Morning Bell 17 July

Jessica Amir
July 17, 2020

The Aussie share market is eyeing a 0.3% lift at the open.

Yesterday we had mostly encouraging economic news with the Aussie employment rate rising more than expected.

U.S. industrial and manufacturing activity beat expectations, but overnight U.S. weekly unemployment claims unexpectedly rose, spooking investors and giving them an excuse to take recent profits off the table.

Trading ideas:

  • UBS increased Audinate’s (ASX:AD8) buy rating and price target to $7.80, yesterday it closed 1.5% lower at $5.30.  This doesn’t take away from its 118% gain from the COVID-19 low.
  • Ahead of CBA’s (ASX:CBA) full financial year results being released on Wednesday 12 August, Bell Potter rose CBA’s price target to $78.00, yesterday it closed 0.1% lower to $72.64. CBA shares are up 34% from their COVID-19 bottom.
  • Life 360 (ASX:360) had its buy rating and price target upgraded by Bell Potter to $4.80. Yesterday it closed 5.2% higher at $3.03, giving it a total gain of 89% from its COVID-19 low.
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Good morning, thanks for your company this Friday the 17th of July.

Yesterday we had mostly encouraging economic news that Australian employment rose more than expected and U.S. industrial and manufacturing activity was better expectations, suggesting the recovery was intact.

But overnight, a bit of a speed bump. U.S. weekly unemployment claims unexpectedly rose spooking investors, giving them an excuse to look in a recent profits.

But it wasn’t all dark and stormy.

U.S. retail sales rose 7.5% in June following the record lift in May.

The sales boost also beat expectations for the month as Americans continue to fork out cash on clothing, electronics, home appliances, furniture, sporting goods, music and books.

On the company side of things Johnson & Johnson reported better than expected quarterly earnings and its shares lifted 0.7%.

Morgan Stanley’s quarterly earnings easily beat expectations amid surging trading revenues and their shares popped 2.5% higher.

As for big tech names trading at record highs on the back of behavioral shifts, well they took a bit of a breather with Apple and Microsoft shares losing over 1% each.

In after-hours trade Netflix shares fell 11% after announcing second quarter earnings below expectations, while subscribers and revenue rose more than forecast.

But what alarmed investors was perhaps that next quarters subscriber estimates fell more  than expected.

As for how the broad indices wrapped up the day, the Nasdaq was down the most 0.7%, the Dow lost 0.5% and the broader S&P500 slipped 0.3%.

Looking at commodities, the oil price fell or 1% to US$40.73.

As we reported yesterday, OPEC and its allies will ramp up production.

The gold price fell almost 1%, slipping under its September 2011 high territory, it’s now US$1,798.

The iron ore price lifted ever so slightly 0.1% to US$107.57, another new 11 month high.

So what to watch today, well the Aussies share market is eyeing a lift of 0.3% if you go by the futures.

But you’d think we might see a hesitant start, given the odds are stacked.

Keep in mind the Aussies share market has already put on about 1.6% this week so far, as you can see we’re still sitting with a gain of about 33% from the COVID-19 low.

This evening what to watch in the U.S., housing starts are out for June.

Ending on three trading ideas, following Audinate’s (ASX:AD8) 12-month results update yesterday being released to the market, UBS increased Audinate’s buy rating and price target to $7.80.

Yesterday, it closed 1.5% lower though to $5.30, but that doesn’t take away from its cracking 118% gain from its COVID-19 low.

UBS sees AV training being a key driver for success and the fact that it’s added new products to it’s offering and it’s also driving video opportunities with partners being appointed to drive that growth as well.

Secondly ahead of CBA’s (ASX:CBA) full financial year results being released on Wednesday the 12th of August, Bell Potter rose CBA’s price target to $78.

Yesterday CBA closed 0.1% lower to $72.64.

Bell Potter expects $7.81 billion in cash net profit after tax from continuing operations and a $1 final dividend.

CBA shares are up about 34 % from their COVID-19 bottom.

Thirdly family tracking technology app for your smartphone Life 360 (ASX:360).

They had their buy rating and price target upgraded by Bell Potter to $4.80. Yesterday, the company closed 5.2% higher to $3.03, giving it a total gain of 89% from its COVID-19 low in March.

Bell Potter likes the Life 360’s app new feature including family’s safety assistance that allows 24/7 medical assistance as well an immediate disaster response.

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

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