Between the Bells

Wall St closed mixed on Tuesday as the Nasdaq closed at fresh highs and investors await for important inflation data. The Dow Jones fell 0.31%, the S&P500 closed 0.27% higher and the tech-heavy Nasdaq ended the trading session 0.88% higher as Apple gained 7%, now trading at an all-time high.

Over in Europe, markets closed lower as the focus turns towards the Federal Reserve’s next meeting and important inflation data coming out of the US. The STOXX 600 fell 0.9% with all major sectors ending the trading session in the red with losses led by banks which fell 2.17%. Germany’s DAX lost 0.68%, the French CAC fell 1.33% and over in the UK the FTSE100 closed Tuesday’s trading session nearly 1% lower.

Locally yesterday, the ASX200 fell 1.33% with all but one major sector ending in the red. Losses were led by the materials and real estate sectors which fell 2.58% and 2.35% respectively. This was offset by the consumer discretionary sector which rose 0.11% yesterday.

What to watch today:

• The Australian share market is set to open lower, with the SPI futures suggesting a fall of 0.46% at market open this morning.
• In terms of economic data, important US inflation data will be released later on tonight for core inflation month on month with a consensus and forecast of 0.3%.
• On the commodities front this morning,
  
  • Oil is trading 0.38% higher at 78 US dollars and 3 cents a barrel, gold is trading 0.29% higher at 2316 US dollars an ounce and iron ore is trading 1% lower at 107 US dollars and 38 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Electro Optic Systems (ASX:EOS), despite downgrading its 12-month price target to $2.10. The buy rating is maintained by Bell Potter as it is estimated that EOS will generate $70.3m in revenue for CY24 and assuming an EBITDA margin of around 29%, this implies an underlying EBITDA of $20.4m. The $2.10 price target remains a greater than 15% premium to the current share price, hence the buy rating is maintained.
• Trading Central has identified a bearish signal on Stockland Corp (ASX:SGP), indicating that the stock price may fall from the close of $4.47 to the range of $4.04-$4.12, on a pattern formed over 12 days, according to the standard principles of technical analysis.

Over in the US so far on Tuesday, Wall Street closed mixed as Fed Chair Jerome Powell signalled concerns over the direction of the US economy amid US tariffs and the possibility of a global trade war. The Dow Jones climbed 0.1% while the S&P500 and Nasdaq dropped 0.2% and 0.6% respectively.

In Europe overnight, markets closed higher as investors digested the latest Trump tariff announcements and The European Union plans to retaliate against the US for new steel and aluminium tariffs. The STOXX 600 rose 0.23%, Germany’s DAX added 0.56%, the French CAC gained 0.28% and, in the UK, the FTSE100 ended the day up 0.11%.

Across the APAC region on Tuesday, markets closed mixed as investors continued digesting the impacts and flow on effects of Trump’s latest tariffs. Hong Kong’s Hang Seng fell 1.06%, and China’s CSI index fell 0.46%, while South Korea’s Kospi Index rose 0.71% and Japan’s markets were closed for a holiday.

The local market started the new trading week lower on Monday before a choppy session that led to a flat close on Tuesday as a sharp sell-off in healthcare stocks weighed on the local index.

Trump tariffs continue to dampen investor sentiment and fuel investor and central bank demand for gold stocks, bullion and exposure in portfolios given the safe-haven nature of the precious commodity at a time where economic and market certainty is unclear.

CSL’s results for the first half out yesterday weighed on the local market and healthcare sector as the healthcare giant fell nearly 5% yesterday despite beating expectations for 2 of the company’s 3 divisions. The company’s Behring business, which manufactures plasma products and provides collection services in the US, Australia, Europe and more, reported a strong first half with revenue up 10% and gross margin of 51.1% which beat expectations by 20bps. Investors likely sold out of the company amid warnings of FX headwinds to come in H2 and after the Seqirus division posted a 9% decline in revenue on the PCP.

Gold miners rocketed again yesterday as the price of the precious commodity jumped over US$2900/ounce for the first time amid increased demand out of central banks and from investors due to the haven nature of the commodity in a time of great uncertainty.

What to watch today:

• Ahead of the midweek trading session here in Australia the SPI futures are anticipating the ASX will open the day up 0.02%.
• The Aussie dollar has further strengthened against the greenback to buy US$0.62, 95.87 Japanese Yen, 50.70 British Pence and 1 NZ$1.11 cents.
• On the commodities front this morning, oil is trading 1.21% higher at US$73.19/barrel, gold is down 0.38% at US$2906/ounce and iron ore is up 0.56% at US$106.97/tonne.

Trading Ideas:

• Bell Potter has maintained a buy rating on CSL (ASX:CSL) but have lowered the 12-month price target from $345 to $335 following the release of the company’s first half results showing revenue rose 5% but fell 1% short of BPe and NPATA rose 3% but was 4% below BPe. The analyst maintains a buy rating as the Behring division continues its strong growth outlook and positive margin recovery despite the Seqirus division facing headwinds of declining vaccine demand in the US.
• And Trading Central has identified a bullish signal on QBE Insurance Group (ASX:QBE) following the formation of a pattern over a period of 7-days which is roughly the same amount of time the share price may rise from the close of $20.43 to the range of $21.90 to $22.20 according to standard principles of technical analysis.

Wall St closed mixed overnight as investors dropped some big name tech stocks before earnings reports are released. The Dow Jones gained half a percent, the S&P500 fell half a percent and the tech-heavy Nasdaq fell 1.28%.

Investors pulled out of some big-name tech stocks overnight including Nvidia which dropped 7%, while Microsoft fell nearly a percent. Other stocks to decline overnight include Amazon, Netiflix and Meta Platforms.

Early tomorrow morning, the US Federal Reserve interest rate decision will be announced which has a consensus and forecast to be maintained at its current rate of 5.5%

Over in Europe, markets closed higher as earnings seasons reports continue to be released. The STOXX600 rose 0.53% overnight with the majority of sectors closing Tuesday’s trading session in the green. Gains were led by construction and materials stocks which added 1.37%, whilst mining stocks fell 1.22%. Germany’s DAX rose 0.49%, the French CAC gained 0.42% and over in the UK, the FTSE100 fell 0.22% by the closing bell.

Locally yesterday, the ASX200 closed 0.46% lower with most sectors closing in the red. Losses were led by the materials and information technology sectors which fell 1.93% and 0.9% respectively. This was slightly offset by the consumer discretionary sector which rose by 0.22% by the end of the trading session.

What to watch today:

• The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.37% at market open this morning.
• In terms of economic data today, CPI indicator data will be released at 11:30 this morning with a forecast of 3.9%, with its previous result having been at 4%.
• On the commodities front this morning,
  
  • Oil is trading 0.78% lower at US$75.22/barrel as demand lowers from top consumers such as China.
  • Gold is trading 1.25% higher at US$2410/ounce and iron ore is trading 0.25% lower at US$106.59/tonne.

Trading Ideas:

• Bell Potter maintains a speculative buy rating on RMA Global (ASX:RMY) and has a 12-month price target of $0.10. The buy rating is maintained by Bell Potter as the key driver for shareholder value in RMY remains the US market, where a decline in interest rates could potentially drive an uplift for house sales and as a result increase activity on RMY’s platform and subscriptions. The recommendation and valuation is based on penetrating the large US market which presents a significant opportunity, hence the speculative buy rating is maintained.
• And Trading Central has identified a bearish signal on Arena REIT (ASX:ARF), indicating that the stock price may fall from the close of $3.77 to the range of $3.49-$3.55, on a pattern formed over 28 days, according to the standard principles of technical analysis.

Wall St soared overnight as the Federal Reserve kept interest rates unchanged, while hinting at possible cuts in September. The Dow Jones rose 0.24%, the S&P500 had its best day since February, rising 1.58% and the tech-heavy Nasdaq gained 2.64%.

In terms of US stocks, tech giants made a big comeback, led by Nvidia which rallied 12.8% overnight. Other stocks including Apple, Meta Platforms and Amazon also finished Wednesday’s trading session higher.

Over in Europe, markets closed higher after the euro zone inflation rose unexpectedly. The STOXX600 closed 0.79% higher, led by tech stocks which gained 2.62%. Germany’s DAX rose over half a percent, the French CAC closed 0.76% higher and over in the UK the FTSE100 ended 1.13% in the green by the closing bell.

Locally yesterday, the ASX200 closed Wednesday’s trading session 1.75% higher with all sectors finishing in positive territory. Gains led by the information technology and energy sectors which rose 2.52% and 2.47% respectively.

What to watch today:

• The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.21% by market open this morning.
• On the commodities front this morning,
  
  • Oil is trading up 5.23% at US$78.64/barrel as fears of supply disruptions increase following further tensions in the Middle East.
  • Gold is trading 1.55% in the green at US$2447/ounce and iron ore is trading 0.32% lower at US$106.25/tonne.

Trading Ideas:

• Bell Potter maintains a speculative buy rating on Frontier Digital Venture (ASX:FDV) and has a 12-month price target of $0.74. The speculative buy rating is maintained by Bell Potter as FDV has several significant growth levers within its portfolio and platforms coming out of a CY23 focused on cash flows and margins. There is a favourable view of FDV’s strategy of targeting underpenetrated emerging markets with marketplace platforms and FDV emerging profitable with a positive EBITDA and operating cash flows has helped maintained Bell Potter’s speculative buy rating.
• And Trading Central has identified a bullish signal in Nickel Industries (ASX:NIC), indicating that the stock price may rise from the close of $0.85 to the range of $1.11-$1.17, on a pattern formed over 51 days, according to the standard principles of technical analysis.

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.