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Morning Bell 21 September

Grady Wulff
September 21, 2022

Taking a look at the markets overnight, in the US it was a choppy session that ended lower across the key indices as investor confidence slumped ahead of the release of the Fed’s interest rate decision out on Wednesday US time, Thursday our time – the Dow Jones closed Tuesday’s session 1.65% lower, the S&P500 lost 1.62% and the tech-heavy Nasdaq shed almost 1.5%. US housing momentum also fell for a ninth straight month in August as US mortgage rates climbed.

The sell-off continued over in the UK and Europe with the FTSE100 losing 0.61% on Tuesday, while Germany’s DAX fell more than 1% and the French CAC shed 1.35%.

What to watch today:

  • Locally, the RBA’s meeting minutes released yesterday boosted investor confidence that the RBA is a global outlier in pushing ahead with a slower rate of interest rate hikes, a move that other central banks are not even considering yet. Investor sentiment was dampened in recent weeks after US inflation data revealed US CPI remains red hot and above market expectations, prompting the fed to likely introduce a 100 basis point or 1% rate hike on Thursday at the conclusion of the FOMC meeting.
  • Energy, materials and utilities stocks led the market rally yesterday, with New Hope Corporation (ASX:NHC) soaring almost 9% after releasing stellar FY22 results including NPAT soaring over 1100%.
  • Onto the commodities front, the price of commodities are down across the board today Trevor with, Crude oil trading 1.5% lower around 84 US dollars a barrel, Brent is trading, around 90 US dollars a barrel so nearly 2% lower, Iron ore is trading, 1.5% lower at 100 US dollars a tonne and Gold continues its slump, trading down 0.75% at 1663 US dollars an ounce.
  • Ahead of the local trading session today, the ASX futures are expecting the market to open sharply lower around 1.45%, again following the global sell-off overnight.
  • Stocks going ex-dividend today include Capitol Health (ASX:CAJ), Countplus (ASX:CUP), ADBRI (ASX:ABC), Cleanaway Waste Management (ASX:CWT) and Cochlear (ASX:COH). If you have been thinking about these stocks it might be worth considering buying in today as stocks going ex-dividend generally trade lower on the ex-dividend date.
  • There is no local economic data news out today however investors will still be awaiting the release of the Fed’s interest rate decision which is out at 4am eastern time tomorrow morning.

Trading Ideas:

  • Trading Central has identified a bullish signal on Webjet (ASX:WEB) following the formation of a pattern over a 16-day period which is the same amount of time the stock price may rise from the close of $5.43 to the range of $6.15 to $6.35, according to standard principles of technical analysis.
  • Bell Potter has downgraded its price target on Imugene (ASX:IMU) to $0.36 per share from $0.45 and has a speculative buy rating on this stock. The price target downgrade follows Bell Potter identifying the need for the company to raise capital to support its clinical trial programs through the issuing of 400m new shares at $0.20 per share. Bell Potter also notes the company is executing quite a few trials over the next year where investors will be keeping a close eye on the results to determine just how valuable the company’s biotechnology operations are.

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