Morning Bell 10 June

Jessica Amir
June 10, 2020

The ASX200 is eyeing a fall of 1.6% at the open following yesterday’s gain of 2.4%, taking the total gain from the March lows to 36%.

Trading ideas for today:

  • CSL (ASX:CSL) was reiterated by Citi as a buy with a price target of $334, while UBS targets $335. CSL’s recent success has been in 1- the acquisition of kidney treatment company Vitaeris, 2-the results of phase 2 clinical trial of for hereditary angio-edema (HAE), and 3 – CSL’s latest involvement in the development of a COVID-19 vaccine.
  • Bell Potter upgraded Auswide Bank (ASX:ABA) to a buy, and increased its price target to $5.15
  • Bell Potter downgraded Flight Centre (ASX:FLT) to a hold from a buy, noting its 96% gain from COVID-19 lows outpaces the company’s fundamentals.
  • Macquarie raised City Chic Collective (ASX:CCX) price target by 20% to $3.25 from yesterday’s close of $2.80. The plus size women’s retailer CCX, is also a Bell Potter buy as it has been having great online trade success.

Investors will be watching:

  • NZ infrastructure company Infratil (ASX:IFT) announced it secured $250 million NZD from an Institutional Share Placement. So its shares could come under pressure once the new shares are placed onto market.
  • Stockland (ASX:SGP) and Smartgroup (ASX:SIQ) hold their AGMs today
  • In the US this evening, inflationary data for May is out ahead of the Fed’s Thursday interest rate decision, with rates tipped to remain at 0.25%.
Read Transcript

Good morning, well Aussie equities have charged for six straight sessions and closed 2.4% higher yesterday taking the total gain from the March low to 36%, so a bit of profit taking is bound to be on the cards.

Today the futures are suggesting a fall of 1.6% or 86 points this Wednesday morning.

Now on Tuesday in the U.S we had exceptional leads from the tech side.

Traders and investors bought into all of what we’re using in lockdown seeing Amazon and Apple shares gained 3% each and both notched new record all-time highs.

Facebook and Netflix joined the party also rising 3% each, now that saw the Nasdaq touch the 10,000 point milestone for the first time in history before closing 0.3% higher at a new record all-time high.

As for the blue-chip Dow Jones, that fell 300 points and the S&P500 lost 0.8% snapping its 6 day hot-hot-hot winning streak, with stocks that have been running hot-hot-hot like Delta United Airlines and Royal Caribbean seeing a lot of profit taking following their exceptional gains of late.

Now on the commodity front, the oil price has steamed 2% high to $38.49 a barrel, the gold price has lifted 1% to $1,721 and the iron ore price last traded above $100 a ton.

Now what to watch today, well the NZ infrastructure company Infratil (ASX:IFT) just announced they’ve secured $250 million NZD by an institutional share placement, so its shares could come under pressure once the new shares are placed onto the market.

Their shares however have seen a massive 53% gain from their COVID-19 lows and that outpaces the market.

Stockland (ASX:SGP) and Smartgroup (ASX:SIQ) have their AGMs today.

Now what else to watch, well following better than expected business confidence numbers for May that we saw yesterday, today it’s consumer confidence’s turn with the June reading out.

And also keep an eye out this evening in the U.S for their inflationary data out for May this evening ahead of the Federal Reserve’s Thursday interest rate decision, with rates there tipped to remain on hold at 0.25%.

And it seems like a lucky number 0.25%, that’s where our interest rates are holding as well. Now to some local trading ideas, well CSL (ASX:CSL) was reiterated as a Citi buy with a price target of $334, UBS reckons it’s targeting $335.

CSL’s recent success has been in 1- CSL has just announced the acquisition of the kidney treatment company called Vitalis. 2 – The results of phase 2 clinical trial for hereditary angioedema (HAE) have been great. 3 – CSL says their latest involvement in the development of a COVID-19 vaccine have been fruitful as well.

Now Bell Potter upgraded Auswide Bank (ASX:ABA) to a buy and increased its price target for the original bank to $5.15.

And lastly Bell Potter downgraded Flight Center (ASX:FLT) traveled to a hold from a buy, noting 96% of its gain from COVID-19 lows outpaces the company’s fundamentals.

Now according to the SiteMinder’s World Hotel Index, global hotel bookings have now reached 34% of pre-COVID-19 levels. Some countries such as Australia are exceeding 50% of COVID-19 levels.

Now a final trading idea, well Macquarie has upgraded City Chic Collective (ASX:CCX) as a buy with a $3.28 price target.

Now Bell Potter also backs the stock as a buy following its exceptional online trading success.

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

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