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Morning Bell 16 November

Grady Wulff
November 16, 2022

The US markets rebounded on Tuesday to close higher across the key indices following the release of US producer price index data that measures wholesale inflation, for October showing an increase of just 0.2% which was below market expectations and is another sign inflation is slowing in the region. The tech-heavy Nasdaq led the gains adding 1.27% on Tuesday, while the Dow Jones and S&P500 also each lifted 0.02% and 0.7% respectively. Over in the US it has been a turbulent time for technology stocks of late with interest rates rising meaning financing growth becomes more expensive. As a result, we have seen mass lay-offs from tech giants including Twitter cutting around 3700 jobs, Amazon reportedly releasing 10,000 employees, Stripe axing 14% of its staff and Meta cutting 11,000 jobs in the biggest tech layoff of 2022, so today’s rally on the Nasdaq will bring a brief relief for tech stocks.

Over in Europe, markets advanced on the back of that US producer price index data being released, with the STOXX 600 adding 0.2%, while Germany’s DAX and the French CAC each added almost 0.5%. In the UK, the FTSE100 bucked the trend, closing the day down 0.21%, amid UK property data indicating new homebuyer enquiries plunged in October to the lowest level since the 2008 GFC, according to the latest RICS housing surveyors report for the last week, adding to further fears of a deep recession to come.

What to watch today: 

  • Ahead of the local trading session the SPI futures are expecting the ASX to open just 0.04% higher on the back of the rally on Wall Street.
  • In commodities, crude oil is trading slightly higher this morning, up 0.68% to US$86.45 per barrel, gold is trading mostly flat at US$1772 per ounce, natural gas is up 2.68%, and iron ore is continuing to surge, up 3.74% this morning at US$97 per tonne.
  • There is no local economic data out today however investors will be tuning in to a number of key Federal Reserve speeches in attempt of gaining a glimpse at how aggressive the Fed’s will continue raising interest rates moving forward.
  • The Aussie dollar has strengthened overnight to buy 67.75 US cents, 57 British Pence, 94.44 Japanese Yen and NZ$1.10.

Trading Ideas:

  • Trading Central has identified a bullish signal on Mach7 Technologies (ASX:M7T) following the formation of a pattern over a period of 18-days which is roughly the same amount of time the share price may rise from the close of $0.56 to the range of $0.64 to $0.66 according to standard principles of technical analysis.
  • Trading Central has identified also identified a bullish signal on Magnis Energy Technologies (ASX:MNS) following the formation of a pattern over a period of 36-days which is roughly the same amount of time the share price may rise from the close of $0.42 to the range of $0.47 to $0.49 according to standard principles of technical analysis.

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