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Morning Bell 19 July

Paulina Peters
July 19, 2022

Our local market started the new trading week with a gain of 1.2%, supported by a strong session on Wall Street and in Europe on Friday.

Sectors wise, tech stocks led the day’s gains. Energy stocks also performed well after Brent oil prices jumped on Friday. Financials climbed about 1.4%, with three of the big four banks rising. Meanwhile, the healthcare sector dropped 0.5%.

The best and worst ASX200 performers: BrainChip (ASX:BRN) surged 13.9%, following strong gains on the Nasdaq on Friday. BRN was not alone, other tech stocks also lifted, like Life360 (ASX:360), NOVONIX (ASX:NVX) and WiseTech Global (ASX:WTC). Building materials supplier, Boral (ASX:BLD) closed in the green also, up 6.2%. On the flip side, the worst performers included a2 Milk (ASX:A2M), Fisher & Paykel Healthcare (ASX:FPH) and Endeavour Group (ASX:EDV).

The most traded stocks by Bell Direct clients yesterday included Sims (ASX:SGM), PayGroup (ASX:PYG), the BetaShares Australian Strong Bear Hedge Fund (ASX:BBOZ) and Whitehaven Coal (ASX:WHC).

Moving to the US, all three benchmarks closed lower following a late selloff that wiped out some strong intraday gains. The Dow closed 200 points lower and the S&P500 and Nasdaq both declined 0.8%.

What to watch today:

  • Following the negative session in the US, the SPI futures are suggesting that our market will open 0.32% lower.
  • Keep an eye on ANZ (ASX:ANZ) and Suncorp (ASX:SUN), after Suncorp accepted a $4.9 billion bid from ANZ to take over its banking business. ANZ is currently in a trading halt while it goes to its shareholders to raise $3.5 billion in additional funds to pay for the deal. This isn’t expected to be completed for at least 12 months as it requires a number of regulatory approvals.
  • In economic news, today sees the release of the minutes from June’s monetary policy meeting held by the RBA.
  • There are a number of Australian commodity companies reporting their Q4 results this week, including lithium player, Allkem (ASX:AKE) and oil companies Beach Energy (ASX:BPT) and Woodside Energy (ASX:WDS). Today, we’ll hear from the largest company on the ASX, BHP Group (ASX:BHP).
  • Other companies reporting today include HUB24 (ASX:HUB) and Ampol (ASX:ALD).
  • In commodities, oil prices lifted, boosted by growing concerns over gas supply from Russia and a lower dollar. The gold price firmed, as the pullback in the dollar helped bullion recover some of its recent losses. The spot iron ore price trades 4.3% lower at US100 a tonne.

Trading Ideas:

  • Bell Potter have maintained its Buy rating on Whitehaven Coal (ASX:WHC). WHC reported unaudited financial year 2022 EBITDA of $3b and year end net cash of $1b, which Bell Potter highlighted was an outstanding result. The better than expected result was driven by record thermal coal prices and strong price realisation. Yesterday, WHC rose 5.6% off the back of these strong results.
  • Trading Central has a bullish signal on investment advice company, Praemium (ASX:PPS) indicating that the stock price may rise from the close of $0.68 to the range of $0.87 – $0.91 in the next 53 days according to standard principals of technical analysis.

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