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Morning Bell 1 November

Sam Kanaan
November 1, 2023

Wall St closed higher overnight, having regained some ground on a poor month strongly impacted by rising interest rates. Rising treasury yields are pressuring equities on Wall St to end a volatile trading month on the New York Stock Exchange. The Dow Jones is up 0.38%, the tech-heavy-Nasdaq closed the session nearly half a percent higher and the S&P500 ended the day 0.65% in the green. Stocks are heading for a third straight losing month, marking the first three-month losing streak for both the Dow Jones and S&P500 since March 2020.

Earnings season continued on Tuesday with Caterpillar exceeding estimates for the third quarter, however signalling fourth-quarter revenue would only be slightly higher than a year ago which caused shares in the company to fall 5% on Tuesday.

JetBlue also fell 14% after the airline’s third-quarter results missed expectations on both the top and bottom lines.

In Europe markets logged the worst monthly performance in a year for the month of October despite mostly rising on the final trading day of the month, as investors digested a slew of economic data against earning results.

The STOXX600 rose 0.6%, Germany’s DAX rose 0.64%, the French CAC added 0.9% and, in the UK, the FTSE100 fell just 0.08%, weighed down by BP falling 4.5% after the mining giant missed third quarter estimates.

The ASX200 closed slightly higher on Tuesday by 0.1% buoyed by real estate and consumer staples stocks rallying despite China’s industrial activity falling into contraction mode in October. At the other end of the market, the materials sector fell over 1% on Tuesday, tracking the declining price of iron ore.

Gold miner St Barbara fell over 10% after posting higher all-in-sustaining-costs at both of its mines in PNG and Canada.

What to watch today:

  • The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.52% at the open this morning.
  • On the commodities front, oil is trading 1.22% lower at 81 US dollars and 20 cents a barrel, gold is down 0.6% at 1983 US dollars an ounce and iron ore is down 0.41% at 122 US dollars a tonne.
  • AU$1.00 is buying US$0.63, 96 Japanese Yen, 52.34 British Pence and NZ$1.09.

Trading Ideas:

  • Bell Potter maintains a buy rating on Burgundy Diamond Mines (ASX:BDM) and holds its price target steady at $0.50. The buy rating is maintained as the potential for experienced management to enhance the value of an already top-10 global diamond mine is a key tenet to a positive investment view.
  • And Trading Central identifies a bearish signal on Reece (ASX:REH), indicating that the stock price may fall from the close of $17.46 to the range of $13.90-$14.60, on a pattern formed over 131 days, according to the standard principles of technical analysis.

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