Between the Bells

Wall St closed mixed overnight as the Nasdaq posted its worst day since 2022. The Dow Jones rose 0.59%, the S&P500 fell 1.39% and the tech-heavy Nasdaq plummeted 2.77%. 

This was the first time since 2001 in which the Nasdaq lost more than 2.5% in a trading session which saw meta platforms fall 5.7% and tech giants Netflix and Microsoft both also losing 1% each.

Over in Europe, markets closed lower as tech stocks ended the trading session in negative territory. The STOXX600 closed 0.43% in the red with most major sectors closing mixed on Wednesday. Germany’s DAX fell 0.44%, the French CAC dropped 0.12% whilst over in the UK the FTSE100 rallied by 0.28%.

Locally yesterday, the ASX200 ended Wednesday’s trading session 0.73% in the green with all major sectors finishing the day positively. Gains were led by the real estate and information technology sectors which rose 1.49% and 1.24% respectively.

What to watch today:

• The Australian share market is set to open lower, with the SPI futures suggesting a fall of 0.54% at market open this morning.
• On the commodities front this morning,
   
  • Oil is trading 2.93% higher at 83 US dollars and 12 cents a barrel, rebounding from a three-day losing streak.
  • Gold is trading 0.38% lower at 2458 US dollars an ounce and iron ore is trading 0.26% lower at 109 US dollars and 39 cents a tonne.

Trading Ideas:

• Bell Potter maintains a speculative buy rating on PYC Therapeutics (ASX:PYC) and has an unchanged 12-month price target of $0.17. The speculative buy rating is maintained by Bell Potter as PYC have recently made strong progress across two Phase 1 clinical trials in which it is believed PYC are on the cusp of seeing patients respond to treatment which would provide considerable de-risking and value inflection for the lead asset and broader platform.
• And Trading Central has identified a bullish signal on Lindsay Australia (ASX:LAU), indicating that the stock price may rise form the close of $0.97 to the range of $1.12-$1.16, on a pattern formed over 55 days, according to the standard principles of technical analysis.

Wall Street extended its broad bull market rally into Tuesday with some key indices hitting record highs as investor optimism rises on rate cut hopes. The Dow Jones soared 1.85% to a fresh record high of 40,954.48, while the tech-heavy Nasdaq rose just 0.2% and the S&P500 ended the session 0.64% higher. Corporate earnings results have also started being released in the US which is adding fuel to the bull market. The Bank of America and Morgan Stanley both released results overnight that beat analysts’ forecasts and saw shares in the companies rise 5% and nearly 1% respectively.

Sentiment was boosted overnight by Fed chair Jerome Powell saying that Q2 economic data has bolstered confidence that inflation is cooling, with markets now pricing in two rate cuts this year, with the markets now pricing in a 100% chance of a rate cut in September.

In Europe overnight, markets in the region closed lower as investors responded to key corporate earnings results and assessed the impact of high interest rates on both outlook and earnings across the board. The STOXX 600 fell 0.21% on Tuesday, Germany’s DAX lost 0.39%, the French CAC fell 0.69%, and, in the UK, the FTSE100 ended the day down 0.22%.

Key fashion houses took the biggest hit in Europe overnight with Germany’s Hugo Boss tumbling 7.5% after the company cut its full-year sales outlook, while the U.K.’s Burberry lost 5.2% a day after the company issued a profit warning on weak luxury demand.

Across the Asia region on Tuesday, it was a mixed session across markets with Hong Kong’s Hang Seng falling 1.6%, while China’s CSI ended the day up 0.63%, Japan’s Nikkei gained 0.2% on Tuesday and India’s Nifty 50 hit an all time high, gaining 0.2%.

The local market slipped from record highs on Tuesday to close the day down 0.23% as the big iron ore miners weighed on the market, tracking the declining price of the iron ore futures. Rio Tinto’s share price fell 2% after reporting second quarter results that fell short of market expectations including iron ore shipments of 80.3 million tonnes compared to expectations of 82 million tonnes due to rail delays experienced during the quarter.

Droneshield tumbled 30% yesterday before hitting a trading halt then resuming trade after the counter-drone technology stock responded to a media speculation that cast doubt on the longevity of the company’s stellar rally over the last 12-months.

Lifestyle Communities recovered some ground yesterday with a 5.53% rally after a sell-off on Monday following media reports around treatment of some residents at its homes.

What to watch today:

• Ahead of the midweek trading session here in Australia the SPI futures are anticipating the ASX to open the day up 0.65% tracking Wall Street’s bull run overnight.
• On the commodities front this morning oil has slipped 1.42% to trade at US$80.75/barrel, gold is up 1.92% at US$2469/ounce and iron ore is up just 0.08% at US$109.67/tonne.
• AU$1.00 is buying US$0.67, 106.65 Japanese Yen, 52.02 British Pence and NZ$1.11.

Trading Ideas:

• Bell Potter has slightly increased the 12-month price target on Electro Optic Systems (ASX:EOS) and maintain a buy rating on the Australian defence manufacturer following the release of the company’s 1H24 results outlining a better-than-expected start to the year. Over the first half, EOS reported revenue rose 92% on the PCP to $142.6m which beat BPe, and Bell Potter continues to forecast a return to profitability for the company in CY25.
• And Bell Potter has maintained a buy rating on HUB24 (ASX:HUB) with a 12-month price target of $53.20 following the release of the specialist investment platform provider’s June quarter update including a strong Q4 performance of Funds Under Administration improving to $104.7bn, up 30% on the PCP and net flows of $5bn.

Wall Street rallied on the first trading day of the new week as investors now believe it is more likely for presidential candidate Donald Trump to reclaim the White House at the upcoming election following a failed assassination attempt of the former president over the weekend. The rally was also boosted by strong corporate results out as we near earnings season, with key banks including Goldman Sachs and BlackRock both beating profit expectations in results out overnight. The Dow Jones closed at a second consecutive session record with a rise of 0.4% on Monday, the Nasdaq also added 0.4% and the S&P500 ended the day up 0.3%.

Over in Europe, markets closed lower on Monday as investors digested some disappointing earnings results released on Monday. The STOXX 600 fell 1% as every sector ended the day in the red, while Germany’s DAX dropped 0.84%, the French CAC fell 1.19% and, in the UK, the FTSE100 ended the day down 0.85%. Shares in luxury brand Burberry plunged 16% after the company posted disappointing Q1 results including the axing of its dividend, while Swatch Group also dropped 9.8% as profits fell amid easing sales in China.

Across the Asia markets on Monday, it was a mixed session as investors assessed key economic data out in the region. China’s CSI index rose 0.11%, South Korea’s Kospi index fell 1.73%, and Japan’s Nikkei was closed for a public holiday.

China’s economic outlook took another hit yesterday with the world’s second largest economy reporting its worst pace in economic growth in five quarters with a GDP data showing expansion of 4.7%, down from the 5.3% reported in Q1 and well below economists’ expectations of a 5.1% reading. Weak domestic demand, falling yuan, persistent property downturn and trade tensions were the key drivers of the eased economic expansion. China’s retail sales for June also came in lower than expected with a 2% gain YoY compared with expectations of 3.3%.

The local market started the week with a modest gain of 0.73% to close with a fresh record of 8017.60 points with every sector ending the day in the green led by the tech sector jumping 1.4%. The broad market rally yesterday was driven by Wall Street’s record run that ended last week on a high note.

Aussie Broadband tumbled 14% on Monday after the company lowered its earnings guidance for FY25, while Lifestyle Communities tanked 18% on the back of a news report featuring residents of the company’s properties outlining alleged immoral and unethical conduct.

Star Entertainment shares lost 1% after the casino operator reported it has been forced to pause its electronic game rollout due to issues with the software.

What to watch today:

• Ahead of Tuesday’s trading session here in Australia the SPI futures are anticipating the ASX to open the day down 0.05%
• On the commodities front this morning, oil is trading 0.45% lower at US$81.84/barrel, gold is up 0.41% at US$2421/ounce and iron ore is flat at US$109.58/tonne.
• The Aussie dollar is buying US$0.68, 106.92 Japanese Yen, 52.19 British Pence and NZ$1.11.

Trading Ideas:

• Bell Potter has maintained a hold rating on Nanosonics (ASX:NAN) and have increased the price target on the healthcare equipment and services company from $3 to $3.45 following the release of a trading update out of the company yesterday. Nanosonics outlined it expects revenues at the upper end of guidance and operating expenses to growth also within the specified range of 9-11%.
• And Trading Central has identified a bullish signal on Step One Clothing (ASX:STP) following the formation of a pattern over a period of 36-days which is roughly the same amount of time the share price may rise from the close of $1.47 to the range of $1.64 to $1.70 according to standard principles of technical analysis.

Wall Street re-entered record territory on Friday after a slight pullback on Thursday following the release of positive inflation data earlier in the week and as investors looked outside of the AI rally to capitalise on attractive investment opportunities across the broader market. The Dow Jones rose 0.62% to top 40,000 for the first time ever, while the S&P500 and Nasdaq rose 0.55% and 0.63% respectively. The banks fell on Friday despite posting stronger results than expected with JPMorgan shares sliding 1.2% despite topping Q2 revenue expectations and Citi fell 1.8% also despite beating on the top and bottom lines in Q2.

Over in Europe, markets closed higher across the region on Friday with the STOXX 600 rising 0.97% driven by telecom stocks after strong second quarter results boosted stocks in the sector. Germany’s DAX rose 1.15% on Friday, the French CAC added 1.27% and, in the UK, the FTSE100 ended the day up 0.36%.

Across the Asia markets on Friday, it was a mixed finish to the week across the region with Japan’s Nikkei falling over 2% after hitting record highs in the previous sessions. Hong Kong’s Hang Seng rose 2.6%, South Korea’s Kospi index fell 1.18%, and China’s CSI index rose 0.12% after Chinese exports beat expectations with a rise of 8.6% YoY in June indicating further recovery in the region post-pandemic.

Locally on Friday the ASX200 rose 0.88% to a record close with every sector aside from the tech sector ending the day higher, led by real estate stocks jumping almost 2%. The price of gold topped US$2400 late last week which boosted local gold miners including Bellevue Gold (ASX:BGL) rising 1.5%, Spartan Resources (ASX:SPR) soaring over 7% and Gold Road Resources (ASX:GOR) jumped 2.3%. The easing inflation data out of the US was the key driver of the gold price rally as markets are now pricing in a rate cut out of the Fed by September. The local big banks rallied on Friday with Commonwealth Bank (ASX:CBA) closing the day at a record $131.60 taking its market cap to $221bn, making it the largest company on the ASX.

What to watch today:

• Ahead of the first trading session of the new trading week the SPI futures are anticipating the ASX to open the day up 0.64% on the back of Wall Street’s strength on Friday.
• On the commodities front this morning oil is trading 0.15% higher at 82.34 per barrel, gold is down 0.16% at US$2,407 an ounce and iron ore is flat at US$109.58 per tonne.
• The Aussie dollar has strengthened again to buy 68 US cents, 107.14 Japanese Yen, 53.04 British Pence and 1 New Zealand dollar and 11 cents.

Trading Ideas:

• Bell Potter has increased the 12-month price target on Coventry Group (ASX:CYG) from $1.80 to $2.00 and maintain a buy rating on the industrial supplies and services group following the release of a strong trading update out of the company for Q4 including group sales growth of 4% and the outlook for FY24 EBITDA of 22% growth on FY23.
• Trading Central has identified a bullish signal on IGO Ltd (ASX:IGO) following the formation of a pattern over a period of 16-days which is roughly the same amount of time the share price may rise from the close of $6.07 to the range of $6.47 to $6.57 according to standard principles of technical analysis.

The S&P 500 has notched seven consecutive record highs, fueled by investor optimism over AI advancements. Apple's ascent to the top of the market cap rankings underscores the technology sector's dominance. However, with valuations stretched, questions arise about the sustainability of this rally. This week's market update explores the driving forces behind the record-breaking surge and assesses potential investment opportunities.

In this video, Grady covers: 

• (0:15): what’s behind the S&P500 hitting 7 consecutive record highs 
• (0:33): why Apple overtook Nvidia as the most valuable company 
• (0:58): how Ai optimism is driving the tech sector surge
• (4:59): how the ASX200 has performed this week so far 
• (6:23): the most traded stocks & ETFs by Bell Direct clients 
• (6:39): economic data to watch out for next week. 

Wall Street extended its record run into the midweek session as a sharp rise in semiconductor stocks led the market rally for another day. The rally was also ahead of key US inflation data out on Thursday US time with economists’ expecting the inflation rate month-on-month to rise just slightly by 0.1% in June from May, while the YoY inflation rate is expected to cool to 3.1% in June from 3.3% in May. Core inflation is anticipated to show a 0.2% growth and core inflation yearly is expected to remain at 3.4%. The S&P500 topped 5600 points for the first time overnight and closed with a gain of 1.02% for a seventh straight day of gains and record closes. The Nasdaq added 1.18% on Wednesday to also close at a record high and the Dow Jones overturned its recent slump to close higher. Taiwan Semiconductor stock rose 3.5% after revenue from April to June beat Wall Street estimates while AI darling Nvidia rose 2.7%.

Across the European region markets closed higher on Wednesday after a shaky start to the week with the STOXX 600 rising 0.93% at the end of the midweek session, while Germany’s DAX added 0.94%, the French CAC rose 0.86% and, in the UK, the FTSE100 ended the day up 0.66%.

Asia markets closed mostly higher on Wednesday following the release of key inflation data out in the region. Japan’s Nikkei closed at a fresh record high as corporate goods price index data rose 2.9% in June from a year earlier which met economists’ expectations. Hong Kong’s Hang Seng was flat on Wednesday and South Korea’s Kospi index posted a slight gain at the session’s end.

Despite a strong night on Wall Street on Tuesday, the local market fell 0.16% on Wednesday as the miners weighed on the key index tracking the declining price of iron ore. Communications services stocks rose 1.46% on Wednesday to offset some of the heavy losses among the miners while consumer staples and financial stocks also closed the day in positive territory.

Incitec Pivot (ASX:IPL) shares fell 1.2% after the company ended negotiations with Indonesia’s PT Pupuk Kalimantan Timur for the sale of its fertilisers business. Bell Financial Group (ASX:BFG) shares rallied on Wednesday after announcing the expectation of a 47% rise in first-half PBT to $23.8 million. Immune-oncology company Imugene (ASX:IMU) jumped 6% on Wednesday after announcing it has dosed its first patient in its trial for bile tract cancers.

What to watch today: 

• Ahead of Thursday’s session on the ASX the SPI futures are anticipating the ASX200 to open the day up a sharp 0.94% following Wall Street’s record rally overnight.
• On the commodities front this morning oil is trading 1.26% higher at US$92.43/barrel, gold is up 0.34% at US$2371.97/ounce and iron ore is up 0.45% at US$110.51/tonne.
• The Aussie dollar has modestly strengthened overnight to buy US$0.67, 109.09 Japanese Yen, 52.61 British Pence and NZ$1.11. 

Trading Ideas: 

• Bell Potter has increased the 12-month price target on Genetic Signatures (ASX:GSS) from 75cps to $1.10 and maintain a speculative buy rating on the specialist molecular diagnostics company following the receipt of first FDA clearance for the company being a transformational milestone, allowing commercialisation into the USA. The FDA-cleared test, called the ‘Gastrointestinal Parasite Detection Kit’ is differentiated from US competitors by its broader coverage of 8 pathogen targets compared to only 3-4 covered by existing multiplex kits. Bell Potter sees first sales in the US are expected in 1HFY25.
• And Trading Central has identified a bullish signal on Perseus Mining (ASX:PRU) following the formation of a pattern over a period of 23-days which his roughly the same amount of time the share price may rise from the close of $2.51 to the range of $2.72 to $2.76 according to standard principles of technical an

The S&P500 and the Nasdaq both closed at all-time highs ahead of inflation data and second-quarter earnings reports. The S&P500 is coming off its fourth positive eek in the last give amid ongoing optimism that easing inflation could lead to the Fed interest rate cuts. The index closed 0.1% higher overnight, while the tech-heavy Nasdaq gained 0.28% and the Dow Jones closed slightly lower, down 0.08%. 

It was a choppy session locally yesterday, with the ASX200 closing in the red, down 0.76%, as materials and energy stocks weighed down on the market. 

What to watch today:

• The ASX200 is set to open higher this morning, with the SPI futures suggesting a rise of 0.22% at the open. 
• In economic data, Westpac’s consumer confidence data will be out today, forecast to fall 0.3%. The benchmark current sits at 83.6 in June, far from the neutral level of 100 as fiscal support measures have been insufficient to ease worries of high inflation and heightened interest rates. Also today, NAB’s business confidence data will be released, also forecast to decline. 
• In commodities, 
  • Crude oi is trading more than 1.4% lower at US$82.25 per barrel, extending the pullback from the over-two-month high of $84 hit on July 4th, with short-term supply threats a concern. 
  • The price of gold is down more than 1.3% at $2,359.16 an ounce, taking a pause from the sharp rally that was led by expectations that the Federal Reserve could cut interest rates in September, following the soft US jobs data released last week.
  • And iron ore is also trading in the red, down 1.55% to US$111.31 per tonne, pulling back from an over one-month high as a four-day rally triggered profit taking. 

Trading Ideas:

• Bell Potter have downgraded their recommendation on IGO Limited (ASX:IGO from a Hold to a Sell, and have lowered their 12-month price target from $7.60 to $5.15. at it’s current price of $5.70, this is down 9.6% in a year. 
• And Trading Central have identified a bearish signal in LGI Limited (ASX:LGI) indicating that the stock price may fall from the close of $2.84 to the range of $2.71 to $2.75 over 34 days, according to the standard principles of technical analysis. 

Favourable jobs data boosted Wall St to a positive finish on Friday investor optimism of rate cuts out of the Fed gained further traction. The S&P500 notched another record close, ending the day up 0.54%, while the tech-heavy Nasdaq jumped 0.9% and the Dow Jones ended the day up 0.2%. Nonfarm payrolls for June saw 206,000 jobs added to the economy but the U.S. unemployment rate ticked up to 4.1% which was higher than economists’ expectations and indicates further loosening of the tight U.S. labour market.

Over in Europe, markets closed mixed as investors assessed the outcomes of key parliamentary elections in the region. The STOXX 600 fell 0.22%, Germany’s DAX gained 0.14%, the French CAC fell 0.26% and, in the UK, the FTSE100 ended the day down 0.45% as investors responded to the result of the UK’s general election where the opposition Labour Party won a vast majority, unseating the Conservatives after 14-years.

Across the Asia markets on Friday, it was a mixed session as key economic data weighed on equities markets. South Korea’s Kospi Index rose 1.32% on Friday, while Hong Kong’s Hang Seng fell 1.13%, China’s CSI lost 0.43% and Japan’s Nikkei fell 0.49% from recent record highs after household spending for May unexpectedly dipped 1.8% in real terms for May which fell well short of economists’ expectations of a 0.1% rise.

Locally on Friday the ASX200 fell 0.1% in a quiet session however the key index still posted a 0.7% gain for the week as coal and gold stocks boosted the ASX200 higher. Miners weighed on the key index on Friday amid the sliding price of iron ore and the big banks each posted a decline too.

Healthcare stocks offset some of the heavy losses on Friday with CSL, ResMed and Cochlear each ending the day in positive territory.

What to watch today:

• Ahead of the first trading session of the new trading week, the SPI futures are anticipating the ASX to open the day down 0.14%.
• On the commodities front this morning, oil is down 0.17% at US$83.24 per barrel, gold is down 0.2% at US$2386.04 per ounce and iron ore is down 1.55% at US$111.31 per tonne.
• The Aussie dollar has strengthened to buy US$0.67, 108.41 Japanese Yen, 52.70 British Pence and NZ$1.10.

Trading Ideas:

• Bell Potter has initiated coverage on Percheron Therapeutics (ASX:PER) with a speculative buy rating and a price target of 14cps with the analyst saying it is a high risk, high reward outlook for the company. Percheron is an Australian biotechnology company seeking to develop ATL 1102 for the treatment of Duchenne Muscular Dystrophy, a degenerative neuromuscular disorder caused by a mutation in the gene responsible for the production of dystrophin. The company’s next catalyst is the release of headline data from the phase 2b clinical trial due in 2HCY24.
• Trading Central has identified a bearish signal on Treasury Wine Estates (ASX:TWE) following the formation of a pattern over a period of 23-days which is roughly the same amount of time the share price may fall from the close of $12.25 to the range of $10.70 to $11.00 according to standard principles of technical analysis.

The AI revolution is upon us, driving innovation and progress at an unprecedented pace. Explore the growing water demands of AI and the impact it has on utilities. Plus, delve into potential investment opportunities within the utilities sector that are poised to benefit from this trend. 

In this week’s wrap, Grady covers: 

• (0:10): how AI could reshape the utilities sector 
• (2:48): why AI’s hidden energy demands could threaten the grid 
• (3:50): the ASX-listed stocks benefiting from AI
• (4:45): how the ASX200 performed this week so far
• (5:44): the most traded stocks & ETFs by Bell Direct clients
• (6:12): economic news items to watch out for next week. 

US equities extended the bull market run on Wall Street overnight in a shortened session. Trading volume was muted with the New York Stock Exchange closing early a 1pm and will be closed tonight for Independence Day. The S&P500 and the Nasdaq both closed at record highs, with investors looking past soft economic data. The S&P500 gained 0.5%, while the Nasdaq closed 0.88% in the green, as mega cap tech names rallied, including Tesla and Nvidia. 

European markets rallied with all major benchmarks closing in the green ahead of two national parliamentary elections, with the UK voting on Thursday followed by France on Sunday. 

After a negative run last week, the STOXX600 has been volatile in July so far. The index closed 0.8% higher, with most sectors in the green, primarily lead by mining stocks. The German DAX up 1.16%, Fance’s CAC up 1.24% and the FTSE 100 advanced 0.6%. 

After a choppy session on the ASX200 yesterday, the key index posted a 0.28% gain at the closing bell, as investors weighed unfavorably strong retail sales data against a tech rally, prompted by the Nasdaq hitting a record high the prior trading session. Retail sales data came in at a rise of 0.6% for May, which is significant from the 0.1% increase reported in April and well above economist expectations. The data, however, wasn’t favorable for retail companies, as it was due to heavy discounting to move inventory levels as opposed to profit making on an earnings front. Building permit data in Australia for May was also out yesterday, up 5.5%, again above expectations. Both readings show the RBA’s case at taming inflation remains a difficult task as these drivers of inflation remain high. 

What to watch today:

• Our local market is set to open higher this morning, with the SPI futures suggesting a 0.94% rise at the open. 
• In economic data, balance of trade data for May will be out today. Australia’s trade surplus on goods widened to $6.55 billion in April, from a downwardly revised $4.84 billion in the previous month, surpassing market forecasts. 
• In commodities, 
  • Crude oil is rallying, up 1.05% at US$83.68 per barrel, holding close to a two-month high amid lingering concerns about lower supply. 
  • The price of gold is up more than 1.1% to US$2,357.71 an ounce, hovering at its highest price in a month due to the drop in the US dollar and Treasury yields. 
  • And iron ore is trading 2.15% higher at US$110.32 per tonne, rising for the fourth straight session and hitting a one-month high amid an improving demand outlook in top consumer China. 

Trading Ideas:

• Bell Potter maintains a Speculative Buy rating on Chalice Mining (ASX:CHN) and have increased their valuation from $5.00 to $5.15. At CHN’s current share price of $1.22, this implies over 100% share price growth in a year. 
• Trading Central have identified a bullish signal in NRW Holdings (ASX:NWH) indicating that the stock price may rise from the close of $3.09 to the range of $3.34 to $3.40 over 7 days, according to the standard principles of technical analysis.