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Morning Bell 23 August

Paulina Peters
August 23, 2022

Our local market came under pressure yesterday, closing 1% lower. It was a sea of red, with all eleven industry sectors declining. Leading the losses was both the consumer discretionary and tech sectors, after a number of company announcements as well as speculation of aggressive US policy tightening to control inflation.

The best performing stock was NIB Holdings (ASX:NIB), after the private health insurer released its full year results, which showed a 7.2% increase in revenue, but a decline in its net profit, however the decline was slightly ahead of estimates. Other top performers included EML Payments (ASX:EML), Pilbara Minerals (ASX:PLS) and Telix Pharmaceuticals (ASX:TLX). Meanwhile, Adbri (ASX:ABC) tumbled 17% after wet weather disruptions and rising fuel and energy prices impacted its profits.

Some of the most traded stocks by Bell Direct clients yesterday included BHP Group (ASX:BHP), the BetaShares Australian Strong Bear Hedge Fund ETF (ASX:BBOZ) and aerial imagery technology business Nearmap (ASX:NEA).

In the US, all three benchmarks started the new trading week in the red after renewed fears of aggressive rate hikes returned to Wall Street. Consumer discretionary, communication services and tech stocks were hit the hardest. So we saw the Dow tumble more than 600 points, experiencing its worst day since June. The S&P500 was down 2.1% and the Nasdaq fell 2.6%.

What to watch today:

  • Following the US, the SPI futures are suggesting that our market will follow with a fall of 0.6% at the open.
  • Companies reporting their earnings today include: AMA Group (ASX:AMA), Alumina (ASX:AWC), Boral (ASX:BLD), Breville (ASX:BRG), Estia Health (ASX:EHE), Monadelphous (ASX:MND) and HUB24 (ASX:HUB).
  • In commodities:
    • Oil prices traded flat following the Saudi energy minister stating that OPEC could cut production to confront market challenges.
    • The gold price declined as the US dollar rallied and as the looming interest rate hikes dented bullion’s appeal.
    • The spot iron ore price is trading flat at US$104 a tonne.
  • Some stocks going ex-dividend today include: intellectual property services group IPH (ASX:IPH), Domain Holdings (ASX:DHG) and Qualitas (ASX:QAL).
  • If you hold Transurban Group (ASX:TCL) you will receive your dividend payment today.
  • Testing, inspection and certification business ALS (ASX:ALQ) will be holding its AGM today.

Trading Ideas:

  • Potter have maintained its Buy rating on Accent Group (ASX:AX1) and have increased its price target from $1.90 to $2. At its current share price of $1.71, this implies about 17% share price growth in a year.
  • Trading Central has a bearish signal on Dexus (ASX:DXS) indicating that the stock price may fall from the close of $9.01 to the range of $8.56 – $8.64 in the next 33 days according to standard principals of technical analysis.

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