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Morning Bell 22 August

Sam Kanaan
August 22, 2023

Wall St has ended mixed on Monday as the Nasdaq ended its four-day losing streak. The S&P 500 rose 0.69% while the Nasdaq added 1.56%. On the other hand, the Dow Jones closed marginally lower by 0.11%.

Earnings season continued on Monday with Palo Alto Networks releasing stronger-than-expected results, which saw its share price rise 14.5% on Monday. Tesla and Meta also climbed 7% and 2.4% respectively to rebound from recent losses.

The 10-year Treasury note yield has reached a high of 4.34%, its highest level since November 2007. This is usually bad for tech and growth stocks as it lowers their promised future earnings.

Over in Europe, markets closed marginally higher after hitting a six-week low at the end of last week. The STOXX 600 ended the day 0.1% higher, with auto stocks leading gains, up by 1.1%. Germany’s DAX finished the day up 0.19%, the French CAC rose 0.47% and, in the UK, the FTSE 100 ended the day marginally lower by 0.06%.

Locally yesterday, the ASX200 closed 0.46% lower as the consumer staples sector closed 1.34% lower followed by the info tech sector closing 1.32% lower. The heavy losses were partially offset by the consumer discretionary sector ending the day 0.83% higher.

What to watch today:

  • The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.24% at the open this morning.
  • On the commodities front this morning,
    • Oil is down 0.52% to US$80.82 a barrel as concern over China’s economy sparks a concern on market sentiment.
    • Gold is up 0.35% to US$1894 an ounce as China premiums on gold hit its highest level since December 2016.
    • And iron ore is up 0.93% to $US108.50 a tonne as steel hubs are yet to follow through on production cuts.

Trading Ideas:

  • Bell Potter maintains a buy rating on Elders (ASX:ELD) but have raised the 12-month price target on the agriculture company by 15 cents to $7.40. Turnoff volumes have continued to recover from the lows experienced in the 2nd half of FY23 and cattle turnoff volumes are up 19% year-on-year.
  • And Trading Central has identified a bullish signal in IGO Ltd (ASX:IGO), following the formation of a pattern over a period of 26-days which is roughly the same amount of time the share price may rise from the close of $12.48 to the range of $15.90-$16.70, according to the standard principles of technical analysis.

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