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Morning Bell 1 November

Sophia Mavridis
November 1, 2022

 US equities closed lower overnight, however the Dow Jones still posted the best month since 1976. Markets made an impressive comeback in October with the Dow Jones rising 14% for the month, as investor bet on the banks and more traditional companies. The S&P500 is up 8% for the month, while the Nasdaq underperformed the Dow and the S&P, gaining 4% for October. Overnight, the Dow Jones fell 0.4%, the S&P500 fell 0.8% and the Nasdaq dropped 1%.

European markets closed higher despite inflation and GDP coming in overnight, painting a bleak picture. Eurozone inflation hit a record high of 10.7%, the highest ever monthly reading. Prices are increasing, particularly energy and food over the last year. The increases have been accentuated by Russia’s invasion of Ukraine in late February.

What to watch today:

  • The Australian market is set to open higher. The SPI futures are suggesting a 0.15% rise at the open this morning, ahead of the RBA’s interest rate decision today.
  • The RBA is expected to list the cash rate by 25 basis points to 2.85%. The announcement will be at 1:30pm AEDT.
  • In commodities:
    • Oil has dropped 1.6% with fears of weak oil demand, particularly in China.
    • Gold is trading 0.5% lower, continuing a recent decline ahead of the US Fed’s meeting on Thursday.
    • Iron ore has crashed 6%, training at US$84 per tonne, the lowest since May 2020, as recession fears and expectations of lower demand continued to pressure prices. Chinese iron ore imports from January to September are 2.3% lowered compared to last year. Supply pressures are also lower as Covid cases decrease, easing chances of lockdowns in production hubs.

Trading Ideas: 

  • Bell Potter maintain a Buy rating on Coronado Global Resources (ASX:CRN) and have lowered their price target to $2.10. At CRN’s current share price of $1.86, this implies 12.9% share price growth in a year.
  • Trading Central have identified a bullish signal in Goodman Group (ASX:GMG) indicating that the stock price may rise from the close of $17 to the range of $18.80 to $19.20 over 23 days, according to the standard principles of technical analysis.

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