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Morning Bell 1 August

Sophia Mavridis
August 1, 2022

Week-to-date the market is up 2.3%, and up 0.8% in Friday’s session, as real estate, utilities and tech advanced.

Companies have also been reporting their earnings for the June quarter, which has caused a bit of share price movement. On the ASX200, St Barbara Mines (ASX:SBM) gained after reporting a 40% jump in gold production. And EML Payments (ASX:EML) rebounded after a heavy fall earlier in the week, while Zip (ASX:ZIP), BrainChip (ASX:BRN) and PointsBet Holdings (ASX:PBH) declined the most.

The most traded stocks by Bell Direct clients on Friday were BHP Group (ASX:BHP), Treasury Wine Estates (ASX:TWE), Sierra Rutile (ASX:SRX) and Lake Resources (ASX:LKE).

Overseas, European shares actually closed July as their best performing month since November 2020. Recently GDP data also showed that economic growth in the euro zone accelerated in the second quarter, and that’s despite the rising gas prices and high inflation figures. The STOXX 600 jumped 1.3%, with oil and gas stocks in the lead.

US equities also had a positive run, rising for the third straight day. Strong earnings results have been coming in from the major tech names in the US, which has recently overshadowed the concerns that market was having about a recessionary environment and high inflation. The Dow Jones closed 1% higher or more than 300 points, the S&P500 up 1.4% and the Nasdaq up 1.9%.

What to watch today:

  • The SPI futures are suggesting the Australian market will rise 0.67% at the open this morning.
  • Keep watch of Ramsay Healthcare (ASX:RHC) today, with reports that there’s been progress with the company’s takeover approach by private equity company KKR. Back in April, Ramsay received a non-binding $88 per share offer from KKR.
  • Healthcare stocks are also in focus after the World Health Organisation declared Monkeypox as a global health emergency. The disease has so far spread in 74 counties, and therefore shares such as CSL (ASX:CSL), Telix Pharmaceuticals (ASX:TLX) and Clinuvel Pharmaceuticals (ASX:CUV) may be ones to look out for.
  • In commodities, oil is trading more than 2% higher on continued reports of tight supply. The gold price also gained after negative GDP data in the US pushed markets to scale back hawkish expectations from the Fed. Meanwhile, iron ore is trading slightly lower, however has been recovering, rising from a seven-month low.
  • In economic data, this morning the S&P Global Manufacturing PMI will be released at 9am, and ANZ’s data on job advertisements for July will be released at 11:30am AEST.
  • Bayrock Resources (ASX:BAY) as it lists on the ASX today.

Trading Ideas:

  • Bell Potter maintain a BUY rating on BCI Minerals (ASX:BCI) after the company reported its June quarter. EBITDA rose to $7.7 million from $3.5 million in March, despite sales volumes dropping 10%. Bell Potter have lowered their price target to $0.50, and at BCI’s current share price of $0.25, this implied 100% share price growth in a year.
  • Trading Central have identified a bullish signal in Lake Resources (ASX:LKE) indicating that the stock price may rise from the close of $0.81 to the range of $0.99 to $1.03 over 20 days, according to the standard principles of technical analysis.

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