Between the Bells

Wall St closed mixed to start the trading week as investors prepare for the start of earnings season. The Dow Jones closed 0.12% lower overnight, the S&P500 gained 0.08% and the tech-heavy Nasdaq ended Monday’s trading session 0.07% higher.

Over in Europe, markets closed lower as investors look ahead to European Central Bank meetings later this week. The STOXX600 closed 0.18% lower with the majority of sectors trading in the red. This was led by autos which fell 1.35%, whilst healthcare stocks rose 0.66%. Germany’s DAX fell over half a percent, the French CAC lost nearly 1% and over in the UK the FTSE100 gained 0.08% by the closing bell.

Locally yesterday, the ASX200 closed 0.86% higher with all sectors closing in the green. Gains were led by the information technology and communication services sectors which rose 1.53% and 1.4% respectively.

What to watch today:

• The Australian share market is set to open lower, with the SPI futures suggesting a fall of 0.69% at market open this morning.
• On the commodity front this morning,
   
  • Oil is trading 1.62% lower at US$75.91/barrel, gold is trading 0.12% lower at US$2383/ounce and iron ore is trading 0.26% lower at US$106.86/tonne.

Trading Idea:

• Bell Potter maintains a buy rating on Burgundy Diamond Mines (ASX:BDM) and has a 12-month price target of $0.28. The buy rating is maintained by Bell Potter as they expect positive news flow over the second half of 2024 as BDM report on mine life extension activities and continue to optimise existing operations. As well as this, their Ekati diamond mine is a highly strategic asset within the luxury goods value chain, hence the buy rating is maintained.

A week of mixed sentiment ended with a soaring rally on Friday as investors digested fresh inflation data out in the U.S. The Dow Jones rallied 1.64%, the S&P500 climbed 1.1% and the tech-heavy Nasdaq ended the day up 1.03%. The Fed’s preferred measure of inflation, the personal consumption expenditures price index rose 0.1% on a monthly basis in June and 2.5% yearly, with both readings falling in line with economists’ expectations. This data comes as GDP growth rate data for the US out last Thursday came in at a growth of 2.8% in Q2 which was stronger than economists were expecting, indicating the world’s largest economy continues to grow whilst taming inflation.

Over in Europe markets closed higher on Friday as the global market sell-off eased. The STOXX600 rose 0.9%, Germany’s DAX added 0.65%, the French CAC rose 1.22%, and, in the UK, the FTSE 100 ended the day up 1.21%.

Across the Asia markets on Friday it was a mostly green end to a volatile week, despite Japan’s Nikkei closing lower for an 8th straight session as Tokyo’s headline inflation slowed slightly to 2.2% in July and corporate earnings weighed on investor sentiment in the region as Nissan fell 3.88% after reporting disappointing results for Q1. Hong Kong’s Hang Seng rose 0.34% on Friday, China’s CSI Index added 0.29% and South Korea’s Kospi index ended the day up 0.78%.

Locally on Friday the ASX200 rose 0.76% led by the materials sector jumping 1.42% while every other sector aside from staples stocks ended the day in the green.

Mineral Resources jumped 3.5% on Friday after the mining services and production giant said it was on track to achieve its output guidance for FY24.

Bellevue Gold tumbled 21% on Friday after the gold producer tracking the easing price of gold on Friday and after the company announced it has received firm commitments for a $150m fully underwritten institutional placement with plans to use the proceeds for paying down debt, unlocking free cash flow and to support accelerated exploration and growth.

What to watch today:

• Ahead of the first trading session of the last trading week of July, the SPI futures are anticipating the ASX to open the day up 0.76% on the back of Wall Steet’s rally on Friday.
• On the commodities front this morning oil is trading 0.27% higher at US$77.38/barrel, gold is up 0.38% at US$2395/ounce and iron ore is down 0.26% at US$106.86/tonne.
• AU$1.00 is buying US$0.65, 100.87 Japanese Yen, 50.88 British Pence and NZ$1.11.

Trading Idea:

• Bell potter has increased the 12-month price target on Polynovo (ASX:PNV) from $2.05 to $2.52 and maintain a hold rating on the healthcare company amid long-term growth opportunities for the company. Numerous factors have contributed to the re-rating over recent months including execution on the sales roll out in the US being flawless, while each of the peers have endured a period of faltering growth resulting in adverse valuation adjustments. FY25 revenues are expected to increase by around $35m being a similar quantum increase in FY24 with the net result being ROE and return on cash invested capital beginning to look very attractive leading to the price target increase according to Bell Potter’s analyst. The analyst said a reasonable amount of growth is already priced in hence the hold rating.

The upcoming report season will provide valuable insights into how ASX-listed companies fared over the financial year. As companies unveil their FY24 results, investors will be keen to assess their performance against a backdrop of rising interest rates, persistent inflation, and a slowing Chinese economy. 

This video explores key trends, sector outlooks, and potential market movers. 

In this week’s wrap, Grady covers:

• (0:11): the economic impact on company earnings
• (1:11): why all eyes are on large-cap stocks
• (2:09): an analysis on sector performance & top stock picks
• (3:35): how the ASX200 performed this week so far
• (4:41): the most traded stocks & ETFs by Bell Direct clients
• (5:09): economic news items to watch out for.

Wall St closed lower overnight as the Nasdaq continued it’s losses from the previous trading session. The Dow Jones rose 0.2%, the S&P500 fell over half a percent and the tech-heavy Nasdaq dropped 0.93%.

US GDP data was released overnight at 2.8% quarter on quarter, 0.3% higher than the forecast of 2.5%

In terms of US stocks, investors moved away from some big AI names including Nvidia which fell 1.7%, Microsoft that lost 2.5% and Alphabet which declined by more than 3%.

Over in Europe, markets closed lower following the sell-off in Wall Street with the STOXX600 ending Thursday trading session 0.72% lower. Germany’s DAX fell 0.48%, the French CAC slid 1.15% and over in the UK the FTSE100 gained 0.4% by market close.

What to watch today:

• The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.42% at market open this morning.
• On the commodities front this morning,
   
  • Oil is trading over 1% higher at 78 US dollars and 38 cents a barrel following stronger than expected US economic growth and a decline in crude inventories. 
  • Gold is trading 1.43% lower at 2364 US dollars an ounce and iron ore is trading 0.3% lower at 107 US dollars and 47 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on MedAdvisor (ASX:MDR) and has a 12-month price target of $0.64. The buy rating is maintained by Bell Potter following another strong quarter of topline growth in the US, Australia and New Zealand, while gross margins also improved. Q4 revenue was up 32% on the previous corresponding period with full-year revenue up 25%, hence the buy rating is maintained.
• And Trading Central has identified a bullish signal on Spark New Zealand (ASX:SPK), indicating that the stock price may fall from the close of $3.73 to the range of $3.54-$3.58, on a pattern formed over 40 days according to the standard principles of technical analysis.

Wall Street crumbled on Wednesday as underwhelming results out of two of the tech mega caps weighed on investor sentiment around valuations at the current levels. The Dow Jones fell 1.25% on Wednesday while the Nasdaq and S&P500 had their worst sessions since 2022 with each indices tumbling 2.31% and 3.64% respectively. Shares in Google parent company, Alphabet, fell 5% despite the tech giant beating on the top and bottom-line expectations for Q2. Investors may have sold out of Alphabet after YouTube advertising revenue came in below expectations.

Tesla shares tanked 12.3% for the EV giant’s worst session since 2020 on weaker-than-expected results and a 7% YoY decline in auto revenue as appetite for EVs continues to decline globally.

Across the European markets overnight, markets also closed in the red as investors digested the latest release of corporate earnings results. The STOXX 600 fell 0.6%, Germany’s DAX lost 0.92%, the French CAC declined 1.12% and, in the UK, the FTSE100 ended Wednesday’s session down 0.17%. Deutsche Bank shares fell over 8% on Wednesday after the bank snapped a 15-quarter profit streak in the latest quarter, while LVMH shares fell 4.7% on Wednesday after the luxury fashion house missed second quarter revenue expectations.

Markets across Asia closed lower on Wednesday tracking the global market sell-off, with Hong Kong’s Hang Seng falling 1.1% while China’s CSI declined 0.63% and Japan’s Nikkei ended the day down 1.11%

The local market eased on Wednesday to post a 0.1% loss tracking Wall Street’s negative close on Tuesday and as local energy and REIT stocks weighed on the key index during the midweek session.

Australia’s Judo flash manufacturing PMI data out yesterday indicated a slight growth in manufacturing PMI for July from 47.2 points in June to 47.4 points in July which beat economists’ expectations of a dip to 47 points as input costs increased at a softer pace than average while selling prices rose slightly. Australia’s Judo flash services PMI business activity index data was also out yesterday and came in at a decline to 50.8 points in July from 51.2 points in June, which fell short of economists’ expectations of a slight decline to 50.9 points. The services PMI reading fell in July as the sector faced a renewed decline in orders amid decreased client demand and a drop in international business in 2024.

What to watch today:

• Ahead of Thursday’s trading session, the SPI futures are anticipating the ASX to open the day down 0.95% tracking the global market sell-off overnight.
• On the commodities front this morning, oil is trading 0.02% higher at US$77.455/barrel, gold is down 0.52% at US$2395/ounce and iron ore is down 0.27% at US$108.16/tonne.
• The Aussie dollar has further weakened overnight to buy US$0.65 cents, 101.18 Japanese yen, 51.88 British pence and NZ$1.11.

Trading Ideas:

• Bell Potter has increased the rating on Pantoro (ASX:PNR) from a hold to a buy and maintain a 10cps 12-month price target on the West Australian gold production and development company following the release of the company’s June quarter report which included a second consecutive quarter of record production for the Norseman Gold Project. Bell Potter’s analyst sees recent share price depreciation, Pantoro’s unhedged gold leverage to the rising gold price, and production growth in FY25 as reasons for the upgrade to a buy.
• And Trading Central has identified a bearish signal on Lendlease (ASX:LLC) following the formation of a pattern over a period of 19-days which is roughly the same amount of time the share price may fall from the close of $6 to the range of $5.15 to $5.30 according to standard principles of technical analysis.

Wall Street closed lower on Tuesday as a morning rally eased in the last hour of trade to see the key indices post slight losses as investors continue to assess second quarter earnings reports. 2 of the magnificent 7, Tesla and Alphabet, released results after the closing bell on Tuesday with Alphabet reporting better-than-expected results while Tesla saw its profit tumble 45% on easing EV demand. Investors are digesting the combination of results, economic data and US political developments at present which is likely to continue driving investor moves for some time to come.

UPS shares fell 12% on Tuesday after the global shipping and logistics service provider released results that fell short of expectations on both the top and bottom lines, while General Motors beat expectations for Q2, however, shares in the automaking giant declined 6.4% on Tuesday as the company delayed plans for its electric and autonomous vehicles.

Investors grew wary of tech valuations late last week, prompting a mass sell-off in the high growth sector, in favour of opportunities in the small cap space.

In Europe overnight, markets closed mixed as investors continued assessing earnings reports from companies across the region. The STOXX 600 rose 0.13%, while Germany’s DAX added 0.8%, the French CAC fell 0.31% and, in the UK, the FTSE100 ended the day down 0.38%.

Across the Asia markets on Tuesday is was a mixed session with Japan’s Nikkei adding 0.3% while Hong Kong’s Hang Seng fell 0.94%, and China’s CSI index fell 2.14%.

Locally on Tuesday, the ASX has had a positive start to the week as investors looked for opportunities in the small cap space while also buying back into the AI-driven tech sector. Locally on Tuesday the ASX200 rose 0.5% driven by the tech, healthcare, industrials and consumer discretionary sectors posting gains over 1% while energy stocks tumbled 2% on the sliding price of key commodities.

Woodside shares slipped on Tuesday after the mining giant released second quarter results including quarterly production down 1% on Q1 due to planned maintenance activities, weather impacts and unplanned outages at Wheatstone and Julimar. Quarterly revenue rose 2% on Q1 though to $3.033bn, and Woodside maintained full year guidance. Investors may have been hitting the sell button yesterday after Woodside increased total estimated costs of the Scarborough Energy project by 4% to US$12.5bn.

What to watch today:

• Ahead of the midweek trading session here in Australia the SPI futures are anticipating the ASX to open Wednesday’s session up 0.14% extending on yesterday’s rally ahead of the release of Judo Bank Manufacturing and Services PMI flash data for July out this morning.
• On the commodities front this morning, oil is trading 1.53% lower at US$77.20/barrel, gold is up 0.35% at US$2404/ounce and iron ore is down 0.3% at US$108.16/tonne.
• AU$1.00 is buying US$0.66, 102.98 Japanese Yen, 51.33 British Pence and NZ$1.11.

Trading Ideas:

• Bell Potter has downgraded the rating on DroneShield (ASX:DRO) from a buy to a hold and have increased the 12-month price target on the counter drone technology company from $1 to $1.60 noting all eyes are on H2 for DroneShield. Bell Potter sees the bullish long-term view of DroneShield remains unchanged, however, at its current valuation, DRO will attract increased scrutiny over its short-term performance and future contract announcements thus the analyst anticipates continued share price volatility.
• And Trading Central has identified a bullish signal on Centuria Capital (ASX:CNI) following the formation of a pattern over a period of 20-days which is roughly the same amount of time the share price may rise from the close of $1.69 to the range of $1.95 to $2.01 according to standard principles of technical analysis.

Wall St closed higher overnight as Nvidia shares led a turnaround on tech stocks and the S&P500 rose in its best day since early June. The Dow Jones gained 0.32%, the S&P 500 advanced over 1% and the tech-heavy Nasdaq rose by 1.58%.

In terms of US shares, Nvidia soared by 4.8% following their 8% decline last week. Other tech stocks including Alphabet and Meta also gained more than 2% each.

Over in Europe, markets closed higher as they react to the news that Joe Biden has dropped out of the US presidential race. The STOXX600 closed 1% higher with the majority of sectors finishing in the green. The only stocks which closed lower on Monday were travel and leisure and retail stocks which fell 2.33% and 0.03% respectively. Germany’s DAX rose 1.29%, the French CAC rallied by 1.16% and over in the UK, the FTSE100 ended Monday’s trading session 0.53% higher.

Locally yesterday, the ASX200 closed half a percent lower with the vast majority of sectors closing in the red. Losses were led by the energy and materials sectors which fell 1.62% and 0.86% respectively. This was slightly offset by the consumer staples sector which rose 0.65% 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 0.70% at market open this morning.
• On the commodities front this morning,
   
  • Oil is trading 0.52% lower at US$78.23/barrel, following renewed optimism for a ceasefire in Gaza which could as a result increase global oil supply. 
  • Gold is trading 0.02% higher at US$2395/ounce and iron ore is trading 0.26% lower at US$108.45/tonne. 

Trading Ideas:

• Bell Potter maintains a buy rating on Universal Store Holdings (ASX:UNI) and has increased its 12-month price target to $6.65. The buy rating is maintained by Bell Potter due to the company’s store roll-out & brand growth strategy, gross margin expansion via private label product penetration and earnings trajectory through to FY25 and FY26.
• And Trading Central has identified a bearish signal in Star Entertainment Group (ASX:SGR), indicating that the stock price may fall from the close of $0.50 to the range of $0.44-$0.46, on a pattern formed over 41 days according to the standard principles of technical analysis.

Wall Street closed sharply lower on Friday as investors dumped mega cap stocks in favour of smaller caps following the broad rally that sent key indices and valuations to record highs in recent months. The Dow Jones fell 0.93%, the S&P500 declined 0.71%, the tech-heavy Nasdaq ended the day down 0.81%, but the small-cap focused Russell 2000 climbed 1.68% on Friday.

CrowdStrike, the cybersecurity company behind the global IT outage on Friday, tanked 11.1% following the outage.

Over in Europe, markets closed lower as the global IT outage hit businesses in the region. The STOXX 600 fell 0.77%, marking a fifth straight losing day, as the travel sector plunged 2.07% amid widespread flight disruptions on the back of the IT outage. Germany’s DAX ended Friday’s session down 0.45%, the French CAC lost 0.7% and, in the UK, the FTSE100 ended the day down 50 points.

Across the Asia region tracked broad global market declines with Japan’s Nikkei falling 0.4% on Friday, while South Korea’s Kospi index declined 1.6% and Hong Kong’s Hang Seng ended the day down 2.1%.

Locally on Friday, the ASX200 fell 0.81% for a third straight losing day as the big miners weighed on the key index, tracking the declining price of key commodities, while tech stocks also tracked the sharp sell-off in tech stocks on the Nasdaq on Thursday. The local economy was thrown into chaos mode on Friday amid the global Microsoft system outage sparked by a system update run by cybersecurity company CrowdStrike in the early hours of Friday morning US time. The outage hit thousands of businesses and almost every sector was impacted. For the week, the ASX200 posted a slight gain of 0.15% as real estate, consumer staples and healthcare stocks posted gains over 1% which offset the heavy losses among materials and tech stocks.

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 0.84% tracking Wall Street’s broad large cap sell-off on Friday.
• On the commodities front this morning oil is trading 0.53% higher at US$80.43/barrel, gold is up 0.63% at US$2410/ounce and iron ore is down 0.26% at US$108.45/tonne.
• AU$1.00 dollar is buying US$0.67, 105.37 Japanese Yen, 51.74 British Pence and NZ$1.11.

Trading Ideas:

• Bell Potter has increased the rating on Whitehaven Coal (ASX:WHC) from a hold to a buy and have increased the 12-month price target from $8.90 to $9.90 as the analyst sees tailwinds incoming for the thermal and metallurgical coal producer. The company reported Q4 results last week outlining higher quarterly production, and higher managed saleable production than Bell Potter was expecting. 1H25 earnings are expected to strengthen at the same time stronger met coal demand is expected to provide additional earnings tailwinds.
• And Trading Central has identified a bearish signal on Sigma Healthcare (ASX:SIG) following the formation of a pattern over a period of 26-days which is roughly the same amount of time the share price may fall from the close of $1.31 to the range of $0.99 to $1.05 according to standard principles of technical analysis.

The Australian market has been busy this week as we approach the FY24 results season. Some companies have provided early indications of their performance, while others have offered updates on their Q4 trading and future outlook. Which names stood out this week and how did this impact the local market as we head towards the mid-July?

In this week’s wrap, Grady covers:

• (0:31): why Accent Group soared this week
• (2:02): the sell-off in BHP Group
• (3:12): Domino’s worldwide strategic review
• (4:52) the winning and losing stocks of the week
• (5:43): the most traded stocks & ETFs by Bell Direct clients
• (6:09): economic data to watch next week.

Wall St closed lower overnight as investors continue the sell-off in some big technology names. The Dow Jones fell 1.29%, the S&P500 lost 0.78% and the tech-heavy Nasdaq ended Thursday’s trading session 0.7% lower.

Over in Europe, markets closed lower following the announcement that the European Central Bank will keep interest rates unchanged. The STOXX600 closed 0.16% in the red, its fourth successive day closing lower with technology stocks losing 1.8% where as autos stocks rose 1.23%. Germany’s DAX fell 0.45%, where as the French CAC and the UK’s FTSE100 both gained 0.21%.

Locally yesterday, the ASX200 fell 0.27% with the majority of sectors ending Thursday’s trading session in the red. Losses were led by the information technology sector which lost 3.39%. This was slightly offset by the utilities sector which closed 0.35% higher.

The unemployment rate for June was released yesterday at 4.1%, 0.1% higher than the 4% consensus and forecast.

What to watch today:

• The Australian share market is set to open lower, with the SPI futures suggesting a fall of 1.09% at market open this morning.
• On the commodities front this morning,
   
  • Oil is trading 0.59% lower at US$82.36/barrel, gold is trading 0.65% lower at US$2445/ounce and iron ore is trading 0.41% lower at US$108.94/tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Duratec Limited and has a 12-month price target of $1.52. Duratec (ASX:DUR) is a WA based specialist engineering contractor, with a strong reputation in the asset protection and specialist construction space throughout Australia. The buy rating is maintained by Bell Potter as the company has good options for long term growth, particularly in the defence space and the current share price of $1.24 is an attractive entry point.
• And Trading Central has identified a bullish signal in Adairs Limited (ASX:ADH), indicating that the stock price may rise from the close of $1.92 to the range of $2.19-$2.25, on a pattern formed over 51 days according to the standard principles of technical analysis.