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Morning Bell 13 October

Grady Wulff
October 13, 2022

The US markets closed lower on Wednesday and the US dollar retreated as investors digested the Fed’s latest FOMC minutes released overnight.

For the most part, the FOMC minutes were in-line with expectations of further aggressive rate hikes by the Fed to come, but investors also noted that many Fed officials ‘emphasised the cost of taking too little action to cool inflation outweighed the cost of taking too much action’ but the Fed’s are aware of the possible consequences of hiking interest rates too rapidly.

The Dow Jones industrials index fell 0.1%, the Nasdaq closed 0.09% lower and the S&P500 ended the day down 0.33%.

Also overnight, the FDA approved new Omicron-targeted COVID-19 booster shots from Pfizer and Moderna for administration in children.

OPEC+ has slashed its forecast for global economic growth and crude oil demand in a move to justify its move last week to cut daily oil production by 2 million barrels per day. OPEC+ said a host of factors including escalating tensions between Russia and Ukraine, rising inflation, and aggressive action by the central banks, were behind its forecasted decline in demand for crude oil.

Over in Europe and the UK, markets extended their sell-off into a 6th consecutive session with Germany’s DAX ending the midweek session down 0.4%, while the French CAC lost 0.25%.

The UK’s FTSE100 was also sold off, ending the day down 0.86%.

On the commodities front, brent crude oil continues to decline this morning, trading 1.84% lower at US$92.56/barrel, gold is trading 0.54% higher at US$1674/ounce and iron ore is trading 0.5% lower at US$97.50/ton.

What to watch today:

  • Ahead of the local trading session, ASX futures are expecting the Australian market to open 0.27% lower, weighed down by the global sell-off overnight.
  • On the economic data front today, investors will be keeping a close eye on Core inflation data for September in the US which is out later tonight.
  • Stocks going ex-dividend today include CPT Global (ASX:CGO) and Katana Capital (ASX:KAT). If you have been thinking about these stocks it might be worth considering buying in today as stocks going ex-dividend generally trade lower on the ex-dividend date.

Trading Ideas:

  • Trading Central has identified a bullish signal on Select Harvests (ASX:SHV) following the formation of a pattern over a period of 19-days which is roughly the same amount of time the share price may rise from the close of $5.12 to the range of $5.85-$6.05 according to standard principles of technical analysis.
  • Trading Central has also identified a bearish signal on Mineral Resources (ASX:MIN) following the formation of a pattern over a period of 21-days which is roughly the same amount of time the share price may fall from the close of $70.12 to the range of $57-$60 according to standard principles of technical analysis.

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