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Morning Bell 14 August

Grady Wulff
August 14, 2023

Wall Street closed mixed on Friday with the Nasdaq posting a second weekly loss for the first time in 2023 as semiconductor stocks weighed on the tech heavy index. Over the week, the Dow Jones added 0.6%, while the S&P500 and Nasdaq each dropped 0.3% and 1.9% respectively.

July producer price index data was released in the U.S. on Friday and confirmed inflation remains sticky in the region. The data showed a rise of 0.3% on June which was above the 0.2% economists were expecting.

News Corp shares rallied on Friday after the media company reported an earnings beat in Q4.

Over in Europe, markets closed lower on Friday as investors continued to digest corporate earnings results alongside the release of unfavourable PPI data in the U.S. The STOXX600 fell 1.1% on Friday while Germany’s DAX lost just over 1%, the French CAC fell 1.26%, and in the UK, the FTSE100 fell 1.24%.

On Friday, UK economic output data was released showing economic output grew by 0.5% in June, which was higher than the expected growth of 0.2%.

Locally on Friday, the ASX200 fell 0.24%, weighed down by a sharp sell-off in the energy sector, while consumer discretionary and health care stocks offset some of the heavy losses to end the week higher. The sell-off on Friday was driven by investors responding to a slew of earnings results released including Baby Bunting dropping almost 2% after profit fell 51% and the full year dividend was slashed by 52% in addition to cost-cutting measures announced in the FY23 results.

What to watch today:

  • Ahead of the local trading session here in Australia, the SPI futures are expecting the ASX to open 0.41% lower to start the new trading week in the red.
  • On the commodities front this morning, oil is trading 0.3% lower at US$82.96/barrel, gold is up 0.08% at US$1915/ounce and iron ore is up 1.93% at US$105.50/tonne.
  • Stocks trading ex-dividend today include EUROZ Hartleys Group (ASX:EZL) and Suncorp Group (ASX:SUN). If you’ve been thinking about these stocks, it might be worth considering buying in today as stocks trading ex-dividend generally trade lower on the ex-dividend date.
  • AU$1.00 is buying US$0.65, 94.14 Japanese Yen, 51.35 British Pence and NZ$1.08.

Trading Ideas:

  • Bell Potter has initiated coverage on Task Group Holdings (ASX:TSK) with a buy rating and a 12-month price target of $0.62. Task Group is an end-to-end Transaction Management and Customer Engagement platform that delivers a B2B Software as a Service solution to high quality enterprise clients including McDonalds, Starbucks and Compass Group in Australia, to manage the experience for customers from pre-order to payment. Bell Potter sees Task is trading at a 20% discount to global industry peers and the buy recommendation is based on the company’s exposure to future-facing growth and profitability.
  • And Trading Central has identified a bullish signal on Harvey Norman (ASX:HVN) following the formation of a pattern over a period of 34-days which is roughly the same amount of time the share price may rise from the close of $3.87 to the range of $4.35 to $4.45 according to standard principles of technical analysis.

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