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Morning Bell 24 August

Paulina Peters
August 24, 2022

The local market closed lower for the second straight session, down 1.2% to close below 7,000 points for the first time in two weeks. Shares were lower after a number of companies reported soft results, including Endeavour Group (ASX:EDV) and online retailer Kogan (ASX:KGN).

Sectors wise, only the energy and utilities sectors posted gains, while the rest of the market was deep in the red, with the consumer staples sector experiencing a hefty 3.8% drop.

Altium (ASX:ALU) jumped 20% higher after impressing the market with its FY22 results that beat expectations. The software company reported a 23% increase in revenue and an EBITDA margin of 36.7%, and its NPAT grew 57%. Meanwhile, the worst performer was Endeavour Group (ASX:EDV) after its disappointing report card.

The most traded stocks by Bell Direct clients yesterday included IDP Education (ASX:IEL), the BetaShares Geared Australian Equity Hedge Fund (ASX:GEAR) and BHP Group (ASX:BHP).

In the US, all three benchmarks fell again for the third session as investors brace for the Federal Reserve Chairman Jerome Powell’s remarks at Jackson Hole on Friday. And European markets also closed lower as investors monitored the rise in oil prices and the August flash PMI which showed that business activity had contracted for the second straight month.

What to watch today:

  • Despite Europe and the US closing lower, the ASX200 is expected to open 0.22% higher if you go by the SPI futures.
  • Confession season continues to be the key focus today with lots of companies reporting. Some to keep an eye on include Coles (ASX:COL), Domino’s Pizza (ASX:DMP), Iluka Resources (ASX:ILU) and WiseTech Global (ASX:WTC).
  • In commodities:
    • Oil prices rebounded strongly as Saudi Arabia hinted the idea at a possible output cut.
    • The gold price rose for the first time in six sessions as the US dollar and Treasury yields fell following weak US business activity data.
    • The spot iron ore price trades at US$105 a tonne.
  • Stocks going ex-dividend today include: Telstra (ASX:TLS), SG Fleet Group (ASX:SGF) and Pact Group (ASX:PGH).
  • A new company debuting on the ASX today is Heavy Rare Earths, an Australian mineral exploration company. It will be trading under the ticker code HRE.
  • If you hold Janus Henderson Group (ASX:JHG) you will receive your dividend payment today.
  • Fisher & Paykel Healthcare (ASX:FPH) and Straker Translations (ASX:STG) will be holding their AGMs today.

Trading Ideas:

  • Bell Potter have downgraded its rating on Nanosonics, from a Hold to a Sell with a price target of $4.05. Nanosonics has rallied hard off its lows from earlier this year, however, investment arithmetic is stretched. In Bell Potter’s view a material portion of the valuation is attached to prospective revenues from products yet to obtain regulatory approval let alone commercial validation. At its current share price of $4.68, this implies about -14% share price growth in a year.
  • Trading Central has a bullish signal on foreign exchange company OFX Group (ASX:OFX) indicating that the stock price may rise from its close of $2.66 to the range of $3.45 – $3.60. That’s a rise of around 30-35% and it’s forecasted to occur in the next 33 days according to standard principals of technical analysis.

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