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Morning Bell 11 August

Sam Kanaan
August 11, 2023

Wall St closed slightly higher on Thursday following the release of key inflation data that came in line with consensus expectations of a slight month-on-month growth by 0.2% while the annual inflation rate rose to 3.2% from 3% in June. While this reading was a slight uptick in inflation, it was expected and the annual rate came in under expectations of 3.3%, indicating inflation in the region remains sticky, but not out of control. On an earnings front, Disney led the Dow Jones higher after releasing third quarter results including a earnings per share of $1.03 which beat expectations and the media giant announced an upcoming price hike for ad-free Disney+ subscriptions.

The Dow Jones added 0.15%, the S&P 500 edged slightly higher by .03% and the tech heavy Nasdaq ended the day up 0.12%.

Over in Europe, markets closed higher on Thursday as positive earnings results were released in the region and investors reacted to US inflation data reading below expectations. The Stoxx 600 finished the day up 0.8% following a 2.2% growth in household goods stocks. The German Dax ended the day up 0.91%, the FTSE 100 closed 0.41% higher and the French CAC rose 1.52% by market close.

Locally yesterday, the Australian market closed 0.26% higher driven by strong gains for the energy and consumer discretionary sectors which rose 2.27% and 0.60% respectively. The strong gains were slightly dampened by a 1.79% drop in the info-tech sector.

What to watch today:

  • The Australian share market is set to open lower, with the SPI futures suggesting a fall of 0.27% at the open this morning.
  • On the commodities front this morning,
    • Oil is down 1.87%, trading at US$82.82/barrel as economic data concerns have renewed demand fears.
    • Gold is down 2.52% at US$1912/ounce after the US announced slower than expected inflation growth.
    • And iron ore is trading down 2% at US$103.50/tonne as disappointing economic data from China has reduced demand in the construction industry.

Trading Ideas:

  • Bell Potter maintains a buy rating on luxury online fashion retailer, Cettire (ASX:CTT) and has increased the 12-month price target on the company from $3.90 to $4 on the back of the company releasing very strong results including sales revenue up 98% on the prior corresponding period, and a healthy demand environment across all of the company‚Äôs operating regions.
  • And Trading Central has identified a bullish signal on Perenti (ASX:PRN), following the formation of a pattern over a period of 29 days which is roughly the same amount of time the stock price may rise from the close of $1.22 to the range of $1.41 to $1.45, according to the standard principles of technical analysis.

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