Morning Bell 2 November

Paulina Peters
November 2, 2021

Yesterday, the ASX200 started the month of November with an advance of 0.6%, supported by a busy session of merger and acquisition activity. All sectors of the market gained ground, except for the Financials sector which fell 0.48%.

In the US, the Dow, S&P500 & Nasdaq all closed at record highs to start the month of November. Stocks linked to the economic recovery performed well, including Ford, airlines, and retailers. While mega cap tech stocks underperformed.

After a positive session on Wall Street, the futures as at 7:40am AEDT this morning are suggesting the Aussie share market will open 0.18% higher.

What to watch today:

  • In economic news, the Manufacturing PMI for October was released yesterday. The PMI in October was revised to 58.2, which marked the strongest expansion in factory activity in 4 months. As a reminder, given the reading came in above 50 points, that indicates an expansion of the manufacturing sector compared to the previous month.
  • Today, the RBA, meets at 2:30pm AEDT to discuss the cash rate. While it’s expected that central bank will keep rates on hold at the current historical low of 0.1%, it’s also expected that the RBA will signal the end of quantitative easing, scrap its yield target framework, and could bring forward its rate hike guidance.
  • Keep an eye on travel stocks today after international travel resumed yesterday in Australia for the first time in 600 days. Travel stocks posted solid gains yesterday. Qantas (ASX:QAN) was up 3% and Flight Centre (ASX:FLT) up 2%.
  • Brickworks (ASX:BKW) goes ex-dividend today.
  • Oil prices rose sharply on strong demand outlook, despite China fuel reserves releasing. And the gold price also rose as the dollar eased.

Trading Ideas:

  • Bell Potter has reiterated its BUY recommendation on iron ore company, Fortescue Metals (ASX:FMG), with a revised price target of $19.75. FMG is currently down nearly 39% YTD, and closed 2.9% higher yesterday to $14.33, which implies 37.8% share price growth.
  • Bullish charting signals have been identified in AVZ Minerals (ASX:AVZ), Hazer Group (ASX:HZR) and Seek (ASX:SEK) and that’s according to Trading Central.

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