Morning Bell 28 October

Jessica Amir
October 28, 2020

The local futures are suggesting the market will fall 0.4% at the open, which will mark the fifth straight day of falls. But keep in mind, every year after a U.S. presidential election, over the last 36 years, the Aussie market has rallied and had a positive year.

Commodity traders breathed a sigh of relief. Oil rallied up 2% to US$38.97 and Gold edged up 0.2% to US$1,908.

What to watch today:

  • Afterpay (ASX:APT) announced underlying sales sky rocketed 115% to $4.1b in the September quarter, up from $1.9b the same time last year. Morgan Stanley recently upgraded APT’s buy rating and price target to $121.
  • Quarterly results: Coles (ASX:COL) and Galaxy (ASX:GXY).
  • AGMs: Medical Developments International (ASX:MVP), Netwealth Group (ASX:NWL), Steadfast Group (ASX:SDF), Super Retail Group (ASX:SUL), Tassal Group (ASX:TGR), Vocus Group (AS:VOC) & Codan (ASX:CDA).

Trading ideas:

  • Bell Potter upgraded heavy equipment maintenance company, Mader Group’s (ASX:MAD) Buy rating, increasing its price target to $1.25 implying 37.4% upside in a year, on the back of borders opening up in Australia.
  • Bell Potter increased ANZ’s (ASX:ANZ) Buy rating, increasing its target to $21.20 implying 9% upside in a year.
  • Citi reiterated Nick Scali (ASX:NCK) as a Buy, increasing its price target to $10.50, expecting 20% share price return and 6.6% dividend yield.
  • West African Resources (ASX:WAF), Kina Securities (ASX:KSL) and Harvest Technology Group (ASX:HTG) are all showing bullish charting signals – according to Trading Central

 

Read Transcript

Good morning, thanks for your company this Wednesday the 28th of October, I’m Jessica Amir, market analyst with Bell Direct.

Well there’s just six days till the U.S. election and the textbook risk off environment continues with investors exercising caution until after the U.S. election day even though better than expected U.S. economic news came through overnight with U.S. durable goods orders rising more than expected.

Equities still mostly closed lower economic recovery stocks like Caterpillar and Boeing fell over 3% each while traders invested into names benefiting from people staying at home with Shopify and Zoom Video shares rising 4% each with Amazon following.

As for how the major U.S. indices closed, the Dow lost 0.8%, of the S&P500 slipping 0.3% and the Nasdaq gained 0.6%.

Commodity traders breathed a sigh of relief seeing green on the screen, overnight oil rallied up 2% to US$38.97 as US Gulf of Mexico oil production was shut down ahead of another storm approaching so this will support ASX oil stocks today or it should do.

Meanwhile gold edged up by 0.2% to US$1,908, announced a bit of welcome news for Aussie gold buffs.

And the local futures are suggesting the market will fall 0.4% at the open which could mark the market’s fifth pull back in five trading days but do keep in mind every year after a U.S. presidential election, over the past 36 years in fact, the Aussie share market has rallied and had a positive year and in the fact that we’re expecting a vaccine to be widely available in 2021 and global restrictions are expected to ease next year and it’s easy to think why next year will be a positive one for equities so that’s something to keep in mind.

What to watch today, well fresh company news has just been released from Afterpay (ASX:APT) announcing underlying scale sales skyrocketed up 115% to $4.1 billion in the September quarter that’s up from $1.9 billion the same time last year now what is really interesting to note though Afterpay didn’t say what its margin was but it did say that its merchant revenue profits or margin were in line with what they achieved last year so this will have investors thinking today.

Keep in mind Morgan Stanley recently upgraded Afterpay’s buy rating and price target to $121 quarterly.

Results out today for Coles (ASX:COL) they’ve just reported quarterly sales revenue was up almost 11% to $9.6 billion, Galaxy (ASX:GXY) just announced their quarterly results and they’re on track to make production for this year so investors can call apart their results just hand it down.

And AGMS today are being held for Medical Developments International (ASX:MVP), Net Wealth (ASX:NWL), Steadfast (ASX:SDF), Super Retail (ASX:SUL) Tassel (ASX:TGR), Vocus (ASX:VOC) and Codan (ASX:CDA).

As for trading ideas that could be worth a look, Bell Potter upgraded the heavy equipment maintenance company Mader Group’s (ASX:MAD) they’re buy rating increasing their target to $1.25 that implies 37.4% upside in a year on the back of borders opening up in Australia.

And Bell Porter increased ANZ’s buy rating increasing its target to $21.20 that implies just 9% upside in the year and Citi reiterated Nick Scarli (ASX:NCK) as a buy increasing its target to $10.50 expecting a 20% share price return and almost a 7% dividend yield, now yesterday Nick Scarli announced its maiden second half profit guidance indicating stronger longer trading conditions are expected and lastly keep an eye on West African Resources (ASX:WAF), Kina Securities (ASX:KSL) and Harvest Technology Group (ASX:HTG) all showing bullish charting signals according to Trading Central.

Stay safe happy trading I’m Jessica Amir, thanks for your company.

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