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Morning Bell 23 September

Paulina Peters
September 23, 2021

Evergrande Group, China’s second biggest property developer, managed to rack up staggering debts of more than $432 billion dollars, on the brink of collapse. However, at the very last minute managed to ink a deal to keep it afloat. News of this deal helped the iron ore price surge and Aussie materials stocks make steep gains, lifting the broader market by 0.32%.

In the US, all three benchmarks closed in the green. This comes after the Fed announced it was not ready to remove stimulus yet. While no specific timeline was provided as to when it may begin moderating its purchases, in the Fed’s post-meeting statement, they noted “if progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted.”

Following a strong night of trade on Wall Street, the futures are suggesting the Aussie share market will open 0.19% higher this morning.

What to watch today:

  • In economic news, the Manufacturing PMI Flash data and the Services PMI Flash data will be released today at 9am AEST.
  • Companies ex-dividend today include Eagers Automotive (ASX:APE), NRW Holdings (ASX:NWH), Cochlear (ASX:COH) and Genesis Energy (ASX:GNE).
  • Suncorp Group (ASX:SUN) holds its AGM today and Brickworks (ASX:BKW) are set to report today.
  • The most traded stocks by Bell Direct clients yesterday included Zip (ASX:Z1P). Its shares lifted 4.3% yesterday to $6.51 following investors responding positively to the company’s strategic US$50 million investment in India-based BNPL operator ZestMoney. ZestMoney was founded in 2015 and is now one of the largest and fastest growing BNPL platforms in India. Another highly traded stock yesterday by Bell Direct clients was Fortescue Metals (ASX:FMG). Its shares lifted 4.2% yesterday, bouncing off 14-month lows following the news that China’s embattled real estate developer Evergrande will meet its bond interest payments due today.
  • The oil price climbed more than 2%, following a greater than expected drawdown of US supplies. The gold price fell after the Fed signalled a sooner than expected interest rate hike, while the palladium price lifted over 6%.

Trading ideas:

  • Bell Potter has maintained its BUY recommendation on iron ore company Fortescue Metals Group (ASX:FMG), however have decreased its price target to $20.87 (previously $22.52). At its current share price value of $15.37, this implies about 36% share price growth.
  • Bullish charting signals have been identified in De Grey Mining (ASX:DEG), Aussie Broadband (ASX:ABB) & REA Group (ASX:REA), according to Trading Central.

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