Morning Bell 15 June

Jessica Amir
June 15, 2020

The Aussie share market is eyeing a lift of 0.4% at the open following commodities rallying on Friday.

The Australia Prime Minister is expected to outline details of the Government’s JobMaker plan, as well as increased spending on infrastructure projects including the expansion of BHP’s Olympic Dam in South Australia.

Investors will be watching Healius (ASX:HLS) and Select Harvest (ASX:SHV).

Trading ideas:

  • Citi estimates there is a 85% downturn of global share markets, suggesting there will be more bad news to come. So in this instance, you might like to consider looking at short ETFs to hedge your portfolio. You could consider (ASX:BEAR), (ASX:BBOZ) and (ASX:BBUS).
  • UBS has given Seven Group Holding (ASX:SVH) a price target of $19, expecting a 9.5% rise from Friday’s close of $17.35. Macquarie increased its target to $19.10 and Credit Suisse increased its target to $20.35.
  • Macquarie increased Santos’ (ASX:STO) price target to $6.05.
Read Transcript

Good morning, well the Australian Prime Minister today is expected to outline more details of the Government’s JobMaker plan, as well as increased spending on infrastructure projects including the expansion of BHP’s Olympic Dam in South Australia.

But today the focus for many will be if the Aussie share market will claw back some of Thursday’s and Friday’s losses or if we’ll enter a kangaroo market with big swings until the second COVID-19 wave comes to an end overseas.

Now Wall Street had a positive close on Friday, the oil price rallied 1%, the iron ore price gained 0.8% while the gold price lifted 0.4% to $1,740 USD.

So today we should see a bit of a bounce, the futures are suggesting a lift of 0.4% or 24 points.

As for key standout U.S. stocks, on Friday Carnival shares rose 15%, Delta Air up 12%, the Dow Jones ended 477 points higher or 1.9%, the S&P500 up 1.3% and the Nasdaq followed 1% higher.

Now what to watch locally today, well Healius (ASX:HLS) has announced the sale of its medical centers to BGH Capital for $500 million.

Also it can focus on 3 things: pathology, imaging and day hospitals.

Secondly, Select Harvests (ASX:SHV) goes ex-dividend on Thursday, transferring the dividend right to shareholders.

You can expect buying of Select Harvests to push its shares up higher this week.

And lastly, you need to start to think about the JobKeeper and JobSeeker being wound back in this case.

Citi says CBA should stand the tallest as it’s in the best shape out og all the banks and lenders, while newcomers to the market are likely to see a squeeze by people defaulting on their mortgages.

Now for local trading ideas, well Citi today has come out saying there is a 80% probability that the market will fall lower suggesting last Thursday and Friday’s sell down was not it and there could be  more bad news to come, so in this instance you might like to consider looking at short ETF’s to hedge your portfolio.

You could consider: (ASX:BEAR), (ASX:BBOZ) and (ASX:BBUS).

Secondly, UBS met with Seven Group Holdings’ (ASX:SHW) CEO and CFO and UBS reckons the new fleet orders of Caterpillar goods will continue to ramp up and underpin the company’s future growth, particularly of its WestTrac division.

Now Seven Group Holdings closed at $17.35 on Friday, UBS targets $19, Macquarie increased its target today to $19.10 and Credit Suisse also increased its target to $20.35.

The 30 percent% Santos (ASX:STO) owned gas development project in Queensland received state government approval for its development of the project.

Macquarie increased Santos’ price target to $6.05, the project is also 40% owned by a smaller company called Comet Ridge (ASX:COI). Bell Potter backs that stock as a buy increasing its price target to $0.19, on Friday it closed at $0.10.

I’m Jessica Amir with Bell Direct, happy trading and stay safe.

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