Between the Bells

Overnight, Wall St closed mixed as the Dow Jones ended the day at record highs despite the sell-off earlier in the month. The S&P 500 fell 0.32%, the tech-heavy Nasdaq lost 0.85% and the Dow Jones rose by 0.16% by market close.

Over in Europe, markets followed the US and closed mixed as investors react to rising tensions in the Middle East following strikes by both Israel and Hezbollah over the weekend. Germany’s DAX fell 0.09%, the French CAC gained 0.18% and over in the UK the FTSE100 ended Monday’s trading session nearly half a percent higher.

Locally yesterday, the ASX200 rallied 0.76% by market close. Gains were led by the communications services and financial sectors which rose 1.25% and 1.23% respectively. This was offset by the consumer staples sector which fell 0.85%.

What to watch today:

• The Australian share market is set to open slightly higher, with the SPI futures suggesting a rise of 0.05% by market open this morning.
• On the commodities front this morning,
   
  • Oil is trading 2.98% higher at 77 US dollars and 5 cents a barrel due to supply concerns following the rising tensions in the middle east. 
  • Gold is trading 0.28% higher at 2516 US dollars and ounce and iron ore is trading 0.14% lower at 98 US dollars and 5 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Genusplus Group (ASX:GNP) and has increased its 12-month price target to $2.70. The buy rating is maintained by Bell Potter following positive FY24 results in which GNP reported group revenue of $551m, up 24% year-on-year, with the beat driven by better than expected industrial serviced segment sales of $153m. Bell Potter continue to see GNP as a key small-cap investment opportunity to play the theme of increasing investment in renewable energy, battery energy storage and transmission infrastructure across Australia, hence the buy rating is maintained.
• And Trading Central has identified a bullish signal in TPG Telecom (ASX:TPG), indicating that the stock price may rise from the close of $4.65 to the range of $4.81-$4.85, on a pattern formed over 15 days, according to the standard principles of technical analysis.

Wall Street ended Friday’s session higher after Fed Chair Jerome Powell indicated rate cuts are on the horizon at his Jackson Hole Economic Symposium speech on Friday. The Dow Jones added 1.14% on Friday while the S&P500 rose 1.15% and the tech-heavy Nasdaq ended the day up 1.47%. Powell said ‘the time has come for policy to adjust’ which was music to all investor ears after over a year of an aggressively high interest rate strategy to tame inflation in the world’s largest economy.

Friday’s rally in the US boosted the major averages to gains for the week with the Dow adding 1.3%, the S&P500 rising 1.45% and the Nasdaq climbing 1.4%.

Uranium miners in the states rallied on Friday after Kazakhstan’s national uranium miner cut its production output for 2025 due to delays in ramping up production at some sites and limited access to sulfuric acid. This output decline places pressure on the global supply of uranium, which is growing in demand due to the global increase in nuclear power.

Positive rate cut sentiment out of the Fed boosted European markets on Friday as a lower US interest rate weakens the USD and increases the attractiveness of trade with Europe and other export-oriented countries. The STOXX 600 rose 0.5% while Germany’s DAX added 0.76%, the French CAC rose 0.7% and, in the UK, the FTSE100 ended the day up 0.48%.

Across the Asia region on Friday, markets closed mostly lower as investors awaited Fed Chair Jerome Powell’s speech of Jackson Hole on Friday. Japan’s Nikkei rose 0.4% as inflation came in at 2.8%, a flat reading on the prior month, while China’s CSI index rose 0.42%, Hong Kong’s Hang Seng lost 0.14% and South Korea’s Kospi Index lost 0.22%.

Locally on Friday the ASX200 ended the day down just 0.04% as the utilities and energy sectors weighed on market gains. For the week though, the ASX200 rose 0.66% to sit above 8000 points again for the first time since the early August mass-equity sell off.

What to watch today:

• Tech sector heavy weight WiseTech Global led the winning stocks for the week with a 28% climb which paved the foundations for the tech sector to soar over 8% last week. The WTC rally was on the back of strong FY24 results and growth momentum expected to continue into FY25.
• Telix Pharmaceuticals shares fell 9% on Friday despite the radiopharmaceuticals company posting very strong first half results. For the first half, Telix reported total revenue rose 65% to $364m, gross margin increased to 66% from 63%, the company reported NPAT of $29.7m up from a loss of $14.3m and Telix reaffirmed its guidance for FY24.
• Ahead of the first local trading session of the last week for August, the SPI futures are anticipating the ASX to open the day up 0.51% on the back of the Fed’s rate cut outlook boosting global sentiment late last week.
• On the commodities front this morning, oil is trading 2.5% higher at US$74.83/barrel, gold is up 0.9% at US$2509/ounce, and iron ore is down 0.14% at US$98.05/tonne.
• The Aussie dollar has strengthened to buy 67.97 US cents, 98.26 Japanese Yen, 51.21 British Pence and 1 New Zealand dollar and 9 cents.

Trading Ideas:

• Bell Potter has maintained a buy rating on Rural Funds Group (ASX:RFF) and has raised the 12-month price target on the agricultural property management company from $2.40 to $2.50 following the release of RFF’s FY24 results. For the last financial year, RFF reported AFFO above Bell Potter’s forecasts, 18% revenue growth and strong operating cash flows. The analysts also noted material improvement in the profitability indicators in recent months including cattle, almond and macadamia prices rallying off lows in recent times, with RFF also having a history of delivering net asset value growth through investment, with the next macadamia pillar.
• Trading Central has identified a bullish signal on Nick Scali (ASX:NCK) following the formati

Reporting Season is in full swing, with 93 companies reporting so far displaying some interesting trends. Retailers like Super Retail Group and Universal Store showcased resilience despite the tough economic conditions, delivering solid FY24 results and strong starts to FY25. Meanwhile the tech sector made waves in the past week with WiseTech Global surging 28% following strong FY24 results.

• (0:54): resilience displayed by Super Retail Group in FY24
• (2:10): Universal’s impressive results despite the high-cost environment of FY24
• (3:46): the strong FY25 outlook for WiseTech Global
• (6:51): how the ASX200 performed this week so far
• (7:24): the most traded stocks & ETFs by Bell Direct clients
• (8:00): economic news to watch out for next week.

The likelihood of a rate cut out of the Fed in September sent Wall Street back into rally mode overnight as investors digested the positive rate outlook in the Fed’s latest FOMC meeting minutes. The S&P 500 rose 0.42% on Wednesday, while the Nasdaq added 0.57%, and the Dow Jones ended the day up 0.14%. Wall Street now awaits further indication of rate cuts out of Fed Chair Jerome

Powell at his Jackson Hole Economic Symposium speech on Friday. US retail giant Target jumped 11% on Wednesday after reporting Q2 earnings that exceeded Wall Street estimates while department store giant Macy’s tumbled 13% after lowering its full year sales forecast.

Over in Europe on Wednesday, markets closed higher on positive sentiment out of the U.S. and ahead of flash PMI figures out for the eurozone on Thursday. The STOXX 600 rose 0.32% on Wednesday, Germany’s DAX added 0.5%, the French CAC gained 0.52%, and, in the UK, the FTSE100 closed the midweek session up 0.12%.

Across the Asia region on Wednesday, markets were mostly lower on weaker-than-expected economic data out in the region. Japan’s Nikkei fell 0.3% after Japan’s trade balance data for July indicated higher exports than imports, imports exceeded expectations and exports fell short of economists’ forecasts. Hong Kong’s Hang Seng fell 0.82% on Wednesday, China’s CSI index lost 0.33% and South Korea’s Kospi index ended the day up 0.17%.

Locally on Wednesday, the ASX200 reversed losses in afternoon trade as a 5% rally for tech stocks and a 1.72% gain among mining stocks offset losses among energy, REIT and financial stocks.

Wisetech global did most of the heavy lifting in the tech-sector’s near 5% rally as the logistics software company soared over 18% on FY24 results including total revenue increasing 15% organically on FY23 to $1.041bn, CargoWise revenue lifting 19% organically to $880.30m, underlying NPAT rising 15% on FY23 to $283.5m, and the final dividend increased 10% to 9.2cps. WiseTech’s results were driven by its recent aggressive acquisition strategy flowing through to improved financial results.

What to watch today:

• Ahead of Thursday’s trading session the SPI futures are anticipating the ASX to open the day up 0.35% tracking global gains overnight.
• Australian property development company Charter Hall also rocketed over 15.5% on Wednesday after releasing stronger-than-expected FY24 results including operating earnings of $358.7, with operating EPS post-tax of 75.8cps, FY24 statutory loss of $222.1m and distributions to the value of 45.1cps. Investors likely rallied around the REIT stocks after it issued guidance for FY25 with the expectation of FY25 EPS to grow to approximately 79cps, with a 6% increase in distributions.
• On the commodities front this morning, oil is trading 1.7% lower at US$71.92/barrel, gold is up just 0.02% at US$2513/ounce, and iron ore is down 0.11% at US$97.99/tonne.
• The Aussie dollar is buying US$0.67 cents, 97.90 Japanese Yen, 51.53 British Pence, and NZ$1.09.

Trading Ideas:

• Bell Potter has increased the 12-month price target on Cedar Woods (ASX:CWP) from $5.75 to $6.50 and maintain a buy rating on the real estate development company following FY24 results coming in as a strong beat including EPS of 49.2cps which beat Bell Potter expectations by 7.4% and the company guided to NPAT growth of 10% for FY25.
• Trading Central has identified a bullish signal on Hansen Technologies (ASX:HSN) following the formation of a pattern over a period of 54-days which is roughly the same amount of time the share price may rise from the close of $4.68 to the range of $5.15 to $5.25 according to standard principles of technical analysis.

Wall Street’s 8-day winning streak ended overnight as investors took a breather from the comeback rally after the early August mass market sell-off. The Dow Jones fell 0.15% on Tuesday, the S&P500 lost 0.2% and the tech-heavy Nasdaq ended the day down 0.33%. This week, investors are preparing for the Federal Reserve’s annual Jackson Hole Economic Symposium where Fed Chair, Jerome Powell, will speak on Friday. Investors are also likely taking a breather from the recent equities rally ahead of the US Fed’s latest FOMC meeting minutes out on Wednesday US time before assessing their next moves in line with the rate outlook from the Fed at the last rate-decision meeting.

Over in Europe on Tuesday, markets closed lower on Tuesday as economic uncertainty weighed on investor sentiment. The STOXX 600 fell 0.46% with all-but the automotive sector ending the day in the red, while Germany’s DAX lost 0.35% on Tuesday, the French CAC fell 0.22% and, in the UK, the FTSE100 ended the day down 1%. Germany’s producer price index fell 0.8% YoY in July, while inflation in the euro zone was 2.6% in July, up from 2.5% in June with both datasets weighing on investor sentiment on Tuesday.

Across Asia on Tuesday, markets closed mostly higher tracking Wall Street’s strength on Monday and after China’s loan prime rates were held, in-line with expectations. Japan’s Nikkei led the gains with a 1.8% rise, while South Korea’s Kospi index rose 0.83%, and China’s CSI Index added 0.72%, while Hong Kong’s Hang Seng fell 0.5% on Tuesday.

Locally on Tuesday, the ASX200 rose for an 8th straight session on Tuesday, closing the day up 0.2% above 8000 points for the first time since the early-August mass sell-off.

What to watch today:

• The RBA meeting minutes out yesterday revealed the RBA considered raising Australia’s cash rate from the 12-year high 4.35% in August in a bid to return inflation to the target 2-3% range in a more reasonable timeframe. The RBA also didn’t rule out any further rate hikes which saw market gains ease in afternoon trade from the morning rally.
• The hawkish tone out of the RBA meeting minutes weighed on real estate stocks yesterday with the sector posting a 1.55% decline while a tech and materials rally more than offset the weakness among real estate stocks.
• Baby Bunting shares soared 8.85% on Tuesday after the baby retailer released FY24 results. Investors overlooked the decline in sales, profit and increase in net debt to buy into the stock on outlook for improved outlook in FY25 amid cost cutting measures and pro forma NPAT expectations of between $9.5m and $12.5m.
   Plumbing supplies giant Reliance Worldwide also rallied just shy of 9% yesterday on the release of FY24 results including net sales growth of 0.2%. Investors bought in also on strong outlook for FY25 in anticipation for this company to form part of the group of entities that will benefit from an easing interest rate environment.
   On the commodities front this morning, oil is trading 0.41% lower at US$73.36/barrel, gold is up 0.43% at US$2514/ounce and iron ore is up 0.3% at US$98.10/tonne.
• The Aussie dollar has strengthened overnight to buy 67.39 US cents, 98.11 Japanese Yen, 51.79 British Pence and 1 New Zealand dollar and 10 cents.
• Ahead of the midweek trading session on the local bourse, the SPI futures are anticipating the ASX to open the day down 0.55% tracking the global market sell-off overnight.

 Trading Ideas:

• Bell Potter has decreased the 12-month price target on Mader Group (ASX:MAD) from $7.60 to $6.80 and maintain a buy rating on the leading provider of specialised contract labour for maintenance of heavy mobile equipment in the resources and civil industries, following the release of Mader’s FY24 results. Near-term outlook supported by mid-cycle fleet renewal in Australia and North America, however, the analyst is cautious that chal

Wall St closed higher overnight as the Nasdaq rallies for its 8th straight session. The Dow Jones closed over half a percent higher, the S&P 500 closed 1% in the green and the tech-heavy Nasdaq rallied 1.39% overnight.

Over in Europe, markets closed higher on Monday following the global market rally last week. The STOXX600 ended the trading session 0.64% higher with all sector ending in positive territory. Gains were led by mining and retail stocks, up 1.98% and 1.57% respectively. Germany’s DAX closed over half a percent in the green, the French CAC added 0.7% and over in the UK the FTSE100 gained 0.55%.

Locally yesterday, the ASX200 ended Monday’s trading session 0.12% higher. Gains were led by the utilities and financial sectors which gained 1.67%and 0.82% respectively. This was offset by the consumer staples sector which fell 0.83% 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 0.45% at market open this morning.
• On the commodity front this morning,
  • Oil is trading 4.75% lower at 73 US dollars a barrel as ongoing cease-fire talks in Gaza could ease geopolitical tensions, hence reduce the risk premium on oil. 
  • Gold is trading 0.16% lower at 2503 US dollars an ounce and iron ore is trading 0.75% lower at 97 US dollars and 81 cents a tonne.

Trading Idea:

•  Bell Potter maintains a buy rating on Adacel Technologies (ASX:ADA) and has a 12-month price target of $0.65. The buy rating is maintained by Bell Potter following the release of results where normalised FY24 EBITDA of $1.1m US dollars was better than Bell Potter’s forecast of $900,000 US dollars and the downgraded guidance given in July. There was a reduction in the earnings forecast which has caused a 13% reduction in the price target, however it is still a 15% premium to the share price, hence the buy rating is maintained.

Wall Street closed higher on Friday to end the best week across the major averages in 2024, posting a major comeback from the mass exodus of equities that started August on a very sour note. The Nasdaq rose 0.21% on Friday and 5.2% for the week, the S&P500 added 0.2% on Friday and 3.9% for the week and the Dow Jones rose 0.24% on Friday and 2.9% for the week. Economic data released late last week was the catalyst for Friday’s rally with retail sales data out on Thursday coming in higher than expected while weekly jobless claims fell for a second week in a row. The mega cap rebound peaked last week with Nvidia gaining 18% over the 5-trading days while Apple and Microsoft rose 4% and 3% respectively for the week.

Over in Europe markets mostly ended the week on a positive note with the STOXX 600 index adding 0.31% on Friday and a record weekly gain of 2.4%. Germany’s DAX rose 0.77% on Friday, the French CAC added 0.35% and, in the UK, the FTSE100 ended the day down 0.43% following the release of UK inflation data showing an uptick to 2.2% in July and retail sales coming in at a rise of 0.5% for July from a 0.9% decline in June.

Across the Asia markets on Friday, Japan’s Nikkei posted its best week in 4-years with a rise of 3.64% on Friday while the index was up 8.67% over the week. South Korea’s Kospi Index rose 1.99% on Friday, Hong Kong’s Hang Seng added 1.81% and China’s CSI index ended the day up 0.11%.

Locally on Friday, the ASX200 rose 1.34% despite RBA governor Michele Bullock saying thinking about rate cuts in Australia is still too premature as the US prepares for rate cuts likely in September. For the week, the ASX200 posted a gain of 2.3% as corporate earnings results this reporting season are broadly in-line with expectations.

A2 Milk shares rose 5% on Friday after the infant formula company settled its dispute with NZ-based dairy processing company Synlait Milk.

Magellan Financial shares also rose 3% on Friday a day after the fund manager released full year results including a 31% jump in statutory net profit after tax and a final dividend declared of 28.6cps.

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 0.18%.
• On the commodities front this morning oil is trading down 0.4% at US$76.35/barrel, gold is down 0.15% at US$2504/ounce, and iron ore is trading 0.75% lower at US$97.81/tonne.
• The Aussie dollar has strengthened to buy US$0.67 cents, 98.63 Japanese Yen, 51.53 British Pence and NZ$1.10.

Trading Ideas:

• Bell Potter has decreased the 12-month price target on Nufarm (ASX:NUF)and maintain a hold rating on the leading producer of ag-chem products globally following a trading update out of the company with softer-than-expected trading in North America and Europe leading to the company downgrading FY24 EBITDA expectations from $350-$390m to $300m-$330m.
• And Trading Central has identified a bullish signal on Australian Clinical Labs (ASX:ACL) following the formation of a pattern over a period of 56-days which is roughly the same amount of time the share price may rise from the close of $2.64 to the range of $3.10 to $3.25 according to standard principles of technical analysis.

This week has seen the emergence of key trends driving investor reactions to FY24 results including high-cost pressures depleting margins across the board, retailers beating expectations, and the outlook for FY25 being the most important metric for investors assessing results this reporting season.

In this week’s wrap, Grady covers:

• (0:47) Goodman Group exceeding expectations
• (2:46) energy leaders providing similar outlooks for FY25
• (6:02) results from Australia’s biggest bank, CBA
• (7:03): how the ASX200 performed this week so far
• (7:46): the most traded stocks & ETFs by Bell Direct clients 
• (8:15): economic news to watch out for next week. 

Wall St closed higher overnight following the release of positive US inflation data. The Dow Jones closed 0.61% higher, the S&P500 closed in the green for the 5th straight day, up 0.38% and the tech-heavy Nasdaq rose slightly by 0.03%.

US core inflation data which excludes volatile items such as food and energy were released overnight, coming in at 3.2% year-on-year which was 0.1% lower than the forecast and previous result of 3.3%.

Over in Europe, markets closed higher as investors digested key inflation figures coming out of both the US and UK. The STOXX600 closed 0.43% higher overnight with travel and leisure stocks rising 2.89% and mining stocks leading losses, down 0.97%. Germany’s DAX rose 0.41%, the French CAC rallied 0.79% and over in the UK the FTSE100 gained 0.56%.

Key UK inflation data was released overnight, coming in below expectations for July at 2.2%, however this is still above the Bank of England’s target of 2%.

Locally yesterday, the ASX200 closed 0.3% higher by market close. Gains were led by the health and information technology sectors which rose 1.68% and 1.59% respectively. This was offset by the materials sector which saw a loss of 1.87% 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 0.36% at market open this morning.
• On the economic calendar today, Australian unemployment data for July will be released with a consensus and forecast to remain at 4.1%, the same as its previous result.
• On the commodities front this morning,
   
  • Oil is trading 1.28% lower at 77 US dollars and 35 cents a barrel after the EIA reported an increase in US crude oil inventories that rose by 1.357 million barrels last week. 
  • Gold is trading 0.66% lower at 2447 US dollars an ounce and iron ore is trading 0.23% lower at 100 US dollars and 44 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Seven Group Holdings (ASX:SVW) and has increased its 12-month price target to $46. The buy rating is maintained by Bell Potter, following the announcement of results by SVW which included an underlying NPAT attributable to owners of $850m, up 30% year-on-year and exceeding Bell Potter’s forecast of $822m. As well as this, SVW’s business 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 outlooks for mining production, engineering construction and transitional energy markets, hence the buy rating is maintained.
• Trading central has identified a bearish signal on BlueScope Steel (ASX:BSL), indicating that the stock price may fall from the close of $19.84 to the range of $16.80-$17.40 on a pattern formed over 31 days, according to the standard principles of technical analysis.

Wall Street’s rally has extended into another session on Tuesday as equities move closer to July’s record following the release of PPI inflation data and ahead of the inflation reading out tonight. The Dow Jones rose 1.04%, the S&P500 added 1.68% higher and the tech-heavy Nasdaq ended the day up 2.43%. The US producer price index increased 0.1% in July which fell short of economists’ expectations and further indicates inflation in the US is easing.

The US inflation reading out tonight is expected to rise just slightly on last month but remain steady at 3% YoY. If the reading comes in below economists’ expectations’, we will likely see equities rally on Wall Street on Wednesday as the two inflation related readings easing will boost investor sentiment of a soft landing over a recession.

Across the European markets overnight, markets closed higher in the region as investors assessed the latest batch of economic data out in the region. The STOXX 600 rose 0.5% led by gains among healthcare stocks, while Germany’s DAX added 0.48%, the French CAC rose 0.35% and, in the UK, the FTSE100 ended Tuesday’s session up 0.3%. UK wage data out overnight showed pay excluding bonuses grew by 5.4% YoY between April and June which is the lowest rate in two years.

The UK unemployment rate also fell to 4.2% from 4.4% which fell short of economists’ expectations indicating strength in the UK economy as inflation continues to ease.
 Across the Asia markets on Tuesday, it was a mostly green finish led by Japan’s Nikkei rising 3.45% after Japan’s Producer Price Index rose 3% in July from the prior year. South Korea’s Kospi Index rose just 0.12% on Tuesday, Hong Kong’s Hang Seng gained 0.32% and China’s CSI index ticked 0.26% higher.

The local market rallied 0.17% yesterday despite a near 3% decline in healthcare stocks weighing on market gains as healthcare heavyweight CSL declined on disappointing outlook for FY25.

Economic data out yesterday also added to market gains yesterday as wage growth steadied in Q2 which has been a key driver of inflation remaining high, while Westpac consumer confidence data also rose 2.8% to 85 points in August from 82.7 points in July indicating consumer sentiment is slightly improving but remains weaker than historical levels.

NAB Business confidence data also out yesterday continued its downward trajectory though in July with a reading of 1 index point, down from 3 index points in June, indicating Australian businesses remain pessimistic about the current state of the market, however, the ease in wages growth and slowing inflation drivers pave the way for a recovery in business confidence over the second half of CY24.

Temple & Webster shares shot the lights out yesterday with a 26% rise on the back of stellar FY24 results being released including record revenue of $498m and a strong start to FY25.

James Hardie Industries came under pressure yesterday following release of a Q1 FY25 trading update. Despite posting net sales up 4% to $992m, investors sold out on the outlook of weakening demand and easing volumes in the company’s key North American operations.

What to watch today:

• Ahead of the midweek session on the ASX the SPI futures are anticipating the local market to open the day up a sharp 0.73% on the global rally overnight.
• On the commodities front this morning, oil is trading 2.1% lower at US$78.38/barrel, gold is down 0.4% at US$2466/ounce and iron ore is down 0.6% at US$100.67/tonne.
   AU$1.00 is buying US$0.66, 97.35 Japanese Yen, 51.28 British Pence and NZ$1.09 cents.

Trading Ideas:

• Bell Potter has maintained a hold rating on Temple & Webster but have raised the 12-month price target on the leading online furniture retailer from $11.40 to $12.20 following the release of the company’s FY24 results yesterday. Bell Potter’s analyst says the price target increase was driven by