Morning Bell 12 June

06/11/24 • 2 min

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.

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.

Previous Episode

Morning Bell 11 June

Wall St closed higher overnight as investors await the Federal Reserve’s interest rate decision. The Dow Jones rose 0.18%, the S&P500 rallied 0.26% and the tech-heavy Nasdaq ended the trading session 0.35% in the green.

Over in Europe, markets closed lower as traders react to initial results from the EU Parliament elections. The STOXX600 closed 0.27% lower with losses led by food and beverage stocks which fell 1.27%. Germany’s DAX fell 0.34%, the French CAC lost 1.35% and over in the UK the FTSE 100 ended Monday’s trading session 0.2% in the red.

Locally, the ASX200 was closed yesterday for the King’s birthday public holiday, however on Friday the ASX200 rose nearly half a percent higher with all but one major sectors trading higher. Gains were led by the consumer discretionary and the materials sectors which rose 1.19% and 0.76% respectively.

What to watch today:

The Australian share market is set to open lower, with the SPI futures predicting a fall of 0.42% at market open this morning.
On the commodities front this morning,
- Oil is trading 3.57% higher at 78 US dollars and 23 cents a barrel, with the significant rise fuelled by expectations of increased summer fuel demand.
- Gold is trading 0.78% higher at 2310 US dollars an ounce as traders awaits the upcoming monetary policy decision.
- And iron ore is trading 0.02% lower at 108 US dollars and 48 cents a tonne.

Trading Idea:

Trading Central has identified a bullish signal on Adairs Limited (ASX:ADH), indicating that the stock price may rise from the close of $1.74 to the range of $2.50-$2.65 on a pattern formed over 52 days, according to the standard principles of technical analysis.

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Morning Bell 13 June

US markets advanced overnight after the Fed chairman Jerome Powell stated that policymakers want to see more progress on inflation ahead of a decision to lower rates. US May CPI data also showed inflation continuing to cool, which lifted the market’s expectations that the Federal Reserve will pivo to rate cuts as early as September.

It was a strong session on Wall Street with the S&P500 gained 0.85%, closing above 5,400 for the first time. The Nasdaq also hit an all-time high, up 1.53%, while the Dow Jones was the outlier, closing down slightly by 0.09%.

What to watch today:

Following US markets, the SPI futures are suggesting the Australian market will rise 0.67% at the open this morning.
In economic data, Westpac’s consumer confidence data for June is out at 11:30am today and the unemployment rate for May is out at 12:30pm AEST, forecast to rise to 4.2%.
In commodities,
- Oil is up 0.65% to US$78.40 per barrel, due up an unexpected increase in US crude stocks. So keep watch of ASX listed energy producers today.
- Gold is also in the green at US$2,322.76 per ounce.
- And iron ore is down more than 1% at US$106.27 per tonne, the lowest in two months, due to pessimistic demand expectations for China.

Trading Ideas:

Trading Central have identified a bullish signal in Regis Healthcare (ASX:REG) indicating that the stock price may rise from the close of $4.09 to the range of $4.37 to $4.47 over 43 days, according to the standard principles of technical analysis.
Meanwhile Trading Central is bearish on South32 (ASX:S32), indicating that the stock price may fall from the close of $3.64.