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Morning Bell 1 May

Jessica Amir
May 1, 2020

The Australian share market is set for a breather today with the futures suggesting the ASX200 could fall 2.2% at the open following global equities.

Wall Street investors trimmed profits overnight as weaker economic data came out, while hopes are still high for a COVID-19 vaccine.

Today, investors will be watching Origin Energy (ASX:ORG), Austal (ASX:ASB), ResMed (ASX:RMD) & new home sales for March.

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Good morning, well the Australian share market kicks off the month of May and is set to take a breather with the futures earlier suggesting a drop of 2.2% following global equities lower.

Overnight Wall Street investors trimmed profits as weaker economic data came out, while hopes remain high for a COVID-19 vaccine.

On the economic front American unemployment claims rose more than expected last week, taking the total number of unemployed people because of COVID-19 to 30 million.

Meantime, US consumer spending dropped 7.5% in March and that was more than expected.

On the company news side of things, Facebook reported quarterly revenue charged up 18% and Facebook shares rose a 5%, however the S&P 500 ended almost 1%  lower, while it closed off the month of April up 13% that was the S&P500’s best monthly gain since 1987.

And yesterday here the ASX200 closed off the month of April with a record monthly gain rising 8.8%.

Now looking at commodities, the oil price is higher compared to yesterday it’s at $18.78, gold has fallen to a two-week low $1,695 an ounce and the Aussie dollar is at a three-week high 65.10 U.S.

Now in terms of what to watch today, well just three quick points Origin Energy (ASX:ORG) reported March electricity volumes fell 7% in the year however, Origin announced it’s set to buy a 20% stake in a UK energy retailer called Octopus for an initial $134 million and then $373 million phased over four years.

Origin also obtained an Aussie license to adapt the UK retailer system which will save origin up to $80 million from 2020 and then up to $150 million per year from 2024.

Origin is already a Bell Potter buy stock and it’s tip to be a strong COVID-19 key recovery stock, as it’s got a very strong balance sheet.

Now secondly ABC reported this morning the Defence Minister requested ship builder Austal (ASX:ASB) to construct new vessels for the Royal Australian Army or Navy rather in Western Australia.

Now the ship builder Austal (ASX:ASB) into the trading halt yesterday ahead of the announcement being made and is still not made an announcement on the ASX, but this morning ABC says the Defence Force requested 6 new patrol boats to be built under the fast-tracked $350 million project all to keep defence jobs afloat during the COVID-19 pandemic.

Now ResMed (ASX:RMD) has reported third quarterly revenues rose 17% and operating profit charged up 30% and their shares are already up 7% this year from Monday to Thursday though they lost 6%.

What else to watch, well on the economic front in Australia new home sales data are out for the month of March, but expect a sharp decline given the clamp down in auctions and open homes last month so keep an eye on banking stocks and property stocks after 11:30am.

And what to watch this evening well, U.S construction spending data is out for March and manufacturing data is out for April.

I’m Jessica Amir from Bell Direct, happy trading and stay safe.

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