Morning Bell 14 December

12/13/21 • 4 min

The Aussie share market pushed 0.4% higher yesterday, to start the new trading week off on a positive note. Most sectors posted gains, with the energy, real estate and materials sectors leading the way, while the financial and healthcare sectors came under a bit of pressure.

Netwealth (ASX:NWL) was the biggest gainer, while Charter Hall Group (ASX:CHC) rose 5.6% to a new all-time high, following the company announcing an upgraded FY22 earnings guidance and funds under management growth update. Other top stocks included material stocks St Barbara (ASX:SBM), Champion Iron (ASX:CIA), Iluka Resources (ASX:ILU), Regis Resources (ASX:RRL) and Pilbara Minerals (ASX:PLS). Meanwhile, the worst performing stocks yesterday included NIB Holdings (ASX:NIB), GUD Holdings (ASX:GUD) and Insurance Australia Group (ASX:IAG). IAG closed 3.4% lower after UBS dropped its price target to $4.20 and rated the stock a SELL.

The most traded stocks by Bell Direct clients yesterday included Liontown Resources (ASX:LTR), BHP Group (ASX:BHP), and Brickworks (ASX:BKW). Another most traded stock was gold miner and lithium developer Firefinch (ASX:FFX). The company successfully completed a $100m Institutional Placement, whereby proceeds from the placement will be used to fast track the production growth at the Morila Gold Mine.

In the US, stocks retreated as investors remained cautious about how the Omicron variant will impact the economy, as well as what the Federal Reserve will announce on Wednesday. All three benchmarks closed lower, with the Nasdaq down the most. The S&P500 fell 0.91%, and the Dow lost 320 points.

For today, following the negative session on Wall Street, the futures are suggesting the Aussie share market will open 0.6% lower.

What to watch today:

Afterpay (ASX:APT) is one to watch as today its shareholders will vote on the Square takeover. Now Square recently changed its name to Block, to house the company’s various products. And since the offer was made back in August, Block’s share price has sunk more than 30%, meaning the value of the transaction is now less than where Afterpay’s shares were trading prior to the offer being made.
In economic news, business confidence data for November will be released this morning. Business confidence is determined via a monthly telephone survey conducted by NAB, where 600 small, medium, and large sized non-agricultural companies are surveyed on their expectations of business conditions for the upcoming month. In October, business confidence surged to 21 points from 10 in September, and November’s reading is expected to come in at 23 points.
Oil prices fell due to new doubts about the Omicron variant. However, OPEC predicted in its monthly report that the variant’s impact on fuel demand will be mild. The gold price lifted as the focus turns to the upcoming Fed meeting, which will give investors an indication of when stimulus measures would wind down. And the seaborne iron ore price lifted 3.3% to US$108.51 a tonne.
HUB24 (ASX:HUB) is holding its AGMs today.
Engineering services company, Cardno (ASX:CDD) is set to go ex-dividend today.

Trading Ideas:

Citi upgraded its rating on investment advice business, Perpetual (ASX:PPT) from NEUTRAL to BUY, with a price target of $40.40. PPT closed 1.25% lower yesterday to $35.68, which implies about 14% share price growth.
Trading Central has a bullish signal on lithium developer, Lake Resources (ASX:LKE). This signal indicates that the stock price may rise from the close of $0.89 to the range of $0.97 - $0.99 in the next 20 days, according to standard principles of technical analysis.

For today, following the negative session on Wall Street, the futures are suggesting the Aussie share market will open 0.6% lower.

What to watch today:

Afterpay (ASX:APT) is one to watch as today its shareholders will vote on the Square takeover. Now Square recently changed its name to Block, to house the company’s various products. And since the offer was made back in August, Block’s share price has sunk more than 30%, meaning the value of the transaction is now less than where Afterpay’s shares were trading prior to the offer being made.
In economic news, business confidence data for November will be released this morning. Business confidence is determined via a monthly telephone survey conducted by NAB, where 600 small, medium, and large sized non-agricultural companies are surveyed on their expectations of business conditions for the upcoming month. In October, business confidence surged to 21 points from 10 in September, and November’s reading is expected to come in at 23 points.
Oil prices fell due to new doubts about the Omicron variant. However, OPEC predicted in its monthly report that the variant’s impact on fuel demand will be mild. The gold price lifted as the focus turns to the upcoming Fed meeting, which will give investors an indication of when stimulus measures would wind down. And the seaborne iron ore price lifted 3.3% to US$108.51 a tonne.
HUB24 (ASX:HUB) is holding its AGMs today.
Engineering services company, Cardno (ASX:CDD) is set to go ex-dividend today.

Trading Ideas:

Citi upgraded its rating on investment advice business, Perpetual (ASX:PPT) from NEUTRAL to BUY, with a price target of $40.40. PPT closed 1.25% lower yesterday to $35.68, which implies about 14% share price growth.
Trading Central has a bullish signal on lithium developer, Lake Resources (ASX:LKE). This signal indicates that the stock price may rise from the close of $0.89 to the range of $0.97 - $0.99 in the next 20 days, according to standard principles of technical analysis.

Previous Episode

Morning Bell 13 December

The market lost some ground last Friday, after what had been a positive week and closed 0.4% lower, with utilities up the most.

Online marketplace Redbubble (ASX:RBL) was the best performer on the ASX200, gaining over 10%. UBS initiated coverage of the stock, with a NEUTRAL rating and a $3.45 price target. Iluka Resources (ASX:ILU) gained over 7%, amid a broader rally in the electric vehicle focused commodity sector. Meanwhile, Afterpay (ASX:APT) declined the most.

Bell Direct clients found the most value in Battery Tech & Lithium ETF (ASX:ACDC), as well as CSL (ASX:CSL), Westpac (ASX:WBC), Pilbara Minerals (ASX:PLS) and AGL Energy (ASX:AGL).

On Friday US CPI data was released. Inflation rose 6.8% year-over-year, its highest rate since 1982. Despite inflation hitting a 39-year high, all three major benchmarks advanced. The S&P500 closed at a record, up 0.95%, the Dow up 0.6% and the tech heavy Nasdaq up 0.7%.

Australian shares are set to open higher. The futures are suggesting a rise of 0.18%.

What to watch today:

Keep watch of Fortescue Metals (ASX:FMG). On Friday the company announced its CEO, Elizabeth Gaines is stepping down and transitioning into the role of Non-Executive Director. FMG fell 0.8% on Friday, following the announcement.
Oil gained traction to near $72 a barrel on Friday, attempting to fully recover from a 2% drop the day before. Gold is also trading higher, while the seaborne iron ore price is 1.4% lower, trading at US$105 a tonne.

Trading ideas:

Bell Potter have a Speculative BUY rating on Liontown Resources (ASX:LTR), with a $2.15 valuation. The company is now funded to commence development at the Kathleen Valley lithium project and is in a stronger position to negotiate long term sales contracts. LTR last closed at $1.64, implying 31% share price growth in a year.
Trading Central’s analysts have identified a bullish signal in Tietto Minerals (ASX:TIE). This bullish signal indicates that the stock price may rise from the close of $0.42 to the range of $0.48 - $0.50, within 18 days.

Next Episode

Morning Bell 15 December

Australian shares closed flat yesterday. The real estate sector led the gains, while consumer staples declined 4%.

Medical device company, Polynovo (ASX:PNV), jumped 15%, from $1.36 to $1.57 yesterday, after a positive business update, advising that its US segment had experienced a strong start to the second quarter. Charter Hall (ASX:CHC) gained over 5%, extending its gains from the previous session. Meanwhile, Mesoblast (ASX:MSB) fell 17%, off the back of news that biotech company Novartis choose to terminate an agreement with the business. Woolworths Group (ASX:WOW) also fell after the supermarket warned that its profit growth is slowing. And Afterpay (ASX:APT) fell 4.1% to $90.83, even after its shareholders approved its acquisition by Block, formerly Square. And this deal is now awaiting approval from the Spanish Central Bank.

The best performer in the All Ords was Virtus Health (ASX:VRT) which jumped an impressive 35%. VRT is a fertility, diagnostic and day hospital, and they announced that they received a takeover bid from private equity group BGH Capital. Pointterra (ASX:3DP), gained 17.4% after announcing three new US contracts.

In New York, US investors traded cautiously amid the final US Federal Reserve policy meeting of the year. Large tech stocks also moved lower and new inflation data continued to show a sharp rise in prices. The Fed began its two-day meeting on Tuesday and today the Central Bank will release a statement with quarterly projections for the economy, inflation, and interest rates. The Dow Jones is down 0.3%, the S&P500 is down 0.75% and the Nasdaq is down 1.14%.

The Aussie share market is set to open lower this morning, with the SPI futures suggesting a 0.4% fall.

What to watch today:

Consumer confidence figures will be released this morning for December.
Oil is trading 1.5% lower, around US$70 a barrel, after the International Energy Agency declared the Omicron COVID-19 variant could dent the global demand recovery.
The gold price dropped to around US$1,770 an ounce, the lowest level since the 2nd December, as investors await major central bank policy meetings, while the dollar strengthened and bond yields traded higher.
The seaborne iron ore price is lower, at US$107 a tonne.
Westpac (ASX:WBC) is set to hold its AGM today.
Grange Resources (ASX:GRR) is set to go ex-dividend today.

Trading ideas:

Bell Potter maintain their BUY rating on Nufarm (ASX:NUF), at a $5.40 price target. NUF last closed at $4.71, implying 14.6% share price growth in a year. NUF is also a UBS, Morgans and Citi BUY.
Trading Central have identified a bullish signal in Panoramic Resources (ASX:PAN), which indicates that the stock price may rise from the close of $0.25 to the range of $0.28 to $0.29, within 35 days.