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Morning Bell 23 November

Grady Wulff
November 23, 2023

Wall St’s November rally reignited on Wednesday with the key indices closing the session higher ahead of the Thanksgiving Day holiday as a decline in bond yields boosted investor sentiment on an equities front, alongside investors remaining optimistic that the US cash rate will be maintained at the Fed’s December meeting. The Dow Jones rose 0.5%, the S&P500 added 0.4% and the tech-heavy Nasdaq rallied 0.5%.

Over in Europe, markets closed mostly higher on Wednesday as investors digested the latest FOMC meeting minutes out in the U.S. alongside several fiscal announcements out of the U.K.

The STOXX600 rose 0.3% buoyed by travel and leisure stocks while oil and gas stocks fell 1.7%. Germany’s DAX rose 0.36% on Wednesday, the French CAC added 0.43%, and, in the U.K., the FTSE100 fell 0.17%.

U.K. finance minister Jeremy Hunt announced a tax cut impacting 27 million workers in addition to new and changes to existing measures including benefits programs, raising the minimum wage, investing in AI, business tax breaks and more. Despite these favourable measures, the U.K.’s FTSE100 closed lower on Wednesday.

Locally on Wednesday, the ASX fell just 0.07%, taking lead from the US and European sell-off on Tuesday weighed down by rate-sensitive sectors as the REIT and tech-sectors fell 1.53% and 1.13% respectively at the closing bell of the midweek session.

De Grey mining rose 4.8% after Bell Potter released a broker note responding to positive drill results out of the gold miner on Wednesday. Bell Potter retained its buy rating following positive results out of the company’s Hemi gold project.

Lovisa shares also lifted 2% on Wednesday after the fashion jewellery company released a trading update at its AGM including overall sales up strongly, driven by the company’s strong global rollout strategy with the first store in China on the horizon soon.

What to watch today:

  • Ahead of the local trading session here in Australia, the SPI futures are anticipating the ASX to open Thursday’s session down 0.17% despite the overnight rally on Wall St.
  • On the commodities front this morning, oil has dipped 1.45% to trade at US$76.65/barrel after OPEC+ delayed a meeting to further discuss production cuts to stabilise oil prices. Gold is down almost half a percent at US$1989/ounce and iron ore is up 0.73% at US$137.50/tonne.
  • AU$1.00 is buying US$0.65, 97.86 Japanese Yen, 52.45 British Pence and NZ1.09.

Trading Ideas:

  • Bell Potter has reduced the 12-month price target on Brickworks (ASX:BKW) from $28.50 to $27.80 and maintain a buy rating on the leading industrial conglomerate following a 1st quarter trading update at the company’s AGM including the Building Products division in Australia and the US remaining resilient, and margin improvement across both regions. The reason for the target price decrease is due to Brickworks’ revised cap rate of 5.2% and the outlook for further devaluation to come among industrial properties Bell Potter covers.
  • And Trading Central has identified a bearish signal on HelloWorld Travel (ASX:HLO) following the formation of a pattern over a period of 20-days which is roughly the same amount of time the share price may fall from the close of $2.44 to the range of $2.00 to $2.08 according to standard principles of technical analysis.

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