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Morning Bell 17 October

Sam Kanaan
October 17, 2023

Wall St rallied overnight following the release of positive corporate earnings despite rising treasury yields. The Dow Jones rose 0.93%, the S&P closed 1.06% higher and the tech-heavy-Nasdaq ended Monday 1.20% in the green.

In terms of US stocks, Nike and Travelers Companies lead the way, up 2.1%, with all 11 sectors in the S&P 500 trading higher.

Earnings season is ramping up with Johnson & Johnson, Bank of America, Netflix and Tesla all set to release results this week. Charles Schwab closed 4.7% higher overnight after exceeding expectations for earnings per share in the third quarter. This followed with JPMorgan Chase, Wells Fargo and United Health all posting positive quarterly results.

Over in Europe, markets ended Monday in the green as investors react to the escalating war in the Middle East. The STOXX600 rose by 0.2%, led by retail stocks which gained 2%. Germany’s DAX and the French CAC rose by 0.34% and 0.27% respectively with the UK’s FTSE100 also jumping 0.41% overnight.

Locally yesterday, the ASX 200 closed 0.35% lower with eight out of the eleven sectors finishing lower, led by losses in the information technology sector of 2.79%. However, this was slightly offset by the energy sector which saw a 0.63% increase on Monday.

What to watch today:

  • The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.68% at the open this morning.
  • In terms of economic data today, the RBA meeting minutes will be released today, following the decision to leave the cash rate unchanged at 4.1%.
  • On the commodity front this morning,
    • Oil is down 0.79% to 87 US dollars a barrel as traders continue to look at the Hamas-Israel war and the effect it will have on global oil supply.
    • Gold is down 1% to 1912 US dollars an ounce, as once again investors await on the impacts the Middle East war will have on the global economy which may have adverse effects on the precious metal.
    • And iron ore up 2.58% to 119 US dollars and 50 cents a tonne with Beijing announcing that it is considering raising its budget deficit this year to deliver a fresh round of stimulus for new infrastructure projects.

Trading Ideas:

  • Trading Central has identified a bearish signal in Johns Lyng Group (ASX:JLG), indicating that the stock price may fall from the close $6.22 to the range of $5.60-$5.70, over a pattern formed in 34 days, according to the standard principles of technical analysis.
  • And Trading Central identified a bullish signal on Perseus Mining (ASX:PRU), indicating that the stock price may rise from the close of $1.65 to the range of $1.94 to $2.00, over a pattern formed over 20 days, according to the standard principles of technical analysis.

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