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Morning Bell 17 January

Sophia Mavridis
January 17, 2023

US markets were closed for the Martin Luther King holiday, but coming up this week in the US are Q4 earnings results, with Netflix and State Street announcing results Thursday and Friday.

European equities mostly ended their start to the week with modest gains. A key focus for European markets this week is the World Economic Focus in Switzerland, where the heads of state, business leaders and academics debate and discuss certain topics. The key themes this week are the war in Ukraine, economic uncertainty and climate change.

And we’re seeing defensive sectors under-performing around the world so far in 2023, notably healthcare and utilities. Australian utilities are more than 6% behind.

What to watch today:

  • Despite the positive run overnight, the SPI futures are suggesting the Australian market will drop 0.29% at the open this morning.
  • Super Retail (ASX:SUL)’s share price may continue to advance today after yesterday’s rally off the back of a strong update, with Goldman Sachs reiterating a buy rating on the stock with an improved price target of $14.20.
  • Watch HUB24 (ASX:HUB), scheduled for a market update, and Rio Tinto (ASX:RIO) set to announce a quarterly production update.
  • Katana Capital (ASX:KAT) and Tower (ASX:TWR) are set to go ex-dividend today.
  • In commodities,
    • The oil price has dropped, after advancing 8% last week, as China’s reopening from COVID curbs raised hopes for a boost in economic activity, with analysts forecasting that oil demand in China will likely hit a record this year.
    • Gold is currently trading slightly in the red, however is hovering at its strongest levels in nearly nine months.
    • And iron ore has jumped more than 2.4% higher to US$127 per tonne, the highest since mid-June, due to continued optimism about demand prospects in China and weakening supply concerns.
  • In economic data, at 10:30am AEDT Westpac will release its data on consumer confidence.

Trading Ideas:

  • Bell Potter maintain a BUY rating on Janus Henderson (ASX:JHG), ahead of the release of the company’s full year results for 2022, which will be out on the 2nd of February. Bell Potter have slightly upgraded their FY22 funds under management forecast to $279 billion from $263.5 billion previously. As a result, EPS is 0.6% higher for FY22, 5.5% higher for FY23 and 5.6% higher for FY24. EBITDA is also 0.6% higher in FY22, and 5.6% and 5.5% higher in FY23 and 24 respectively. Their dividend forecast in Australian dollars has increased, reflecting the currency movements applied to a US dollar dividend. Bell Potter have lowered their price target from $45.37 to $43.81, and at JHG’s current share price of $38.27, this implies 14.5% share price growth in a year.
  • Trading Central have identified a bullish signal in BetMakers Technology Group (ASX:BET) indicating that the stock price may rise from the close of $0.29 to the range of $0.33 to $0.35 over 44 days, according to the standard principles of technical analysis.

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