Between the Bells

Wall St closed mixed overnight as the Dow Jones ended a four-day winning streak, down by 0.13%. The S&P 500 and the tech-heavy Nasdaq both finished marginally higher, up 0.12% and 0.07% respectively.

In terms of US shares, Walmart dropped more than 7% after the company offered weak guidance for the current quarter. And Palo Alto Networks also lost 6% after issuing a poor forecast on billings.

Over in Europe, markets closed lower following a reduction in positive sentiment. The STOXX600 closed 0.7% lower, with most sectors ending the trading session in the red. Losses were led by oil and gas stocks with a 2.7% loss following weaker oil prices. Germany’s DAX gained 0.24% overnight, the French CAC dropped 0.57% and over in the UK the FTSE100 ended the day just over 1% in the red.

Locally yesterday, the ASX200 closed Thursday’s session down 0.67% with the energy and information technology sectors leading losses by 1.19% and 1.02% respectively. This was slightly offset by the utilities sector which saw a 0.59% increase by close of market yesterday.

What to watch today:

• The Australian share market is set to open lower, with the SPI futures suggesting a fall of 0.1% at market open this morning.
• On the commodities front,
  • Oil is down 5.03% to US$82.72/barrel following lower demand and eased concerns of scarce supply. 
  • Gold is up 1.14% to US$1981/ounce and iron ore is trading flat at US$133/tonne.

Trading Ideas:

• Bell Potter has maintained a buy rating on Australian Agricultural Company (ASX:AAC) and has increased its price target by $0.05 to $1.90. The buy rating is maintained as AAC continues to demonstrate growth in through the cycle returns as the revenue shifts from cattle to meat.
• And Trading Central has identified a bullish signal on Myer Holdings (ASX:MYR), indicting that the stock price may rise form the close of $0.54 to the range of $0.59-$0.61, on a pattern formed over 42 days, according to the standard principles of technical analysis.

Wall St closed the trading session higher, following the release of promising inflation data. The S&P 500 rose 0.16%, the tech-heavy Nasdaq gained 0.07% and the Dow Jones traded 0.47% higher on Wednesday.

The US treasury yield increased by 9 basis points, following its 18-basis point fall on Tuesday.

In terms of US shares, following the release of better-than-expected results, Target’s share price increased by 18% with apparel company VF also adding 15%.

Over in Europe, markets closed higher overnight following the release of key data from China and the US. The STOXX600 rose 0.4%, led by technology stocks which gained 2.2% with the majority of other sectors ending the trading day in the green. Germany’s DAX added 0.86%, the French CAC ended the day 0.33% higher and over in the UK, the FTSE100 went up 0.62%.

Locally yesterday, the ASX200 ended the trading day up 1.42% with all but the energy sector ending positive. The biggest gains were made by the real estate and information technology sector which ended the day 4.58% and 3.35% higher respectively.

What to watch today:

• The Australian share market is set to open lower, with the SPI futures suggesting a fall of 0.11% at the open this morning.
• In terms of economic data,
   
  • At 10:30 this morning Australian unemployment data is set to be released with a consensus of a 0.1% increase from its previous result of 3.6%.
• On the commodities front, 
  • Oil is down 2.37% to US$76.41/barrel,
  • Gold is down 0.09% to US$1961/ounce
  • And iron ore is up 1.92% to US$133/tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Life360 (ASX:360) and has increased its 12-month price target by $0.25. The buy rating is maintained by Bell Potter as positive results in Q3 have helped increase the price target to $11.25, which is a greater than 15% premium to the previous share price, hence the buy rating is maintained.
• And Trading Central has identified a bullish signal on Evolution mining (ASX:EVN), indicating that the stock price may rise form the close of $3.78 to the range of $4.35-$4.50 on a pattern formed over 30 days, according to the standard principles of technical analysis.

Wall Street’s recent rally extended into Tuesday’s session as investors welcomed the latest inflation data that came in at an annual rate of 3.2% which was below economists’ expectations of 3.3% and raises investors’ hopes that the Fed’s rate hike campaign is coming to an end. The Dow Jones rose 1.7%, the S&P500 added 2.1% and the tech-heavy Nasdaq jumped 2.5%. The 10-year US Treasury Yield also tumbled below 4.5% following the release of the soft inflation report.

Banks including Bank of America and Wells Fargo rallied on hopes that the US economy could avoid a recession all together.

Home Depot shares lifted nearly 6% on Tuesday following the release of better-than-expected third-quarter earnings results.

Over in Europe, markets also welcomed the cooler-than-expected US inflation data, as markets in the region closed higher on Tuesday. The STOXX600 rose 1.4%, led by retail stocks rising 3.1% while oil and gas stocks fell 0.2%. Germany’s DAX rose 1.76% on Tuesday, the French CAC added 1.4% and, in the UK, the FTSE100 lifted 0.2%.

Locally yesterday, ASX closed 0.83% higher on Tuesday, despite the release of Westpac consumer confidence data for November and NAB business confidence data for October both showing declines against economists’ expectations of respective rises. NAB Business confidence data for October fell a further 2 points despite business conditions edging up, driven by higher sales and profitability while employment eased. This reading indicates businesses remain cautious despite the resilience we are seeing in business conditions.

Westpac consumer confidence for November also fell 2.6% in data out yesterday to 79.9 points indicating consumers are pessimistic following the RBA’s latest rate hike for November placing additional financial pressures on Aussie households.

Energy stocks did most of the heavy lifting on Tuesday with the sector closing 2.54% higher, boosted by Beach Energy rising 5.6%.

Commonwealth Bank of Australia rallied just shy of 1% on Tuesday after Australia’s largest bank released a first quarter trading update including unaudited statutory NPAT up 1% on the PCP to $2.5bn. Operating income was flat though for CBA and operating expenses were up 3%, reflecting higher costs from wage inflation and higher amortisation.

Big bank earnings over the last weeks have indicated strength and resilience by the big four in FY23 and the start of FY24, with revenues boosted by the rising interest rates and the peak of respective Net Interest Margins. Multiple signs have suggested though that future revenue and earnings are likely to ease including slowing mortgage and business credit growth across the board, rising operating costs due to inflation, higher switching by customers between all accessible banks both big and small, and the net interest margin peaking during FY23.

What to watch today: 

• Ahead of the local trading session here in Australia, the SPI futures are anticipating the ASX to open the midweek session up 1.35% following the strong rally on global markets overnight.
• On the commodities front this morning, oil is trading 0.74% higher at US$78.83/barrel, gold is up 0.85% at US$1962.52/ounce and iron ore is flat at US$130.50/tonne.
• AU$1.00 is buying US$0.65, 97.87 Japanese Yen, 52.03 British Pence and NZ$1.08.

Trading Ideas: 

• Bell Potter has decreased the 12-month price target on Chalice Mining (ASX:CHN) from $7.10 to $5.40 and maintain a speculative buy rating on the exploration company following the release of an update from ongoing hydrometallurgical test work programs the company has been undertaking for its 100%-owned Gonneville deposit. The results demonstrate the potential for higher recoveries to be achieved compared with those assumed in the scoping study released in August this year. The decline in price target is due to lower palladium and platinum price for

Wall St had a mixed start to the trading week with the Dow Jones adding 0.16% as traders look past the US outlook cut from Moody’s. The S&P 500 and the tech-heavy Nasdaq finished the day 0.08% and 0.22% lower respectively.

In terms of US stocks, DaVita, Insulet and Henry Schein all gained over 7% each, with Boeing also adding 4% after Emirates announced a $52 billion order for aircraft, helping lift the Dow.

Over in Europe, markets closed higher overnight with the STOXX 600 closing 0.7% higher with travel and leisure stocks leading the way, adding 1.7%. Germany’s DAX gained 0.73%, the French CAC added 0.6% and over in the UK, the FTSE100 ended the trading session 0.89% in the green.

Locally yesterday, the ASX200 fell 0.40% with all but the utilities sector finishing in the red. Losses were led by the energy sector and the real estate sector which lost 0.88% and 0.56% respectively.

What to watch today: 

• The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.86% at the open this morning.
• In terms of economic data today,
  • Westpac consumer confidence change will be released at 9:30am this morning with a forecast of a 0.7% lowering from the 2.9% in October. 
  • And later on tonight, over in the US, core inflation data is set to be released with a consensus to maintains its previous result of 4.1%.
• On the commodities front this morning,
   
  • Oil is up 1.60% to 78 US dollars and 40 cents a barrel with OPEC increasing its 2023 global oil demand growth forecast to 2.46 million barrels per day. 
  • Gold is up half a percent to 1946 US dollars an ounce and iron ore is up 0.38% to 130 US dollars and 50 cents a tonne. 

Trading Ideas:

• Bell Potter maintains a buy rating on Elders (ASX:ELD) and has increased its price target to $8.35. The buy rating is maintained by Bell Potter following the release of FY23 results with underlying NPAT ahead of expectations at $103.7m, raising NPAT forecasts in FY24 by 13% and 15% in FY25.
• And Trading Central has identified a bullish signal in Grange Resources (ASX:GRR), indicating that the stock price may rise from the close of $0.51 to the range of $0.53-$0.55, on a pattern formed over 29 days, according to the standard principles of technical analysis.

US equities closed with a second week of gains, with the Dow Jones up nearly 400 points or 1.15%, the S&P500 up 1.56% and the tech-heavy Nasdaq rallying 2.05% higher, after Microsoft leap to all-time highs during Friday’s session. Equities recovered as treasurer yields stabilised. 

All European benchmarks ended the trading week in the red. The STOXX 600 closed Friday 1% lower, with food and beverage stocks leading the losses. All sectors were in negative territory, except for oil and gas stocks. 

What to watch today:

• The Australian market is set to start the week higher, ahead of key economic indicators out this week. The SPI futures are suggesting a rise of 0.34% at the open this morning. 
• In commodities, 
  • Crude oil is trading almost 2% higher at US$77 per barrel, mirroring the broader market as equities rebounded on Friday. 
  • Gold is more than 1% lower, below US$1,950 an ounce, weighed down by the strong US dollar and Treasury yields, as the US market anticipates a fall in US consumer sentiment, as well as higher inflationary expectations. 
  • And iron ore has advanced to US$130 per tonne, its highest level in over 7-months, amid expectations of robust demand and risks to supply. 
• And today watch the share price movements of ANZ (ASX:ANZ), Elders (ASX:ELD) and Incitec Pivot (ASX:IPL) as they’re set to release their earnings reports today. 
• Also watch Macquarie Group (ASX:MQG), which is set to go ex-dividend today. This may see MQG’s share price fall, as investors take their profits. 

Trading Ideas:

• Bell Potter maintains a Buy rating on Life360 (ASX:360) ahead of the release of the companies Q3 results on Wednesday this week. Life360 provides a market leading app for families with features that range from communications to driving safety and location sharing. Bell Potter continue to forecast 2023 revenue and adjusted EBITDA of US$310.8 million and US$13.9 million, consistent with or slightly above guidance, which they expect to be reiterated in the Q3 report. Their price target remains unchanged at $11.00, and at 360’s current share price of $7.96, this implies 38% share price growth in a year. 
• Bell Potter also have a Speculative Buy rating on Avita Medical (ASX:AVH), who develop a range of respiratory and regenerative products. Their valuation is $6.85, which at AVH’s current share price of $3.71, implies 84.6% share price growth in a year. 

The uranium market over the last month has seen increasing volatility, mostly led by demand across the nuclear fuel sector and limited near-term supply. Globally, the share prices of uranium miners have rallied, with smaller miners outperforming the large-cap uranium stocks. Considering this, we explore the four ASX-listed companies favoured by Bell Potter in the uranium market.

In this week's wrap, Sophia covers:

• (0:12) drivers of the uranium market’s increasing volatility
• (1:23) Boss Energy’s (ASX:BOE) Speculative Hold recommendation
• (1:56) Paladin Energy’s (ASX:PDN) focus on development
• (2:11) Deep Yellow’s (ASX:DYL) Speculative Buy rating
• (2:44) Alligator Energy’s advancement with four projects
• (3:26) the best performing stocks in the ASX200
• (3:52) the most traded stocks & ETFs by Bell Direct clients
• (4:19) five economic news items to watch out for.

Read the transcript here

Wall St closed lower overnight as the S&P 500 fell for the first time in nine trading sessions, losing 0.81%. The Dow Jones and tech-heavy Nasdaq followed suit losing 0.65% and 0.94% respectively overnight. Stocks hit session lows following Federal Reserve Chair, Jerome Powell suggesting that more work may need to be done to lower inflation.

In terms of US shares, Disney rose 7% after reporting better-than-expected profit whist, software design company Arm dipped 6% after its first quarterly report as a public company.

European markets closed higher overnight following a series of robust corporate earnings. The STOXX600 closed 0.8% higher, led by industrials gaining 2.5%. Germany’s DAX closed 0.81% higher, the French CAC ended the trading session 1.13% in the green and over in the UK the FTSE100 gained 0.73%.

Earnings played a significant role in European market sentiment, with AstraZeneca up 2.6%.

Locally yesterday, the ASX 200 closed 0.28% higher, led by a close to 1% increase from both the health and communication services sectors. However, this was heavily offset by a 4.83% drop in the information technology sector.

What to watch today: 

• The Australian share market is set open slightly lower, with the SPI futures suggesting a fall of 0.04% at the open this morning.
• In terms of economic data, at 10:30 this morning, The RBA will make a statement on monetary policy.
• And on the commodities front today,
  • Oil is up 0.37% to 75 US dollars and 61 cents a barrel, following a 2% price fall on Wednesday, its lowest since mid-July. 
  • Gold is up 0.44% to 1958 US dollars an ounce and iron ore is up 0.79% to 128 US dollars a tonne with China expected to offset the debt crisis for the residential construction sector, maintaining active purchasing activity for iron ore inputs.

Trading Ideas:

• Bell Potter maintains a speculative buy rating on ikeGPS Group (ASX:IKE) and has held on to its valuation of $0.88. The speculative buy rating is maintained by Bell Potter due to the medium and long-term outlook opportunity, underpinned by a forecasted investment of 410 billion US dollars into the North America 5G, fibre and rural broadband rollout.
• And Trading Central has identified a bullish signal on Car Group (ASX:CAR), indicating that the stock price may rise from the close of $29.37 to the range of $31.90-$32.60 on a pattern formed over 59 days, according to the standard principles of technical analysis.

US markets saw little change overnight, with the Dow Jones down 0.12%, while the Nasdaq gained 0.08% and the S&P500 ended 0.1% higher. The S&P500 gained for the eight straight day, making this the longest win streak in 2 years. 

European markets closed higher, with the STOXX 600 recovering earlier losses of around 0.3%. The release of earnings results was the key driver share price movements in Europe overnight, with Credit Agricole, Adidas, ABN Amro and Marks and Spencer all reporting before the bell. 

What to watch today:

• Our local market is set to open higher, with the SPI futures suggesting a rise of 0.36% at the open this morning. 
• In commodities, 
  • The price of crude oil has sharply dropped, trading over 2% lower at the time of recording, at around US$75 per barrel. This is the lowest level since the 20th of July this year. The fall was prompted by emerging demand concerns from the largest consumers, the US and China. And adding to worries about global demand is the weaker-than-expected Chinese exports in October. So, keep watch of ASX energy producers today. 
  • The gold price is also lower, extending its decline for the third session in a row, pressures by the higher US dollar, 
  • While iron ore is in the green, sitting at its highest level in 7-months at US$127 per tonne. 
• Today, watch the share price movements of NAB, with the bank set to release its full year results. Goldman Sachs analysts are expecting cash earnings up to 11% on the prior corresponding period, ahead of consensus. Goldman Sachs also are expecting a final dividend of 83 cps, in line with consensus. 
• And companies that are set to hold their AGMs today include Amcor (ASX:AMC), De Grey Mining (ASX:DEG), Nine Entertainment (ASX:NEC) and Star Entertainment (ASX:SGR). 

Trading Ideas:

• Bell Potter maintains a Buy rating on Adacel Technologies (ASX:ADA) a global provider of simulation and control systems from the civil aviation and defence sectors. Their core products are air traffic control simulation systems and air traffic management automation systems. Bell Potter have increased their price target on the stock by 13% to $0.90. At ADA’s current share price of $0.78, this implies 15.4% share price growth in a year. 

Wall St ended the trading day higher again across the key indices with the S&P500 up 0.28%, rising for a 7th consecutive session, while the Dow Jones rose 0.17% and the tech-heavy Nasdaq ended the day 0.9% in the green.

Tech stocks lead the charge on Tuesday due to a pullback in treasury yields, making equities more attractive to investors, with Microsoft, Apple and Amazon each up over 1% on Tuesday.

Over in Europe, third-quarter earnings results weighed on markets in the region causing each to close mostly lower on Tuesday. The STOXX600 fell 0.3% as oil and gas stocks fell 1.85% after Saudi energy giant Aramco reported a steep decline in profit, while financial services stocks rose 0.9%. Germany’s DAX rose 0.11% on Tuesday, while the French CAC fell 0.4%, and, in the UK, the FTSE100 fell 0.1%.

The ASX closed 0.3% lower on Tuesday after the widely expected 25-basis point rate hike was handed down by the RBA in a bid to combat the nation’s sticky inflation under new RBA governor, Michele Bullock. Financial stocks weighed on the key index, with the sector sliding 1.04% while energy stocks fell 0.8% at the closing bell on Tuesday. While the market was factoring in the rate rise before yesterday, the slide in the key index came after RBA governor, Michele Bullock, left the possibility for further rate hikes open to ensure inflation which is currently at 5.4%, returns to the target range of 2-3% by December 2025.

What to watch today: 

• The Australian share market is set to open flat this morning at market open.
• On the commodities front this morning,
  • Oil is down 4.14% to US$77.48 a barrel following concerns over China’s report of a worse-than-expected drop in exports in October. 
  • Gold is down 0.46% to US$1968 an ounce and iron ore is trading flat at US$126.50 cents a tonne.

Trading Ideas:

• Bell Potter has initiated coverage on Universal Store Holdings (ASX:UNI) and has recommended a buy. The buy rating is initiated as Universal’s higher margin sales from the majority private label sales will become a major driver of margin improvement and earnings growth.
• And Bell Potter maintains a speculative buy rating on Matrix Composites & Engineering (ASX:MCE) and has slightly increased its price target to 34 cents a share. MCE is exposed to a protracted capital expenditure up-cycle across the global off-shore energy sector. This view is reinforced by record-high order backlogs and upgraded medium-term outlooks reported by offshore energy service providers.

Well US equities closed slightly higher overnight with all three major benchmarks in the green, with the Nasdaq marking its longest positive streak since January. 

European markets closed lower, with the STOXX 600 down 0.2%, as sector movements were muted. Only oil and gas stocks gained. 

What to watch today:

• The Australian share market is set to open lower this morning, with the SPI futures suggesting a 0.17% decline. 
• In economic data, at 2:30pm today the RBA will announce its next interest rate decision. After four months of holding the cash rate steady, today interest rates are expected to lift from 4.1% to 4.35%, off the back of higher-than-expected quarterly inflation and strong spending figures. 
• Looking at commodities, 
  • Oil is strong, recovering losses from the previous session following top crude producers Saudi Arabia and Russia, announcing that they’ll maintain extra voluntary oil output cuts until the end of the year.
  • Gold is in the red has investors weigh the latest economic data against geopolitical risks. 
  • And iron ore is trading at its highest level in seven months, amid hopes that economic stimulus from the Chinese government will create demand for resources. 

Trading Ideas:

• Bell Potter maintains a buy rating on Cobram Estate Olives (ASX:CBO) a vertically integrated producer and marketer of olive oil products with operations in Australia and the US, and export customers in approximately in 17 countries. Their 12-month price target is $1.70 and at CBO’s current share price of $1.29, this implies 32% share price growth in a year. 
• And Trading Central have identified a bullish signal in Beacon Lighting Group (ASX:BLX), indicating that the stock price may rise from the close of $1.84 to the range of $2.03 to $2.07 over 18 days, according to the standard principles of technical analysis.