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Morning Bell 10 August

Paulina Peters
August 10, 2020

The Aussie share market is eyeing a lift of 0.7% at the open after global equities ended mostly on positive ground on Friday, as the U.S. reported early signs of an economic recovery.

The U.S. economy added 1.8 million jobs in July, smashing through expectations that only 1.4 million people gained a job. Meanwhile, traders and investors looked past the lack of fresh economic stimulus, with the White House and Democratic party not yet being able to agree on a new weekly payment to replace the $600 per week federal unemployment benefit that expired at the end of July.

Companies reporting today:

  • Aurizon Holdings (ASX:AZJ) reported a 28% jump in its net profit after tax in the full year and also launched a $300 million buy back to return equity to shareholders.
  • GPT Group (ASX:GPT) handed down their results, reporting a $519.1 million loss for the first half of the year, with its retail property valuations falling 10.5% as at 30 June.
  • James Hardie Industries (ASX:JHX) reports their financial results today.

Local trading ideas:

  • Flight Centre Travel (ASX:FLT) is showing a bullish signal according to Trading Central’s charting. On Friday, Flight Centre closed 6.3% up at $10.63 and Trading Central believes FLT’s share price may rise to between $12.70 – $13.20 in 25 days according to standard principles of technical analysis.
  • UBS reiterated Insurance Australia Group (ASX:IAG) as a buy with a $6.10 price target. Despite IAG’s outlook being impacted by headwinds, UBS sees value in IAG. FY21 will be a tough year for underlying profits, with recovery on the horizon post COVID-19. That’s where IAG should have greater ability to restore profit growth, through stronger repricing. So that’s IAG a UBS Buy.
Read Transcript

Good morning this Monday the 10h of August.

I’m Paulina Peters a market analyst with Bell Direct, covering for Jess today.

The Aussie share market is eyeing a lift of 0.7% or 42 points after global equities ended mostly on positive ground on Friday as the U.S. reported early signs of an economic recovery.

The U.S. economy added 1.8 million jobs in July, smashing through expectations that only 1.4 million people gained a job.

Meanwhile traders and investors looked past the lack of fresh economic stimulus, with the While House and Democratic not yet being able to agree on a new weekly payment, to replace the $600-per-week federal unemployment benefit, that expired at the end of July.

The Dow gained 0.2% and the S&P500 rose ever so slightly, 0.1%, taking their winning streaks to six days.

While on the flip side, the Nasdaq took a breather from its smashing record high, falling 0.9%, ending seven-days of gains, with Amazon and Microsoft falling about 1.8% each, while Apple lost 2.3% and Netflix lost 2.8%.
On the Commodity front, the gold price lifted 0.4% to US$2,035 an ounce, but it earlier hit another brand-new record high of US$2,073, but couldn’t maintain momentum with traders quickly clipping off profits.

The oil price lifted 0.9% to US$41.55 a barrel, a trading range it appears to be staying around given fuel demand is low, while US energy companies continued to cut supply to a record low for the 14th week.

Earnings results are out today for Aurizon Holdings (ASX:AZJ) which just reported a 28% jump in its net profit after tax in the full year and also launched a $300 million buy back to return equity to shareholders.
GPT Group (ASX:GPT) also handed down their results, reporting a $519.1 million loss for the first half of the year, with its retail property valuations falling 10.5% as at 30 June.

And James Hardie Industries (ASX:JHX) also reports their financial results today.

Now to finish on two trading ideas, Flight Centre Travel (ASX:FLT) is showing a bullish signal according to Trading Central’s charting.

On Friday, Flight Centre closed 6.3% up at $10.63 and Trading Central believes FLT’s share price may rise to between $12.70 – $13.20 in 25 days according to standard principles of technical analysis.

And finally, UBS reiterated Insurance Australia Group (ASX:IAG) as a buy with a $6.10 price target.

Despite IAG’s outlook being impacted by headwinds, UBS sees value in IAG. FY21 will be a tough year for underlying profits, with recovery on the horizon post COVID-19.

That’s where IAG should have greater ability to restore profit growth, through stronger repricing.

So that’s IAG a UBS Buy.

I’m Paulina Peters, with Bell Direct, happy trading.

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