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Morning Bell 17 March

Paulina Peters
March 17, 2022

Before we begin, we wanted to let you know that this week, we’ve donated $10,000 to Foodbank, as the clean-up and support efforts continue through flood affected regions in Australia. Foodbank is an organisation that is supplying food and water to the front line of the flood crisis including the SES volunteers. To help support the cause, you can donate here:

Yesterday, the local market advanced 1.1%, with all sectors closing in the green. The broad rally was led by the tech sector, which gained 3.3%, while the energy sector performed the worst, lifting just 0.2%, following a further decline in the oil price.

Looking at the ASX200 leaderboard, five of the top 10 best performing stocks, were tech shares, including Life360 (ASX:360) which was up the most, rising 7.4%. On the flip side, Super Retail Group (ASX:SUL) and Nanosonics (ASX:NAN) both declined around 3%, and Uniti Group (ASX:UWL) dropped 1.3%, as investors may have taken a bit of profit off the table following the stocks strong rise on Tuesday, after confirmation that it was in takeover talks.

The most traded stocks by Bell Direct clients yesterday, Lake Resources (ASX:LKE) was again on top of the list, lifting over 11% yesterday, set to be added to the ASX300 Index on the 22nd of March. Also highly traded was the Vanguard Australian Fixed Interest Index ETF (ASX:VAF), BHP Group (ASX:BHP) and Telstra (ASX:TLS).

Moving to the US, all three benchmarks closed in the green after the US Federal Reserve announced its first rate hike in more than three years, with officials indicating an aggressive path ahead, meaning we could see further rate rises at each of its remaining six meetings of this year. The Fed approved a 0.25% rate hike, which brings the rate now into a range of 0.25% – 0.50%.

What to watch today:

  • Following the positive session in the US, the futures are suggesting that the Aussie share market is set to open 1.6% higher this morning.
  • In commodities, the oil price continued to sink following Russia-Ukraine optimism and an increase in US inventories. The oil price is currently trading at US$95 a barrel. The gold price remained steady, at US$1,926 an ounce, after the US Fed hiked rates as expected. And the seaborne iron ore price is currently trading higher at US$148 a tonne.
  • In economic news, the unemployment rate for February will be released today. As a reminder, the unemployment rate came in at 4.2% in January, which was unchanged from the month prior. For today, consensus is expecting February’s rate to come in at 4.1%.
  • Coronado Global Resources (ASX:CRN), DDH1 (ASX:DDH), PWR Holdings (ASX:PWH), Genesis Energy (ASX:GEN), Fletcher Building (ASX:FBU) and electricity generation company Meridian Energy (ASX:MEZ) are set to go ex-dividend today.

Trading Ideas:

  • Bell Potter have maintained its BUY rating on drilling contractor DDH1 (ASX:DDH) with a price target of $1.56. Bell Potter expects ongoing rig fleet growth to drive calendar year 2022 earnings, while normalising domestic border conditions present operational upside. DDH closed flat yesterday at $1.04, which implies about 50% share price growth in a year.
  • Trading Central has a bullish signal on Alpha HPA (ASX:A4N), indicating that the stock price may rise from the close of $0.57 to the range of $0.61 – $0.63 in the next 16 days according to standard principals of technical analysis. Bell Potter also has a speculative BUY rating on the stock with a 12-month valuation of $0.96.

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