Morning Bell 10 July

Jessica Amir
July 10, 2020

The Aussie share market is eyeing a 0.4% fall at the open, going by the futures.

The resilient Nasdaq rose 0.5% to hit another new record high helped by Amazon rising over 3% to another record, with Microsoft, Apple and Google-parent Alphabet putting on at least 0.4% each. This has helped the Nasdaq gain 2.7% this week, while the S&P500 is higher by 0.7%.

The World Health Organisation (WHO) has published new guidance saying COVID-19 may be transmitted through air particles in crowded and inadequately ventilated spaces, citing “choir practice…restaurants” and fitness classes as examples. Although the WHO says its findings are preliminary, you can’t rule out air transmission.

Local trading ideas:

  • UBS rated Vocus (ASX:VOC) as a buy with a $3.60 target, based on valuation, but noted earnings catalysts are potentially negative. Yesterday Vocus closed 0.7% lower at $3.05.
  • Bell Potter increased its buy target for Praemium (ASX:PPS) to $0.56 given the software platform looks set to buy listed platform provider PWL for $55.6 million, which will build scale and reinvigorated interest in the stock.
  • UBS reiterated its buy rating for CSL (ASX:CSL), but dropped its price target to $331 given the disruptions to its plasma centres in America, due to COVID-19, with UBS expecting donations to fall 20% from April to September, but then pick up.
Read Transcript

Good morning, well the World Health Organization (WHO) has published new guidance that COVID-19 may be transmitted through air particles in crowded and inadequate ventilated spaces, citing “choir practice…restaurants” and fitness classes as examples.

Although the WHO says the findings are preliminary, you can’t rule out transmission.

Florida recorded its highest level of COVID-19 hospitalizations and deaths with California cases also hitting their highest levels but in some good news jobless claims for the week were less than expected with less people filing for benefits and slowly returning to work.

On the company side of things, Walgreens reported weaker than expected earnings and suspended its share purchase plan which sent its shares 7.7% lower.

Elsewhere, United Airlines, Delta and America all fell about 5% each while the Dow Jones top 30 lost 1.4%, the S&P 500 stumbled 0.6% lower, the resilient Nasdaq rose 0.5% though hitting another record high thanks to Amazon shares rising over 3% to another record while Microsoft, Apple and Google parent Alphabet all put on at least 0.4%.

This helped the Nasdaq gain 2.7% for the week and the S&P500 clock 0.3% higher.

On the commodity front, the oil price slipped 3% though under the key $40 level it’s now at US$39.59, gold lost 0.7% to US$1,807 an ounce, copper gained 0.5%, the iron ore price continued its ascent putting on about 2% to US$105, that’s a new year high.

Now what to watch today, well if you look at the futures the Aussie share market is eyeing a 0.4% fall.

Now for local trading ideas, firstly overnight UBS rated Vocus Group (ASX:VOC) as a buy with a $3.60 target based on its valuation, but noted earnings catalysts are potentially negative so be mindful of that.

Yesterday Vocus closed 0.7% lower to $3.05.

Secondly, Bell Potter increased its by target for Praemium (ASX:PBS)with a $0.56 price target given the software platform looks set to buy another listed platform provider PWL for $55.6 million.

Now this will build scale for the software provider and definitely reinvigorate interest in the stock.

Lastly UBS reiterated its buy rating for the largest company in Australia, CSL (ASX:CSL) as a buy but it did drop its price target to $331, given the disruptions to plasma centers in America due to COVID-19.

UBS is expecting donations to fall 20% from April to September but then pick up.

I’m Jessica Amir with Bell Direct.

Happy trading, stay safe and don’t forget to tune in to our weekly wrap.

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