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Morning Bell 11 July

Grady Wulff
July 11, 2024

Wall Street extended its record run into the midweek session as a sharp rise in semiconductor stocks led the market rally for another day. The rally was also ahead of key US inflation data out on Thursday US time with economists’ expecting the inflation rate month-on-month to rise just slightly by 0.1% in June from May, while the YoY inflation rate is expected to cool to 3.1% in June from 3.3% in May. Core inflation is anticipated to show a 0.2% growth and core inflation yearly is expected to remain at 3.4%. The S&P500 topped 5600 points for the first time overnight and closed with a gain of 1.02% for a seventh straight day of gains and record closes. The Nasdaq added 1.18% on Wednesday to also close at a record high and the Dow Jones overturned its recent slump to close higher. Taiwan Semiconductor stock rose 3.5% after revenue from April to June beat Wall Street estimates while AI darling Nvidia rose 2.7%.

Across the European region markets closed higher on Wednesday after a shaky start to the week with the STOXX 600 rising 0.93% at the end of the midweek session, while Germany’s DAX added 0.94%, the French CAC rose 0.86% and, in the UK, the FTSE100 ended the day up 0.66%.

Asia markets closed mostly higher on Wednesday following the release of key inflation data out in the region. Japan’s Nikkei closed at a fresh record high as corporate goods price index data rose 2.9% in June from a year earlier which met economists’ expectations. Hong Kong’s Hang Seng was flat on Wednesday and South Korea’s Kospi index posted a slight gain at the session’s end.

Despite a strong night on Wall Street on Tuesday, the local market fell 0.16% on Wednesday as the miners weighed on the key index tracking the declining price of iron ore. Communications services stocks rose 1.46% on Wednesday to offset some of the heavy losses among the miners while consumer staples and financial stocks also closed the day in positive territory.

Incitec Pivot (ASX:IPL) shares fell 1.2% after the company ended negotiations with Indonesia’s PT Pupuk Kalimantan Timur for the sale of its fertilisers business. Bell Financial Group (ASX:BFG) shares rallied on Wednesday after announcing the expectation of a 47% rise in first-half PBT to $23.8 million. Immune-oncology company Imugene (ASX:IMU) jumped 6% on Wednesday after announcing it has dosed its first patient in its trial for bile tract cancers.

What to watch today:

  • Ahead of Thursday’s session on the ASX the SPI futures are anticipating the ASX200 to open the day up a sharp 0.94% following Wall Street’s record rally overnight.
  • On the commodities front this morning oil is trading 1.26% higher at US$92.43/barrel, gold is up 0.34% at US$2371.97/ounce and iron ore is up 0.45% at US$110.51/tonne.
  • The Aussie dollar has modestly strengthened overnight to buy US$0.67, 109.09 Japanese Yen, 52.61 British Pence and NZ$1.11.

Trading Ideas:

  • Bell Potter has increased the 12-month price target on Genetic Signatures (ASX:GSS) from 75cps to $1.10 and maintain a speculative buy rating on the specialist molecular diagnostics company following the receipt of first FDA clearance for the company being a transformational milestone, allowing commercialisation into the USA. The FDA-cleared test, called the ‘Gastrointestinal Parasite Detection Kit’ is differentiated from US competitors by its broader coverage of 8 pathogen targets compared to only 3-4 covered by existing multiplex kits. Bell Potter sees first sales in the US are expected in 1HFY25.
  • And Trading Central has identified a bullish signal on Perseus Mining (ASX:PRU) following the formation of a pattern over a period of 23-days which his roughly the same amount of time the share price may rise from the close of $2.51 to the range of $2.72 to $2.76 according to standard principles of technical analysis.

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