch today:

• The Australian share market is set to open lower, with the SPI futures suggesting a fall of 0.35% at market open this morning.
• On the commodities front this morning,
   
  • Oil is trading 2.12% lower at 75 US dollars and 77 cents a barrel, gold is up 0.37% to 2524 US dollars an ounce and iron ore is trading 0.26% higher at 98 US dollars and 30 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Propel Funeral Partners (ASX:PFP) and has increased its 12-month price target to $6.40. The buy rating is maintained by Bell Potter following the release of FY24 results which saw revenue increase by 24.5% to $209m, supported by 20% growth in funerals conducted and a 4% growth in average revenue per funeral. PFP also recorded an EBITDA of $55.4m at a 26.5% margin which Bell Potter has seen as a healthy outcome, hence the buy rating is maintained.
• Trading Central has identified a bullish signal in Fortescue Limited (ASX:FMG), indicating that the stock price may rise from the close of $18.63, to the range of $20.10-$20.50 on a pattern formed over 21 days, according to the standard principles of technical analysis.