Between the Bells

The local market followed in Wall Street’s footsteps, with the key index closing Thursday’s session 0.64% lower as 8 of the 11 sectors closed the day in the red. A sharp sell-off in materials stocks weighed on the market today following strong than expected unemployment data out in Australia and the US Fed’s raising America’s cash rate by 50-basis points. Consumer staples stocks outperformed the market today as investors shifted into sectors that perform well during a high interest rate, recessionary environment.

The winning stocks today were led by Blackmores (ASX:BKL) lifting almost 8% despite no price sensitive news out of the company today, while New Hope Corporation (ASX:NHC) added 4.66% and Whitehaven Coal (ASX:WHC) added 3.9% today. And on the losing end of the market today, Pilbara Minerals (ASX:PLS) fell 11.43% after the lithium miner announced results of its 12th spodumene concentrate auction via its digital BMX platform with the company selling a combined total of 10,000dmt at an average price of $7552 per dmt. Investors also sold out of Core Lithium (ASX:CXO) and Liontown Resources (ASX:LTR) today as the price of lithium came under pressure.

The most traded stocks by Bell Direct clients today were Arafura Rare Earths (ASX:ARU), New Hope Corporation (ASX:NHC) and Pilbara Minerals (ASX:PLS).

On the commodities front, crude oil is down 1.13% at US$76.39 per barrel, uranium is flat at US$48.35 per pound, gold is down almost 1% at US$1,791 per ounce and iron ore is trading 0.45% lower at US$110 per tonne.

The Aussie dollar is buying 68 US cents, 92.61 Japanese Yen, 55.22 British Pence, and NZ$1.06.

Economic data released today included Australia’s unemployment rate held steady at 3.4% for November which was above forecasts of a decline to 3.3% while the economy added 64,000 jobs for the month, in another sign the tight labour market remains resilient despite the best efforts of the RBA.

US markets turned lower on Wednesday after the Federal Reserve raised the US cash rate by a further 50-basis points to the targeted range between 4.25-4.5%, the highest level in 15-years. The rate hike comes against signs of cooling inflation in the region with CPI for November easing to the lowest level since December last year in data out yesterday. Stocks came under pressure as markets factored in expectations that interest rates in the world’s largest economy would peak at 4.9% in the Spring.

The Dow Jones fell 0.18%, the S&P500 lost 0.22% and the Nasdaq fell 0.16%.

What to watch today:

• Over in Europe, markets slipped on Wednesday as investors globally responded to new inflation readings out of the U.S. and looked ahead to the Fed’s cash rate decision. The STOXX600 closed flat, Germany’s DAX lost 0.26%, the French CAC dropped 0.21% and, in the UK, the FTSE100 fell 0.09%. Monetary policy updates from the EU, UK and Swiss central banks will be announced today.
• On the commodities front crude oil is up 3.05% at US$77.69/barrel, uranium is down 0.72% at U.S$48.35/pound, gold is flat at US$1810/ounce and iron ore is down 2.64% at US$110.50/tonne.
• The Aussie dollar is buying 69 US cents, 92.83 Japanese yen, 55.45 British pence and 1 New Zealand dollar and 6 cents.
• Ahead of the local trading session in Australia, the SPI futures are anticipating the ASX to open almost half a percent lower following the global sell-off overnight.
• Taking a look at economic data out today, Australia’s unemployment rate is out at 11:30am Australian eastern daylight time, with some economists forecasting a drop to 3.3% for November from 3.4% in October.

Trading Ideas:

• Trading Central has identified a bullish signal on Bowen Coking Coal (ASX:BCB) following the formation of a pattern over the period of 36-days which is roughly the same amount of time the share price may rise from the close of $0.29 to the range of $0.33-$0.35 according to standard principles of technical analysis.
• Trading Central has identified a bearish signal on Autosports Group (ASX:ASG) following the formation of a pattern over a period of 11-days which is roughly the same amount of time the share price may fall from the close of $1.95 to the range of $1.78-$1.82 according to standard principles of technical analysis.

The local market took lead from Wall Street today, following softer-than-expected inflation data out in America, easing investor fears of further aggressive rate hikes to come from the Fed. The ASX closed the midweek session up 0.67% buoyed by a surge in utilities stocks.

Gold miner St Barbara (ASX:SBM) soared 20% today, after the company announced the successful completion of the bookbuild for the conditional placement issuing approximately 229.2m new Genesis Minerals (AXS:GMD) shares to raise $275 million to facilitate the merger of St Barbara and Genesis Minerals. Under the planned merger, St Barbara (ASX:SBM) and Genesis (ASX:GMD) will merge their Leonora District operations in WA to form a new gold company, Hoover House. St Barbara’s other assets will be demerged to form a new junior gold company called Phoenician Metals which focuses on the long-term value of a portfolio including the Atlantic and Simberi operations.

The winning stocks of the session were led by St Barbara (ASX:SBM) adding almost 14% at the closing bell, Block (ASX:SQ2) rallying 8.15% and Chalise Mining (ASX:CHN) adding 6.41%. And on the losing end, Imugene (ASX:IMU) tanked 5.13%, while Endeavour Group (ASX:EDV) fell 4.33% and Bendigo and Adelaide Bank (ASX:BEN) fell 3.31%.

The most traded stocks by Bell Direct clients were Telstra Corporation (ASX:TLS), Arafura Rare Earths (ASX:SRU), Newcrest Mining (ASX:NCM).

On the commodities front crude oil is trading 0.2% lower at US$75.22 per barrel, gold is flat at US$1,809 per ounce, and iron ore is down 2.64% at US$110.50 per tonne.

Aussie dollar is buying 68 US cents, 92.65 Japanese Yen, 55.49 Japanese Yen and NZ$1.06.

Wall St had a positive session on Tuesday as investors digested softer-than-expected inflation data out of the US for November. Annual inflation data released for November showed the US inflation rate slowed for a fifth straight month to 7.1%, the lowest level since December last year, and below forecasts of 7.3%. For the month, inflation rose just 0.1% where the markets had been expecting a rise of 0.3%. The Dow Jones pared back earlier gains to close the session up 0.1% as investors look ahead to the FOMC meeting and Fed’s rate hike out tomorrow with the expectation of another 50-basis point rate hike. The S&P500 added 0.5% while the tech-heavy Nasdaq rallied 0.65%.

What to watch today:

• Over in Europe it’s been a turbulent start to the week with markets as investors in the region are less optimistic about the outcome of the Fed’s rate hike decision and the rate decision out of the Bank of England, European Central Bank and Swiss National Bank all revealed on Thursday. On Tuesday though, markets rallied after US inflation data came in lower than forecasted.
• The STOXX600 closed 1.1% higher, Germany’s DAX rose 1.34%, the French CAC added 1.42% and in the UK, the FTSE100 rallied 0.76%.
• In commodities:
  • On the commodities front, crude oil is trading 3.95% higher at US$76.08/barrel, natural gas is up 6.3%, uranium is flat at US$48.70/pound, gold is up 1.57% at US$1809.18/ounce and iron ore is up 1.8% at US$113.50/tonne.
• Taking a look at economic data out today, core inflation data is the UK is out later this evening, while MBA mortgage applications in the US is out late tonight. Tomorrow local investors will be closely eyeing off Australia’s unemployment rate data for November with some economists expecting a decline to 3.3% from 3.4% in October.
• Locally, RBA Governor Philip Lowe is speaking at 9:30am eastern daylight time today at the annual AusPayNet Summit in Sydney.
• The Aussie dollar is buying 69 US Cents, 92.79 Japanese Yen, 55.1 British Pence, and 1 New Zealand Dollar and 6 cents.
• Ahead of the local trading session here in Australia, the SPI futures are anticipating the ASX to open 0.19% higher.

Trading Ideas:

• Bell Potter has initiated coverage of XTEK (ASX:XTE) with a buy rating and a price target of $0.95 as the Australian defence manufacturer of advanced ballistics protection equipment and supplier of cutting edge military technologies is leveraged to the current global trend of rearmament, which is likely to be a central market narrative over the next decade. The company also boasts a strong contract order book with the anticipating of first half revenue in FY23 to be ~$47m based on previously announced material contracts, and $35m in contract backlog from the technology division has XTE on track to exceed $82m in revenue in FY23 which would be another record year for the company.
• Trading Central has identified a bullish signal on DGL Group (ASX:DGL) following the formation of a pattern over a period of 18-days which is roughly the same amount of time the share price may rise from the close of $1.48 to the range of $1.83 - $1.91 according to standard principles of technical analysis.

The local market reversed Monday’s losses to close Tuesday’s session up 0.31% as a rally for technology, industrials and financial stocks boosted the key index into positive territory, while a sell-off in materials stocks pared back strong gains. Tomorrow and Thursday are the sessions investors are most anticipating this week amid the release of US inflation data and the Fed’s latest interest rate hike decision.

Star Entertainment shares came under pressure today as ASIC begins civil penalty proceedings in the Federal Court against 11 current and former directors and executives for alleged breaches of their duties.

Inoviq (ASX:IIQ) shares jumped 15% today after the cancer diagnostic and treatment development company announced positive results from its Ovarian cancer study confirming the utility of the company’s EXO-NET for EV-biomarker discovery and generation of multivariate index assay had over 90% accuracy for the detection of early-stage ovarian cancer.

The winning stocks today were led by Bendigo and Adelaide Bank (ASX:BEN) jumping 6.86% after the company provided a trading update outlining net interest margin improvements to 1.85% post revenue share arrangements YTD, unaudited cash earnings YTD of $245m, up 22% on the PCP and lending balances up 5.2% over the last 12-months. Megaport (ASX:MP1) added almost 6% today and Imugene (ASX:IMU) rallied 5.41% on Tuesday.

And on the losing end of the market, Chalice Mining (ASX:CHN) fell 8.06% as investors respond to the delay of the company’s scoping study, while Champion Iron (ASX:CIA) and Fortescue Metals Group (ASX:FMG) each also lost over 4%.

The most traded stocks by Bell Direct clients on Tuesday were MSL Solutions (ASX:MSL), Bank of Queensland (ASX:BOQ) and BHP Group (ASX:BHP).

On the commodities front, crude oil is up 1.18% at US$74.02/barrel, natural gas is up 1.55%, uranium is flat at US$48.70/pound, gold is flat at US$1782.77/ounce and iron ore is up 1.79% at US$113.50/tonne.

The Aussie dollar is buying 67.47 US cents, 92.85 Japanese Yen, 55 British Pence and 1 New Zealand Dollar and 6 cents.

Westpac consumer confidence data for December out today showed an increase of 3% from a decline of 6.9% in November as investor optimism is boosted by expectations that the RBA’s interest rate tightening cycle is nearing an end.

NAB business confidence on the other hand fell to minus 4 for November from 0 in October amid rising inflation and higher interest rates.

As traders looked ahead to the highly anticipated Federal Reserve meeting and new inflation data, US equities saw a strong session overnight. Stocks jumped back from last week’s steep losses, with a strong rally in the final hour of trade. The Dow Jones added more than 500 pints or 1.5%, the S&P500 up 1.4%, and the Nasdaq up 1.26%. The Fed will begin its two-day meeting tonight and it is widely expected that the Fed will raise rates by half a percentage point when the meeting concludes on Wednesday in the US. 

However, European markets retreated ahead of the Fed’s meeting. The Stoxx 600 closed lower, with mining stocks falling the most, while only oil and gas stocks made gains. Germany’s DAX, France’s CAC and the FTSE 100 all closed in the red. Also, on Thursday we’ll receive monetary policy decisions from the Bank of England, the European Central Bank and the Swiss National Bank. 

What to watch today:

• Following Wall Street’s strong session, the Australian market is set to rise 0.67% at the open this morning, going by the SPI futures. 
• In economic data, today Westpac will release its data on consumer confidence for December at 10:30am and NAB will release its data on business confidence for November at 11:30am AEDT. This data will give us an indication on consumer and business sentiment, considering the impact that inflation and rising interest rates has had on households, finances and the economy. 
• In commodities: 
  • The oil price has sharply rebounded, recovering from the daily lows of around US$70, as optimism about China’s reopening and supply disruptions offset some concerns about a global recession-driven demand downturn. Oil is trading at US$73.48 per barrel, so keep your eye on energy producers such as Santos (ASX:STO). 
  • The price of gold has fallen, ending a four-day advance as the US dollar gained on stronger-than- expected producer price data in the US. So watch gold mining stocks like Regis Resources (ASX:RRL) and Evolution Mining (ASX:EVN). 
  • Iron ore is trading around 1.4% higher at US$111.50 per tonne. 
• The AU$1.00 is buying 67 US cents, 55.39 British Pence, 92.93 Japanese Yen and NZ$1.06. 

Trading Ideas: 

• Bell Potter maintain a BUY rating on Mincor Resources (ASX:MCR) and have lowered their price target from $1.90 to $1.85. At MCR’s current share price of $1.585 this implies 16.7% share price growth in a year. 
• Trading Central have identified a bullish signal in DGL Group (ASX:DGL) indicating that the stock price may rise from the close of $1.48 to the range of $1.83 to $1.91 over 18 days according to the standard principles of technical analysis. 

The ASX started the week in negative territory, closing Monday’s session down 0.45% as investors sharply sold off gold and metals and mining stocks. Investor sentiment has been extremely volatile over the last few weeks amid China’s easing of some COVID restrictions, surprisingly upbeat economic data out of the US and local economic data released that has moved markets especially on the GDP front.

Troubled fintech company Tyro Payments (ASX:TYR) tanked more than 18% today after confirming its separate takeover talks with Potentia Capital and Westpac Banking Corporation have both concluded, as the discussions have not resulted in offers the board feels fairly value Tyro. Origin Energy (ASX:ORG) shares were also sharply sold-off today as investors responded to Prime Minister Anthony Albanese’s plan to place a price cap on domestic coal and gas sales.

Gold miners had a tough start to the week as the price of the precious commodity is trading more than half a percent lower around US$1,787 per ounce. Newcrest Mining (ASX:NCM) fell over 3%, Evolution Mining (ASX:EVN) lost 3.8% and Perseus Mining (ASX:PRU) ended the day down more than 4%.

The winning stocks today were led by BrainChip Holdings (ASX:BRN) jumping 9.38% despite no price sensitive news out of the AI software and hardware technology company today. Megaport (ASX:MP1) and Woodside Energy (ASX:WDS) each also added over 4% and 3.5% respectively today. And on the losing end, Nanosonics (ASX:NAN) tanked 9.92%, Origin Energy (ASX:ORG) fell 7.82% and Silver Lake Resources (ASX:SLR) lost 7.52%.

The most traded stocks by Bell Direct clients today were Warrego Energy (ASX:WGO), Northern Star Resources (ASX:NST), and the BetaShares Australian High Interest Cash ETF (ASX:AAA).

On the commodities front, the price of oil has rebounded as the Keystone pipeline, a key pipeline in North America which links fields in Canada to refiners on the US Gulf Coast, remains shut, on top of easing COVID restrictions in China boosting demand outlook for oil. Crude oil is up almost 1% at US$71.75 per barrel, natural gas is up 10.31% at US$6.89 per MMBtu, coal is up 1.77% at US$402.50 per tonne, uranium is up 0.41% at US$48.70 per pound and iron ore is up 1.36% at US$111.50 per tonne.

The Aussie dollar has weakened to buy 67.79 US cents, 92.80 Japanese Yen, 55.46 British Pence and NZ$1.06.

After the Closing Bell Britain’s trade balance data for October and GDP for October are both released.

The local market took lead from Wall Street on Friday to close the final trading session of the week up 0.52%, led by a strong rally for materials and information technology stocks.

The winning stocks on Friday were led by Champion Iron (ASX:CIA) jumping 5.15% as China’s easing of some COVID-19 restrictions fuelled a rally in the price of iron ore, while Sandfire Resources (ASX:SFR) and BrainChip Holdings (ASX:BRN) each added 4.81% and 4.1% respectively. On the losing end of the market, Novonix (ASX:NVX) fell 4.53%, while Capricorn Metals (ASX:CMM) and Pinnacle Investment Management (ASX:PNI) tanked 4.33% and 3.77% respectively on Friday.

The most traded stocks by Bell Direct clients on Friday were Fortescue Metals Group (ASX:FMG), BHP Group (ASX:BHP) and Core Lithium (ASX:CXO).

Over in the US on Friday, Wall Street reversed again to end the week lower as investors look ahead to key inflation data and the last FOMC meeting which ae both this week. If key CPI data comes out higher-than-expected on Tuesday, the Fed’s may continue the aggressive approach at raising interest rates to tackle the nation’s 40-year high inflation. The Dow Jones fell 0.9%, the S&P500 shed 0.73% and the tech-heavy Nasdaq closed the day down 0.7%.

Over in Europe, it was a green end to the week as investor optimism was boosted by reports of China’s reopening and positive economic outlook. Germany’s DAX added 0.74%, the French CAC rose 0.46% and, in the UK, the FTSE100 rose just 0.06%. Investors in the region also await key decisions out of the Bank of England’s next policy meeting.

What to watch today:

• Ahead of the local trading session, the SPI futures is expecting the ASX to open 0.48% lower ahead of the FOMC meeting and key US inflation data out this week.
• On the commodities front, crude oil is trading 0.62% lower at US$71.02 per barrel, coal is up 1.64% at US$402 per tonne, gold is up 0.44% at US$1,797.04 per ounce and iron ore is up 1.36% at US$111.50 per tonne.
• The Aussie dollar has strengthened to buy 67.69 US cents, 92.94 Japanese Yen, 55.45 British Pence and NZ$1.06.
• On the economic data front today, British GDP data for October is out with the market expecting growth to 0.4% from a decline in growth of 0.6% in September.

Trading Ideas:

• Trading Central has identified a bullish signal on Azure Minerals (ASX:AZS) following the formation of a pattern over a period of 22-days which is roughly the same amount of time the share price will rise from the close of $0.26 to the range of $0.32-$0.34 according to standard principles of technical analysis.
• Trading Central has also identified a bearish signal on Dalrymple Bay Infrastructure (ASX:DBI) following the formation of a pattern over a period of 20-days which is roughly the same amount of time the share price may fall from the close of $2.40 to the range of $2.28-$2.30 according to standard principles of technical analysis.

The Aussie share market lost 1.73% this week (Mon-Thu), as investor fears of a global recession increased and GDP growth data in Australia came in below expectations causing investors to analyse their sector exposures.

In this week's wrap, Grady covers:

• (0:12) Market expectations on consumer spending
• (1:27) The changing outlook for retail companies
• (2:59) Private consumption as a percentage of GDP in Australia
• (3:24) The best performing stocks in the ASX200
• (5:05) The most traded stocks & ETFs by Bell Direct clients 
• (5:30) Three economic news items to watch out for

Wall Street felt some relief on Thursday after new weekly jobless claims in the US ticked higher to 230,000 from 226,000 the week prior in a sign the Fed’s aggressive interest rate hikes are beginning to have an impact on the nation’s tight labour market. The slight uptick in jobless claims underpinned a rally on Thursday that saw the Dow Jones add 0.3%, the S&P500 lift 0.5% and the tech heavy Nasdaq added 0.9%.

Despite the slight relief rally, investors remain focused on the Fed’s FOMC meeting next week where it is expected another 50-basis points.

Over in Europe, markets closed mostly lower again as investor fears of a global recession continued to dominate sentiment across markets in the region. Germany’s DAX added just 0.02%, while the French CAC fell 0.14% and the UK’s FTSE100 lost 0.23%.

What to watch today:

• Ahead of the local trading session the SPI futures is anticipating the ASX to open 0.31% higher buoyed by the rally on Wall St overnight.
• On the commodities front, crude oil continues its decline trading 0.7% lower at US$71.51/barrel, coal is trading almost 1% lower at US$405/tonne, gold is up 0.11% at US$1788/ounce and iron ore is down 1.83% at US$107.50/tonne.
• The Australian dollar has strengthened to buy 67.73 US cents, 92.58 Japanese yen, 55.33 British pence and 1 New Zealand dollar and 6 cents.
• Taking a look at economic data out today, China’s inflation rate data for November is released around midday Australian eastern daylight time, with the market expecting a decline to 1.6% from 2.1% in October.

Trading Ideas:

• Trading Central has identified a bearish signal on Viva Energy Group (ASX:VEA) following the formation of a pattern over a period of 157-days which is roughly the same amount of time the share price may fall from the close of $2.66 to the range of $1.95-$2.10 according to standard principles of technical analysis.
• And Trading Central has also identified a bearish signal on Bravura Solutions (ASX:BVS) 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 $0.78 to the range of $0.40-$0.48 according to standard principles of technical analysis.