Between the Bells

The market wasn’t too fazed by the RBA’s 25 basis point rate hike yesterday, as the ASX rallied 1.65% higher. All industry sectors closed with gains, with Materials, utilities and real estate in the lead. 

Biotech company Imugene (ASX:IMU) was the best performing stock following a clinical trial update, with IMU gaining 11.4% by the close of trade. Nickel Industries (ASX:NIC), United Malt Group (ASX:UMG) and GrainCorp (ASX:GNC) also closed higher. 

The most traded stocks by Bell Direct clients yesterday were Commonwealth Bank (ASX:CBA), Northern Star Resources (ASX:NST) and Telstra (ASX:TLS). 

US equities closed in the red overnight, as investors await the Federal Reserve’s meeting on Thursday. The Dow Jones closed 0.2% lower, the S&P500 down 0.4% and the Nasdaq down 0.9%. 

What to watch today:

• The futures are suggesting the Australian market will open flat this morning, as investors wait for the Fed’s decision tomorrow morning. 
• In commodities, the price of oil has rebounded and is currently trading 2.2% higher as a sharp depreciation of the US dollar and tight global supplies sparked some dip-buying. Gold is trading 0.9% higher as bond yields retreated, while iron ore has fallen 2.4% extending its decline and hitting its lowest level since April 2020. 
• Watch the following stocks share price movements today, as these companies are set to release some announcements. Amcor (ASX:AMC) will release its quarterly earnings today and Goodman Group (ASX:GMG) will also deliver a quarterly report. Domino’s Pizza (ASX:DMP) is set to hold its AGM today. 
• Event Hospitality and Entertainment (ASX:EVT) is set to go ex-dividend today, so this may see its share price fall as investors take their profits. 

Trading Ideas:

• Bell Potter maintain a Speculative Buy rating on Cluey (ASX:CLU) following the release of the company’s quarterly update, with group key metrics broadly in-line with Bell Potter’s expectations. They have lowered their 12-month valuation from $1.10 to $0.90, and at CLU’s current share price of $0.50, this implies 78.2% share price growth in a year. 
• And Trading Central have identified a bullish signal in Qantas (ASX:QAN) indicating that the stock price may rise from the close of $6.00 to the range of $6.75 to $6.90 over 9 days, according to the standard principles of technical analysis. 

 US equities closed lower overnight, however the Dow Jones still posted the best month since 1976. Markets made an impressive comeback in October with the Dow Jones rising 14% for the month, as investor bet on the banks and more traditional companies. The S&P500 is up 8% for the month, while the Nasdaq underperformed the Dow and the S&P, gaining 4% for October. Overnight, the Dow Jones fell 0.4%, the S&P500 fell 0.8% and the Nasdaq dropped 1%. 

 European markets closed higher despite inflation and GDP coming in overnight, painting a bleak picture. Eurozone inflation hit a record high of 10.7%, the highest ever monthly reading. Prices are increasing, particularly energy and food over the last year. The increases have been accentuated by Russia’s invasion of Ukraine in late February. 

 What to watch today:

• The Australian market is set to open higher. The SPI futures are suggesting a 0.15% rise at the open this morning, ahead of the RBA’s interest rate decision today. 
• The RBA is expected to list the cash rate by 25 basis points to 2.85%. The announcement will be at 1:30pm AEDT. 
• In commodities: 
  • Oil has dropped 1.6% with fears of weak oil demand, particularly in China. 
  • Gold is trading 0.5% lower, continuing a recent decline ahead of the US Fed’s meeting on Thursday. 
  • Iron ore has crashed 6%, training at US$84 per tonne, the lowest since May 2020, as recession fears and expectations of lower demand continued to pressure prices. Chinese iron ore imports from January to September are 2.3% lowered compared to last year. Supply pressures are also lower as Covid cases decrease, easing chances of lockdowns in production hubs. 

Trading Ideas: 

• Bell Potter maintain a Buy rating on Coronado Global Resources (ASX:CRN) and have lowered their price target to $2.10. At CRN’s current share price of $1.86, this implies 12.9% share price growth in a year. 
• Trading Central have identified a bullish signal in Goodman Group (ASX:GMG) indicating that the stock price may rise from the close of $17 to the range of $18.80 to $19.20 over 23 days, according to the standard principles of technical analysis. 

The local market snapped a four-session winning streak on Friday, to close 0.87% lower as investors sharply sold off 4% amid a sharp decline in commodity prices, including iron ore tumbling 5.6%.

 BrainChip (ASX:BRN) was the most sold-off stock on Friday, with the world-leading AI on-chip processing and learning technology company tanking 21.2% after releasing a Q3 update, outlining that the $1.5 billion company generated cash receipts of just $118,000 and an operating loss and operating cash outflow of $3.8 million for the quarter. Macquarie (ASX:MQG) shares were virtually unchanged at the closing bell on Friday despite the investment bank releasing strong half-year results including net operating income up 11% to $8.641 billion, profit after tax rising 13% to $2.305 billion and an interim dividend rise of 10% to $3 per share. Total operating expenses also rose though by 13% to $2.305 billion.

 The most traded stocks by Bell Direct clients on Friday were BHP Group (ASX:BHP), BrainChip (ASX:BRN) and Lake Resources (ASX:LKE).

 Overseas on Friday, the US market ended higher after a turbulent week, following the release of Apple’s earnings report that boosted the tech-heavy Nasdaq higher to lead the gains on Wall St. The Dow Jones industrial index added 2.6%, the Nasdaq rose 2.87% and the S&P500 lifted 2.46% on the last trading session of the week. Investor sentiment was also boosted on Friday – investors are optimistic that the Fed may indicate this week that it is preparing to pivot toward a slower pace of monetary tightening.

 In Europe, markets closed mixed after the European Central Bank raised its interest rate by 75-basis points, alongside the release of a number of company earnings reports. The Stoxx 600 closed up just 0.1% while Germany’s DAX added 0.24% and the French CAC climbed 0.27%, but the UK’s FTSE100 fell almost 0.4%. Shell shares fell more than 1.5% on Friday despite the oil and gas giant releasing third quarter results on Thursday including quarterly profits more than doubling from the same period a year earlier.

 What to watch today:

• The ASX is set to open 1.36% higher, following the strong rally on Wall Street that ended the last trading week higher.
• In commodities this morning, crude oil is trading 0.7% lower at US$96.31 per barrel, gold is trading 1% lower at US$1,644 per ounce, iron ore is down 5.6% at US$84 per tonne and gas is trading down 5.8% at US$2.84 per gallon.
• There is no local economic data released today, however local investors will be keenly awaiting the release of the RBA’s interest rate decision out tomorrow at 1:30pm AEDT with the market expecting another rise of 0.25% taking the nation’s cash rate to 2.85%.

 Trading Ideas:

• Trading Central has identified a bullish signal on Auckland International Airport (ASX:AIA) following the formation of a pattern over a period of 27 days which is roughly the same amount of time the share price may rise from the close of $6.82 to the range of $7.13 to $7.21 according to standard principles of technical analysis.
• Trading Central has also identified a bearish signal on Sigma Healthcare (ASX:SIG) following the formation of a pattern over a period of 34 days which is roughly the same amount of time the share price may fall from the close of $0.65 to the range of $0.53 to $0.55 according to standard principles of technical analysis.

The Aussie share market rallied 2.52% this week (Mon-Thu). The real estate sector soared 5.56%, while consumer staples was the only sector to end the week lower.   
 
 In this week's wrap, Grady covers:

• (0:36) Bell Potter's view on the Federal Budget's spending allocations
• (2:44) What to look out for in company results
• (3:13) How the REIT sector performed this week
• (3:22) The best performing stocks on the ASX200
• (4:43) The most traded stocks & ETFs by Bell Direct clients 
• (5:10) Two economic news items to watch out for

US equities closed mixed overnight after new data showed third-quarter GDP grew faster than expected, encouraging investors to buy stocks linked to the health of the economy. The US economy grew at a 2.6% annualised pace for the period, against the Dow Jones estimate for 2.3% growth. The Dow closed almost 200 points higher, while the S&P500 closed 0.6% lower. The Nasdaq also closed lower, down 1.6%, weighed down by Meta. Meta reported weak fourth-quarter forecast and disappointing third-quarter earnings, which saw its share price tumble 25%. 

What to watch today:

• The SPI futures are suggesting the Australian market will drop 0.38% at the open this morning, following the mixed session in New York. 
• In commodities, the oil price is has jumped, underpinned by record US crude exports data. The US exported a record amount of crude and fuel last week, with total petroleum shipments reaching 11.4 million barrels a day. This is even as fuel inventories hit seasonal lows, adding to concerns about tight supply. So keep watch of energy shares today such as Woodside (ASX:WDS) and Beach Energy (ASX:BPT). Meanwhile gold is hovering near the highest levels in two weeks, as the US dollar and Treasury yields retreated, while iron ore is trading in the red, at its lowest in 22 months, as expectations of lower demand continue to put pressure on prices. 
• Macquarie Group (ASX:MQG) will be in focus today, as the investment bank is set to release its half year results. Goldman Sachs expect to MQG to report a cash NPAT of $2,183 million, which is higher than market consensus estimates of $2,157 million. 
• De Grey Mining (ASX:DEG) and ResMed (ASX:RMD) will each be releasing a quarterly report today. 

Trading Ideas:

• Bell Potter maintain a Buy rating on Regis Resources (ASX:RRL) after the company gave a quarterly production update yesterday. Bell Potter have lowered their price target to $2.68, and at its current share price of $1.56 this implies 71.8 share price growth in a year. 
• Trading Central have identified a bullish signal in Lynas Rare Earths (ASX:LYC) indicating that the stock price may rise from the close of $8.34 to the range of $9.05 to $9.25 over 30 days according to the standard principles of technical analysis. 

The local market’s rally extended into Thursday, with the key index closing 0.5% higher in its best session in 6-weeks, boosted by a surge in energy stocks. An array of corporate earnings results were released today including ANZ (ASX:ANZ), which beat expectations but investors sharply sold out amid uncertain outlook for the year ahead and the increase of the bank’s provision for doubtful debts, and Reece which investors piled into after the company released a Q1 trading update outlining sales revenue jumped 28.8% to $2.3 billion boosted by inflation.

 Australian Clinical Labs (ASX:ACL) is the latest company to report a cyber-attack that happened back in February, whereby the health records and credit card information of about 223,000 patients and staff in its Medilab Pathology business were stolen and posted on the dark web. Shares in the company plunged more than 5% today. While Weebit Nano (ASX:WBT) surged nearly 30% today after announcing it has successfully completed full technology qualification of its Resistive Random-Access Memory (ReRam Module) manufactured by its R&D partner CEA-Leti, which is a key step that must be completed for every semiconductor product on each new target process.

The winning stocks for today’s session were Ramelius Resources (ASX:RMS) adding 8.4% a day after the gold miner reaffirmed production guidance for FY23, Sandfire Resources (ASX:SFR) lifting 7% and Regis Resources (ASX:RRL) ending the day up 6.85%. On the losing end of the market, Iluka Resources (ASX:ILU) took the biggest hit today, falling 6.31% despite no price sensitive news released by the company today, Core Lithium (ASX:CXO) fell 5.15% today and Pinnacle Investment Management (ASX:PNI) lost 3.35% today.

 The most traded stocks by Bell Direct clients today were Lake Resources (ASX:LKE), Commonwealth Bank of Australia (ASX:CBA) and WA1 Resources (ASX:WA1).

 The Australian dollar is trading higher again this afternoon against the green back with 1 Aussie dollar buying 64.82 US cents, 55.90 British Pence, 94.56 Japanese Yen and 1 New Zealand Dollar and 11 Cents.

 Following Australia’s inflation rate hitting a 32-year high for the September quarter of 7.3%, investors will be awaiting the release of the RBA’s latest cash rate hike next Tuesday when the central bank next meets.

The US markets closed mixed on Wednesday with the Dow Jones industrials index adding 0.05%, while the S&P500 fell almost three quarters of a percent and the tech-heavy Nasdaq tumbled more than 2%, weighed down by Alphabet. Google parent company Alphabet had its worse session since 2020 yesterday after the tech giant released third quarter earnings on Tuesday that missed analysts’ expectations on both top and bottom lines. Investor sentiment was hit again on Wednesday after the earnings report out of Alphabet missed expectations which bucks the trend in recent days of strong company earnings reports for the third quarter, while Microsoft highlighted the impact the Fed and consequently the surging dollar had on the economy. Sentiment was briefly boosted early in the session by the Bank of Canada releasing a lower-than-expected rate hike for October amid fears of a recession, but that wore off in afternoon trade as investors don’t necessarily see that move as a sign the Fed’s will follow suit. 

 Over in Europe, markets closed higher amid strong earnings reports out of some European companies including Deutsche Bank and Mercedes Benz. Germany’s DAX closed the midweek session up 1.09% while the French CAC rallied 0.41%. The European Central Bank will also meet on Thursday where it is widely expected to raise the region’s cash rate by 75-basis points. The UK’s FTSE100 also rallied, adding 0.61% on Wednesday.

 What to watch today:

• Stocks going ex-dividend today include Bank of Queensland (ASX:BOQ) and Tribune Resources (ASX:TBR). If you’ve been considering these stocks it might be worth buying in today as stocks going ex-dividend generally trade lower on the ex-dividend date.
• On the commodities front, brent crude oil is trading 2.38% higher at US$95.75 per barrel, gold is up 0.7% at US$1664.07 per ounce and iron ore is down almost 1.6% to US$94 per tonne.
• The Aussie dollar has strengthened to buy 64.93 U.S. cents, 95.01 Japanese Yen, 56.37 British Pence and 1 New Zealand dollar and 11 cents.
• The SPI futures are expecting the ASX to open 0.38% higher.

 Trading Ideas: 

• Trading Central has identified a bullish signal on Flight Centre Travel Group (ASX:FLT) following the formation of a pattern over a period of 23-days which is roughly the same amount of time the share price may rise from the close of $15.85 to the range of $17-$17.30 according to standard principles of technical analysis.
• Trading Central has also identified a bearish signal on BlueScope Steel (ASX:BSL) following the formation of a pattern over a period of 95-days which is roughly the same amount of time the share price may fall from the close of $15.70 to the range of $12.30-$13.00 according to standard principles of technical analysis.

The ASX200 closed the session 0.2% higher today, with real estate and utilities in the lead, each rallying more than 2% higher. Meanwhile, consumer staples and energy were hit the hardest. 

 Eight of the eleven industry sectors close in the green, despite key inflation data being released today. Australia’s annual inflation rate has risen to 7.3% in the last 12 months to September, the highest reading since 1990. On a quarterly basis, the consumer price index rose 1.8% in the September quarter. This is due to higher prices for new dwelling construction, fuel and food. 

 Looking at the ASX200 leaderboard today, Costa Group (ASX:CGC) was the best performing stock, advancing more than 10%, after a private equity firm acquired a 14% stake in the company. Other top performers were G.U.D Holdings (ASX:GUD), Ramelius Resources (ASX:RMS) and Nufarm (ASX:NUF). 

 Medibank (ASX:MPL) declined the most today, its share price tumbling more than 18%, after the company announced all of their customers’ personal data has been compromised by a cyber attacked. Meanwhile, mining companies Whitehaven Coal (ASX:WHC), Pilbara Minerals (ASX:PLS) and New Hope Corporation (ASX:NHC) are also in the red. 

 The most traded stocks by Bell Direct clients today were WA1 Resources (ASX:WA1), ELMO Software (ASX:ELO) and Whitehaven (ASX:WHC). 

 Lastly, the Australian dollar is buying 64 US cents, 56.58 British Pence, 94.92 Japanese Yen and $1.12 New Zealand. 

Wall Street extended its advance overnight, closing higher for the third consecutive day. The Dow gained 1.1% or 337 points. The S&P500 advanced 1.6%, and the Nasdaq advanced 2.2%, ahead of earnings releases from some big tech names. After the closing bell both Microsoft and Alphabet reported earnings that fell short of expectations. And later in the week, Amazon, Apple and Meta Platforms will report earnings. Also, a decline in bond yields contributed to the latest gains, as the yield on the 10-year Treasury note was last down about 15 basis points. 

European equities also had a positive run. Tech stocks were up 4%, while oil and gas stocks and bank stocks were the only sectors to end the session in negative territory. The Stoxx 600 closed 1.4% higher. 

What to watch today:

• The SPI futures are suggesting the Australian market will rise 0.82% at the open this morning. 
• Last night the government handed down the Federal Budget. Some of the winners included new parents and families, with increased parental leave and reduced cost of childcare. Also, battery, hydrogen fuel cell and plug-in hybrid cars are to be exempted from taxes, if their retail price is below the luxury car tax threshold. This may have an impact on battery making lithium stocks. A million new homes will also be built over 5 years from 2024, so stocks such as Lendlease (ASX:LLC) may benefit from this. On the downside however, power costs are to rise by 20% this year and 30% next year. Also, food crop losses and distribution to milk supplies due to the floods are expected to add 0.1% to inflation in the December and March quarters. Generally though, the budget doesn’t have a big influence over market movements. 
• In commodities, the oil price trading higher, just under US$85 per barrel. Gold is also in the green, trading just under US$1,653 an ounce. And iron ore has regained 1%, now US$95.50 per tonne. 
• In economic data, today the inflation rate for the third quarter is set to be released at 10:30am AEDT, expected to rise by 6.1% to 6.5%. 
• Keep watch of the following companies, that are set to release a quarterly report today. These include Coles (ASX:COL), Iluka Resources (ASX:ILU), Mirvac Group (ASX:MGR), Mineral Resources (ASX:MIN) and Westfield (ASX:URW). 

Trading Ideas:

• Bell Potter maintain a Speculative Buy rating on PointsBet Holdings (ASX:PBH) and have lowered their valuation from $5.25 to $4.50. At its current share price of $2.03, this implies over 100% share price growth in a year. 
• Trading Central have identified a bearish signal in News Corp (ASX:NWS), indicating that the stock price may fall from the close of $26.74 to the range of $22.20 to $23 over 17 days, according to the standard principles of technical analysis. 

The ASX200 moved higher today, closing with a 0.3% gain. Nine of the eleven industry sectors are in the green with real estate stocks advancing the most, up 1.7%. Meanwhile, the energy and materials sectors declined the most. 

Lithium company Sayona Mining (ASX:SYA) was the best performing stock on the ASX200 today, closing the session 10.6% higher. While there was no news from the company, its share price was likely boosted by the price of lithium, which has reached a record high. Lithium carbonate prices in China extended its record high, now up 95% year-to-date, as surging demand coincides with tight supply. Other top performing stocks today included Credit Corp (ASX:CCP), St Barbara (ASX:SBM), Nine Entertainment (ASX:NEC) and Core Lithium (ASX:CXO). 

On the flip side, Reliance Worldwide (ASX:RWC) declined the most today, closing the session more than 13% lower. The company released a quarterly update this morning, which was a mixed bag of results. Sales increased when compared to the prior corresponding period, while EBITDA margins fell more than 26% over the quarter. Ampol (ASX:ALD), New Hope Corporation (ASX:NHC) and Chalice Mining (ASX:CHN) also closed in the red. 

The most traded stocks by Bell Direct clients today were Whitehaven Coal (ASX:WHC), Pilbara Minerals (ASX:PLS), the Bank of Queensland (ASX:BOQ) and Sayona Mining (ASX:SYA). 

Tonight, the government will be handing down the Federal Budget. This isn’t likely to have much impact on markets, however we’ll all still be watching the budget tonight. It’ll be announced at 6:30pm AEDT. And tomorrow the inflation rate for the third quarter will be released. The inflation report is more likely to have some influence over markets tomorrow, with inflation expected to rise from 6.1% to 6.5%. This is a key piece of data ahead of the RBA’s next meeting on Tuesday, when markets are expecting a 25-basis point rate hike. 

Lastly, the Australian dollar is buying 63 US cents, 56.58 British Pence, 94.13 Japanese Yen and 1 dollar and 11 cents New Zealand.