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Morning Bell 16 February

Sophia Mavridis
February 16, 2022

The ASX200 closed slightly lower yesterday, as the energy sector lost over 3%, even with the price of oil improving again yesterday. However, energy has been performing very well, so yesterday’s fall may be due to investors taking profits. A few sectors still rose, including tech, real estate, consumer staples and discretionary, communication and industrials.

Sims (ASX:SGM) shares jumped 13.7% off the back of fantastic earnings report. Sales revenue was up 73.9%. Statutory EBIT up 334.9% and underlying EBIT up 541.3%, from the prior corresponding period. Seek (ASX:SEK) also advanced after reporting its earnings. Revenue was up 59% to $517.2 million and NPAT was up 32% to $88.1 million. Dexus (ASX:DXS) also gained after its earnings report.

The most traded stocks by Bell Direct clients yesterday were major banks Westpac (ASX:WBC) and National Australia Bank (ASX:NAB).

European and US equities both closed higher, as Russia and Ukraine tensions started to de-escalate. Russia announced it had begun returning some troops to deployment bases. In New York, the Dow jumped 400 points, closing 1.2% higher after a 3-day losing streak. The S&P500 gained 1.6% and the Nasdaq gained 2.5%.

What to watch today:

  • The SPI futures are suggesting a 0.93% rise at the open this morning.
  • Oil has fallen from its recent peaks. After reaching over 7-year highs on Tuesday, oil is currently trading 3.8% lower at US$91.84 a barrel.
  • The gold price has fallen after sitting at its best levels in 8-months. Gold is 1% lower at US$1,851.68 an ounce.
  • The seaborne iron ore price is 1.3% lower at US$144 a tonne.
  • In economic news, yesterday the RBA released its meeting minutes. There were no new surprises here. The RBA reiterated that they’ll be patient with any interest rate change. And that wages are to grow at the same pace as inflation. With this in mind, yesterday Commonwealth Bank brought forward its tip for the first rate rise of the year. CBA previously said August, however, now expect a potential hike in June, where we may see a 15-basis point lift.
  • CSL (ASX:CSL) is reporting today, and we’ll be bringing you a full report on CSL later today.
  • Commonwealth Bank (ASX:CBA) and Insurance Australia (ASX:IAG) are set to go ex-dividend today.

Trading Ideas:

  • Bell Potter maintain their BUY rating on Money3 Corporation (ASX:MNY), and have increased their price target from $4.35 to $4.60, after the company reported a sold half year result. MNY last closed at $3.12, implying 47.4% share price growth in a year.
  • Trading Central have identified a bullish signal in Woolworths (ASX:WOW), indicating that the stock price may rise from the close of $34.29 to the range of $35.80 to $36.20, over 26 days, according to the standard principles of technical analysis.

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