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Morning Bell 10 May

Paulina Peters
May 10, 2022

Yesterday, the Aussie share market started the new trading week extending its losses from the previous trading session.

The benchmark S&P/ASX200 index slipped 1.2%, reaching its lowest level since mid-March. It comes as China intensifies its zero-COVID policy, which in turn has deepened the supply chain crisis. Looking at the sector performances, the market was broadly sold off, with both the real estate and tech sectors posting the biggest losses. The energy, consumer staples and healthcare sectors did however manage to all close slightly higher.

The best performer yesterday was once again medical device company, PolyNovo (ASX:PNV), in part due to its directors toping up on PNV shares, however it also seems investors are taking advantage of its share price weakness to purchase more shares. Meanwhile, the worst performers included NOVONIX (ASX:NVX), Imugene (ASX:IMU) and Magellan Financial Group (ASX:MFG). Investors are continuing to sell Imugene shares, following the termination of its supply agreement with Merck.

The most traded stocks by Bell Direct clients yesterday included Fortescue Metals Group (ASX:FMG), ANZ (ASX:ANZ) and Macquarie Group (ASX:MQG).

In the US, the sell-off continued with all three benchmarks coming under pressure. The Dow Jones fell more than 600 points, the S&P500 down 3.2% and the Nasdaq slipped 4.3%. All sectors were in the red, apart from the consumer staples sector. Amid the losses, the benchmark 10-year Treasury yield hit its highest level since late 2018, trading well above 3%, which continued to crush tech names like Meta, Alphabet, Netflix, and Apple.

What to watch today:

  • If you go by the SPI futures, the market is set to open 1.39% lower.
  • Reporting wise, capital market business, Pendal Group (ASX:PDL) will be releasing its half-year results today.
  • Economic news wise, business confidence for April will be announced today. Business confidence currently stands at a five-month high of 16 points, however April’s reading is forecasted to fall to 12 points.
  • Moving to commodities, the oil price tumbled around 6% as China’s lockdowns weigh on demand outlook. The gold price extended its decline to fall more than 1% on Monday, as the US dollar pushed to near two-decade highs. And the spot iron ore price has fallen about 4%, trading at $US136 a tonne.
  • Private toll road developer, Atlas Arteria (ASX:ALX) is holding its AGM today.

Trading Ideas:

  • Citi have maintained its Buy rating on Domino’s Pizza (ASX:DMP) with a price target of $108.42. At its current share price $67.60, this implies about 60% share price growth in a year.
  • Trading Central has a bearish signal on Northern Star Resources (ASX:NST) indicating that the stock price may fall from the close of $9.06 to the range of $7.10 – $7.50 in the next 35 days according to standard principals of technical analysis.

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