Between the Bells

US equities saw its second day of gains. The Dow Jones gained more than 400 points or 1.3%. The S&P500 gained 1.2% and the Nasdaq closed 0.9% higher. Traders are also awaiting the earnings results of four of the biggest tech companies. Results for Alphabet and Microsoft are out tonight, and Apple and Amazon are due Thursday.

European markets also closed in the green, following the announcement that Rishi Sunak is the new UK prime minister. 

What to watch today:

• Our local market is set to open higher. The SPI futures are suggesting a 0.4% rise at the open this morning. 
• In economic data, the government will be handing down the Federal Budget tonight. This of course will be on watch, however it is unlikely to move markets. What is more pressing on markets is the inflation report, which is set to be released tomorrow. And this is a key piece of data ahead of the RBA’s next meeting on Tuesday. 
• Looking at commodities, 
  • Oil is trading lower as worries about a deteriorating growth outlook continue. Also, Chinese customs data showed that demand from the world’s largest crude importer remained subdued in September, as covid-induced restrictions and fuel export curbs, supressed consumption. 
  • The price of gold has dropped, while iron ore has slowly started to regain earlier losses. 
• The following companies are set to release a quarterly report today, so keep watch of their share price movements. These include Ampol (ASX:ALD), Mineral Resources (ASX:MIN), Pilbara Minerals (ASX:PLS) and Reliance Worldwide Corporation (ASX:RWC). 

The Australian dollar has dropped, currently buying 63 US cents, 56.58 British Pence, 94 Japanese Yen and 1 dollar and 10 cents New Zealand. 

Trading Ideas:

• Bell Potter maintains a Speculative BUY rating on Clean Seas Seafood (ASX:CSS) with a price target of $0.85. At its current share price of $0.55, this implies 54.5% 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 $7.86 to the range of $8.55 to $8.75 over 25 days, according to the standard principles of technical analysis. 

The ASX started the week exactly how it was anticipated to, closing Monday’s session 1.54% higher on the back of the strong rally that took over Wall Street on Friday. All eleven sectors of the ASX closed the first trading session of the week in positive territory.

Energy stocks were the worst performing today but still managed to close 0.74% higher despite oil prices dropping amid dampened sentiment following the conclusions of the party congress in China, with analysts in the region saying, ‘oil will remain choppy as recession risk and supply tightening balance each other out’. Fuel supplier Viva Energy (ASX:VEA) rallied today on the back of a Q3 FY22 trading update outlining sales volumes reached their highest level since pre-COVID-19 in during the quarter, rising 19.7% on the PCP. NOVONIX (ASX:NVX) shares rocketed a further 33% today as investors continue piling into the battery materials and technology company following the release of the major announcement last week that the company’s Anode Materials division has been selected to enter negotiations to receive US$150m in grant funding from the US Department of Energy. The materials sector led the rally today, adding more than 2.5% driven by Evolution Mining (ASX:EVN) adding 8.3%, Gold Road Resources (ASX:GOR) rallying 6.4% and Pilbara Minerals (ASX:PLS) lifting 6.21%.

The winning stocks for today’s session were NOVONIX (ASX:NVX), Evolution Mining (ASX:EVN) and Gold Road Resources (ASX:GOR). On the losing end of the market, South32 (ASX:S32) took the biggest hit today dropping just 1.88%, Beach Energy (ASX:BPT) fell 1.3% and Graincorp (ASX:GNC) also lost 1.3%.

The most traded stocks by Bell Direct clients today were South32 (ASX:S32), Pilbara Minerals (ASX:PLS) and Alumina (ASX:AWC).

China’s GDP growth rate for Q3 soared to 3.9% in data released today, which well exceeded market expectations of a 3.4% rise, and was a big jump from the 0.4% increase in Q2. Local investors will be keeping a keen eye out for Australia’s inflation rate for Q3 which is out on Wednesday.

The Australian dollar is buying 63.8 US cents, 56.58 British Pence, 94.42 Japanese Yen and 1 dollar and 10 New Zealand cents.

The local market ended Friday’s session 0.8% lower with every sector aside from energy stocks closing in negative territory. On Friday, investor sentiment was dampened by fears of a global recession but the energy sector offset sharp some of the losses, buoyed by strong gains for coal miners. 

 Telix Pharmaceuticals (ASX:TLX) led the ASX200 winners on Friday after ending the session up 12.67%, New Hope Corporation (ASX;NHC) rallied 7.7% to end the week, and Perseus Mining (ASX:PRU) lifted 5.85% on Friday. On the other end of the market, Home Consortium (ASX:HMC) fell 5.45% on Friday, Origin Energy (ASX:ORG) dropped 4.35% and Kelsian Group (ASX:KLS) fell 4.18%.

 The most traded stocks by Bell Direct clients on Friday were Woodside Energy (ASX:WDS), Grange Resources (ASX:GRR) and Northern Star Resources (ASX:NST).

 Over in the US, the ongoing swings between positive and negative investor sentiment shifted positive again on Friday after San Francisco Fed leader Mary Daly said at some point rate rises would moderate though it’s not yet time to ‘step down’ from large hikes, which fuelled a rally on Wall St. The Dow Jones Industrials index added 2%, the S&P500 also jumped 2% and the tech-heavy Nasdaq rose 1.7%. Earnings reports continue being released in the US with Exxon Mobil shares hitting an intra-day record high on Friday ahead of the company’s earnings report out this week, with some market analysts deeming the outlook for the company as attractive, ‘particularly for generalists needing energy exposure’.

 In Europe on Friday, the STOXX600 fell amid rising concerns that major central banks around the world would retain their aggressive stance on inflation with dismal earnings updates from a number of companies. European markets were also impacted by turbulence on the UK’s political front in addition to European leaders continuing a debate on how to tackle the bloc’s energy crisis after Germany gave the green light for discussions around a price cap. Germany’s DAX closed Friday’s session 0.3% lower, the French CAC lost 0.85% and in the UK the FTSE100 rose 0.37% extending the rally from Thursday on news of the resignation of new British PM Liz Truss.

What to watch today:

• The SPI futures are anticipating the ASX to open 1.42% higher on the back of the US rally that ended last week higher.
• On the economic data front today, investors will be awaiting the release of China’s Q3 GDP growth rate data out today with the market expecting an increase to 3.4% in Q3 from a rise of 0.4% in Q2.
• In commodities, brent crude oil is trading 1.22% higher at US$93.5 per barrel, gold is trading 1.81% higher at US$1657 per ounce, and iron ore is up 0.53% at US$94.50 per tonne.
• The Aussie dollar is trading slightly stronger this morning with 1 Aussie dollar buying 64 US cents, 56.41 British Pence, 94.17 Japanese Yen and 1 New Zealand dollar and 11 cents.

Trading Ideas:

• Trading Central has identified a bullish signal on Aeris Resources (ASX:AIS) following the formation of a pattern over a period of 29 days, which is roughly the same amount of time the share price may rise from the close of $0.42 to the range of $0.52 - $0.54 according to standard principles of technical analysis.
• Trading Central has also identified a bearish signal on Healius (ASX:HLS) following the formation of a pattern over a period of 17 days which is roughly the same amount of time the share price may fall from the close of $3.19 to the range of $2.98 - $$3.02 according to standard principles of technical analysis.

The Aussie share market declined 1.42% this week (Mon-Thu).  News on inflation, interest rates and levels of economic growth is making it more difficult for investors to agree on the direction of global markets.    
 
 In this week's wrap, Grady covers:

• (0:57) How La Nina has impacted Australian shares
• (2:52) UK inflation & US interest rate fears
• (3:22) The biggest movers on the ASX this week
• (4:45) The most traded stocks & ETFs by Bell Direct clients 
• (5:13) Three economic news items to watch out for

Well while European stocks had a good run overnight, US equities closed in the red, as Treasury yields continue to climb to new highs. The benchmark 10-year Treasury yield reached 4.2%, trading at a level not seen since 2008. Stocks declined for the second consecutive session as investors digested some key earnings reports. The Dow Jones closed 0.3% lower, the S&P500 down 0.8% and the Nasdaq down 0.6%. 

What to watch today:

• The Australian market is set to open lower this morning. The SPI futures are suggesting a fall of 0.37% at the open. 
• In commodities, the price of oil is only slightly higher, trading just above US$85 per barrel, while gold is trading lower. Gold is approaching levels last seen in April 2020, weighed down by the rallying US dollar and Treasury yields, on expectations that the Fed will continue its aggressive approach to rate hikes. And iron ore has started to regain some of its earlier losses this week, currently trading 1% higher. Iron ore hit an 11-month low earlier this week after China emphasised the importance of its zero-COVID policy. 
• There are a few stocks set to release a quarterly report today, so these companies will be the ones to watch. They include Allkem (ASX:AKE), AMP (ASX:AMP), Coronado Global Resources (ASX:CRN) and St Barbara (ASX:SBM). 
• Currently, 1 Australian dollar is buying 63 US cents, 94.25 Japanese Yen, 55 British Pence and 1.1 New Zealand. 

Trading Ideas:

• Bell Potter maintain a Buy rating on TechnologyOne (ASX:TNE). The company will release its FY22 results at the end of November, and the brokers view is that is may provide a catalyst for the share price, because firstly, profit before tax is likely to be toward the top end of the guidance range of 10-15% growth. Secondly, on the premise initial licence feeds may be below guidance of $12 million. Also, SaaS metrics and Annual Recurring Revenue could positively change, second half cash flow should be strong, and there is potential of capital management initiatives given the strong cash position. Bell Potter haven’t changed their forecasts, they maintain a price target of $14.25. At TNE’s current share price of $12.16, this implies 17.2% share price growth in a year. 
• Trading Central have identified a bearish signal in Fortescue Metals (ASX:FMG) indicating that the stock price may fall from the close of $16.52 to the range of $11.90 to $19.80 over 39 days, according to the standard principles of technical analysis. 

The local market closed in negative territory, down 1.02% today on the back of the global market sell-off overnight which was spurred by the UK’s inflation rate rising and investor sentiment in the US falling on concerns of more aggressive rate hikes to come in the region for months to come. It was another day for trading updates on the local market, causing investors to both sell-off and pile into certain stocks following the respective releases of quarterly earnings reports.

Woodside Energy (ASX:WDS) shares soared today after the oil and gas giant released a trading update today outlining record performance for Q3 including record production up 52%, sales volume up 59% and revenue jumped 70%. The results were largely driven by the inclusion of BHP’s petroleum assets. Zip Co (ASX:ZIP) also jumped 13% today after releasing a first quarter trading update today, revealing strength across both top and bottom lines including revenue up 19%, transaction numbers lifting 33%, customer numbers up 50% and merchants rising 70% to 94,100. Zip’s US business also saw credit loss rates decrease to 2.4% of total transaction volume, in line with target levels. We are seeing Australian companies are increasingly factoring in La Nina weather events set to hit the east coast over summer, into future guidance in updates released this week, for example Whitehaven Coal (ASX:WHC) and Costa Group (ASX:CGC).

The ASX200’s biggest winners today were NOVONIX (ASX:NVX) adding 7.04%, Adbri (ASX:ABC) recovered some of its losses from the past few sessions surging 6.76% today, and Woodside Energy (ASX:WDS) added 6.18%. And on the losing end, Sandfire Resources (ASX:SFR) fell 13.23%, Megaport (ASX:MP1) lost 11.80%, and St Barbara (ASX:SBM) extended its losses, falling a further 8% today.

The most traded stocks by Bell Direct clients today were the BetaShares Australian Strong Bear Hedge Fund (ASX:BBOZ), Whitehaven Coal (ASX:WHC) and the BetaShares Geared Australian Equity Hedge Fund (ASX:GEAR).

Today, Australia’s unemployment rate data for September was released showing the country’s jobless rate held steady at a near-50 year low of 3.5% for the month with just 900 Aussies gained work while the number of unemployed Australians increased by 8800.

The AUD is slightly weaker today following the release of the nation’s unemployment rate with 1 Aussie dollar buying 62.63 US cents, 93.94 Japanese Yen, 55.17 British Pence, and 1.11 New Zealand.

Overseas, the US markets rally came to an end on Wednesday as treasury yields rose to multi-year highs amid concerns the Federal Reserve will remain hawkish for months to come which in-turn raises the risk of a recession. The market sell-off dampened strong earnings reports from Netflix and United Airlines as an analyst at Morgan Stanley says earnings forecasts for this reporting season had been ‘cut to the bone’ so beating forecasts wouldn’t be hard as companies had already factored in rising interest rates and other impacts into outlook for the reporting season. The Dow Jones industrials index fell 0.33%, the tech-heavy Nasdaq dropped 0.85% and the S&P500 closed the midweek session down 0.67%.

Over in Europe and the UK, the four-day rally also ended after UK inflation data for September rose again to 10.1% after an unexpected decline in august. Food, energy and transport costs drove the rise in inflation, with the country’s cost of living continuing to hit residents and businesses hard especially before the winter months. The increase in inflation enhanced investor fears of a recession in the region as further interest rate hikes are expected to cool the rising inflation. The FTSE100 fell 0.17%, Germany’s DAX lost 0.19% and the French CAC closed the midweek session 0.43% lower.

What to watch today:

• The SPI futures are anticipating the ASX to follow the global sell-off by opening 0.7% lower.
• On the commodities front, brent crude oil has rebounded from recent day declines to trade 2.67% higher at US$92.43 per barrel, iron ore is trading flat at US$95 per tonne, and gold is trading 1.44% lower at US$1629 per ounce.
• The Australian dollar has strengthened to 68.08 US cents, 55.17 British Pence, 93.98 Japanese yen and 1 New Zealand Dollar and 11 cents.
• In economic data Australia’s unemployment rate for September will be released at 10:30am AEDT with the market expecting a decline to 3.4% for September, from 3.5% in August.

Trading Ideas:

• Trading Central has identified a bullish signal on Chalice Mining (ASX:CHN) following the formation of a pattern over a period of 46-days which is roughly the same amount of time the share price may rise from the close of $4.17 to the range of $4.95 to $5.15 according to standard principles of technical analysis.
• Trading Central has also identified a bullish signal on Azure Minerals (ASX:AZS) following the formation of a pattern over a period of 92-days which is roughly the same amount of time the share price may rise from the close of $0.29 to the range of $0.40-$0.42 according to standard principles of technical analysis.

The ASX traded mostly higher throughout the midweek session, which saw the key index close the day up 0.31%, despite the SPI futures expecting a sell-off to start the day. It was a day for the miners both on the winning and losing end of the market scale.

 BHP Group (ASX:BHP) shares were sold-off today, following the release of the mining giant’s quarterly update including production and unit cost guidance remaining unchanged for FY23, while production levels fell short of market expectations. Chalice Mining (ASX:CHN) jumped more than 9% today after the precious and base metal exploration company released an update on exploration activities at the Julimar Nickel-Copper-Platinum Group Element Project in Western Australia, with new drilling validating the recent 2D seismic interpretation, intersecting the northern extension of the complex down-plunge. Whitehaven Coal (ASX:WHC) shares sold-off at the opening bell following the release of the company’s quarterly update, however quickly rebounded as investors digested the company’s solid report including the company generating $1.55bn of cash in the quarter, and the expectation of La Nina weather events to impact production through the spring season. And Aurora Energy Metals (ASX:1AE) soared more than 17% during today’s session after revealing that the company is finalising the preparatory work for its Phase 1 RC drilling program at the Aurora Energy Metals Project, the first drilling at the project in a decade, with drilling expected to commence next week as the program targets both lithium and uranium.

 The winning stocks for today’s session were led by Core Lithium (ASX:CXO) adding 8.2%, Pilbara Minerals (ASX:PLS) lifting 5.8% and Pendal Group (ASX:PDL) rallying 5.5%. On the losing end, Megaport (ASX:MP1) tumbled 22.14% today, after the company released a quarterly trading update, St Barbara (ASX:SBM) continued its decline today, ending the day down 4.76% and Karoon Energy (ASX:KAR) fell 3.3%.

 The most traded stocks by Bell Direct clients today were Westpac (ASX:WBC), BHP Group (ASX:BHP), and the BetaShares Australian Strong Bear Hedge Fund (ASX:BBOZ). 

 In terms of economic data, investors are awaiting the release of Australia’s unemployment rate for September which is out tomorrow morning, with markets forecasting a decline to 3.4% from 3.5% for the month.

 The Australian dollar is trading stronger against the greenback at 63.12 US cents, 55.17 British Pence, 94.23 Japanese Yen and 1 New Zealand dollar and 11 cents.

The US markets rallied more than 1% for most of the day on Tuesday before closing the session marginally lower, with the Dow Jones & S&P500 adding 1.12% and 1.14% respectively, while the Nasdaq closed just under 1% higher, with the boosted higher by stronger than expected earnings out of Goldman Sachs, particularly on the bonds trading front. The big banks in the US reporting solid results overseas eased investor fears of a recession as the results shows investors are still spending. We are seeing these big swings in markets of late due to a see-saw effect of consumer spending remaining high, which eases recession fears, against inflation remaining stubbornly high causing central banks to raise rates to dampen spending and potentially send economies into recession. Investors are constantly torn between recessionary fears and inflationary fears. For markets to settle down investors will need to see economic growth with lower levels of inflation.

Over in the UK and Europe, the global rally extended into a fourth consecutive day in Europe with Germany’s DAX adding almost 1% on Tuesday and the French CAC lifting 0.44%, while the UK’s FTSE100 closed Tuesday’s session 0.24% higher following the move by the UK’s new finance minister to cut backtrack on all tax cuts announced at the country’s mini-budget in September.

On the commodities front, it’s a red start to the day across most commodities with brent crude oil trading down 1.14% at US$90.62 per barrel, natural gas is down more than 4%, iron ore is trading 1.55% lower at US$95 per tonne. Gold is trading just 0.07% higher at US$1651 per ounce and lithium is trading flat.

What to watch today: 

• The ASX futures are expecting the local market to open 0.43% lower despite another strong session on Wall Street overnight.
• On the economic data front, US housing permits and building permits data for September will be released tonight with the markets expecting a decline on both metrics from August, while investors locally will be awaiting the release of Australia's unemployment data for September out tomorrow, with the forecast for a decline to 3.4% from 3.5%.
• The Aussie dollar has weakened to buy 62.98 US cents, 55.26 British Pence, 94.06 Japanese yen and 1 New Zealand dollar and 11 cents.
• Stocks going ex-dividend today include Spheria Emerging Companies (ASX:SEC). If you have been thinking about these stocks it might be worth considering buying in today as stocks going ex-dividend generally trade lower on the ex-dividend date.

Trading Ideas:

• Trading Central has identified a bullish signal on Weebit Nano (ASX:WBT) following the formation of a pattern over a period of 19-days which is roughly the same amount of time the share price may rise from the close of $2.36 to the range of $2.63 to $2.69 according to standard principles of technical analysis.
• Trading Central has identified a bearish signal on Woodside Energy (ASX:WDS) following the formation of a pattern over a period of 16-days which is roughly the same amount of time the share price may fall from the close of $32.88 to the range of $26.75 to $28.00 according to standard principles of technical analysis.

The local market jumped 1.72% today amid a rise in US futures after a solid session on Wall Street overnight driven by solid earnings results released including from the Bank of America, which rose 6% after reporting stronger than expected Q3 results. Locally, the tech sector led gains on the key index today adding more than 4%, taking lead from the Nasdaq posting its best session since July overnight. Every sector aside from the energy sector closed higher today. Another pivot out of the UK in the form of new finance minister Jeremy Hunt saying he will reverse nearly all tax-cuts announced and that the energy price guarantee would continue through the winter, boosted markets around the world today.

The RBA’s meeting minutes for October were also released today, outlining the RBA’s shock decision to raise the country’s cash rate by 25 basis points in October was “finely balanced” with the risk of a global and domestic economic slowdown, but that further interest rates hikes would likely be required.

Today Westpac (ASX:WBC) confirmed its in takeover talks with embattled fintech company Tyro Payments (ASX:TYR) to acquire 100% of the company’s issued share capital in a bid to strengthen Westpac’s small business proposition particularly in the hospitality and healthcare sectors. Following the announcement, shares in Westpac (ASX:WBC) rose 2.3%, while Tyro Payments (ASX:TYR) shares rallied 1.9%.

The winning stocks for today’s session were NOVONIX (ASX:NVX) which added 18.99% amid the surge in tech stocks today, Hub24 (ASX:HUB) jumped 14% today after the company released a quarterly update outlining net inflows of $3 billion for the quarter, and Telix Pharmaceuticals (ASX:TLX) added 11% today after the company released promising preliminary data from two investigator-initiated studies in triple negative breast cancer, and non-muscle-invasive bladder cancer.

On the losing end of the market today, St Barbara (ASX:SBM) took the biggest hit, tanking more than 21.5% after releasing a first quarter report for the three months to September 30, including a downgrade to the gold miner’s guidance for FY23 on the back of a slower than expected ramp up in underground mine equipment availability and utilisation impacting production at its Leonora operation where the company’s Gwalia Mine is located. Adbri (ASX:ABC) extended its dive today, falling another 4.5%, and Coronado Global Resources (ASX:CRN) dropped 4.4% today.

The most traded stocks today by Bell Direct clients today were Lake Resources (ASX:LKE), the BetaShares Geared Australian Equity Hedge Fund (ASX:GEAR), and the BetaShares Australian Strong Bear Hedge Fund (ASX:BBOZ).

US housing starts and building permits data for September will be released tomorrow, with the markets expecting a decline on both metrics from the month of August.

The Australian dollar is buying 62.9 US cents, 55.26 British Pence, 94.09 Japanese Yen and 1 dollar and 11 New Zealand cents.