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Morning Bell 24 October

Grady Wulff
October 24, 2022

The local market ended Friday’s session 0.8% lower with every sector aside from energy stocks closing in negative territory. On Friday, investor sentiment was dampened by fears of a global recession but the energy sector offset sharp some of the losses, buoyed by strong gains for coal miners.

Telix Pharmaceuticals (ASX:TLX) led the ASX200 winners on Friday after ending the session up 12.67%, New Hope Corporation (ASX;NHC) rallied 7.7% to end the week, and Perseus Mining (ASX:PRU) lifted 5.85% on Friday. On the other end of the market, Home Consortium (ASX:HMC) fell 5.45% on Friday, Origin Energy (ASX:ORG) dropped 4.35% and Kelsian Group (ASX:KLS) fell 4.18%.

The most traded stocks by Bell Direct clients on Friday were Woodside Energy (ASX:WDS), Grange Resources (ASX:GRR) and Northern Star Resources (ASX:NST).

Over in the US, the ongoing swings between positive and negative investor sentiment shifted positive again on Friday after San Francisco Fed leader Mary Daly said at some point rate rises would moderate though it’s not yet time to ‘step down’ from large hikes, which fuelled a rally on Wall St. The Dow Jones Industrials index added 2%, the S&P500 also jumped 2% and the tech-heavy Nasdaq rose 1.7%. Earnings reports continue being released in the US with Exxon Mobil shares hitting an intra-day record high on Friday ahead of the company’s earnings report out this week, with some market analysts deeming the outlook for the company as attractive, ‘particularly for generalists needing energy exposure’.

In Europe on Friday, the STOXX600 fell amid rising concerns that major central banks around the world would retain their aggressive stance on inflation with dismal earnings updates from a number of companies. European markets were also impacted by turbulence on the UK’s political front in addition to European leaders continuing a debate on how to tackle the bloc’s energy crisis after Germany gave the green light for discussions around a price cap. Germany’s DAX closed Friday’s session 0.3% lower, the French CAC lost 0.85% and in the UK the FTSE100 rose 0.37% extending the rally from Thursday on news of the resignation of new British PM Liz Truss.

What to watch today:

  • The SPI futures are anticipating the ASX to open 1.42% higher on the back of the US rally that ended last week higher.
  • On the economic data front today, investors will be awaiting the release of China’s Q3 GDP growth rate data out today with the market expecting an increase to 3.4% in Q3 from a rise of 0.4% in Q2.
  • In commodities, brent crude oil is trading 1.22% higher at US$93.5 per barrel, gold is trading 1.81% higher at US$1657 per ounce, and iron ore is up 0.53% at US$94.50 per tonne.
  • The Aussie dollar is trading slightly stronger this morning with 1 Aussie dollar buying 64 US cents, 56.41 British Pence, 94.17 Japanese Yen and 1 New Zealand dollar and 11 cents.

Trading Ideas:

  • Trading Central has identified a bullish signal on Aeris Resources (ASX:AIS) following the formation of a pattern over a period of 29 days, which is roughly the same amount of time the share price may rise from the close of $0.42 to the range of $0.52 – $0.54 according to standard principles of technical analysis.
  • Trading Central has also identified a bearish signal on Healius (ASX:HLS) following the formation of a pattern over a period of 17 days which is roughly the same amount of time the share price may fall from the close of $3.19 to the range of $2.98 – $$3.02 according to standard principles of technical analysis.

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