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Morning Bell 30 May

Sophia Mavridis
May 30, 2022

Week-to-date the ASX200 has advanced 0.52%, boosted by the rebound in Friday’s session, when the market closed just over 1% higher, lifting the ASX200 index to its second consecutive weekly advance. 10 of the 11 industry sectors posted gains. The best performing sectors were energy, which lifted as oil prices neared two-month highs, and the consumer discretionary sector, which followed optimistic forecasts from retailers in the New York. The major banks also all advanced, supporting the broader market.

The best performing stocks were Pointsbet Holdings (ASX:PBH), City Chic Collective (ASX:CCX) and Block (ASX:SQ2). The worst performer on Friday was Appen (ASX:APX), after it was the best performer Monday-Thursday. Appen is an artificial intelligence services provider, which was approached by Canadian tech company Telus for a $1.2 billion takeover offer, offering $9.50 per share. However, Telus then withdrew their offer and Appen’s share price dropped 21% in Friday’s session. And Appen has received a lot of investor criticism, following the news.

The most traded stock by Bell Direct clients on Friday were Galileo Mining (ASX:GAL). Investors took their profits after the company’s share price jumped 20.6% on Friday, following news that the miner has discovered rhodium mineralisation at its Norseman project in Western Australia.

It was a strong session on Wall Street, with the Dow Jones and the S&P500 closing their best weeks since November 2020. The Dow gained 575 points, up nearly 1.8%. The S&P500 rallied 2.5% higher. And the tech-heavy Nasdaq outperformed, ending the day 3.3% higher, boosted by strong earnings from software companies, as well as a fall in the 10-year Treasury yield.

What to watch today:

  • The ASX200 is set to open higher. The SPI futures are suggesting a strong lift of 1.15% at the open this morning.
  • In commodities, oil is trading around US$115 per barrel, amid persistent concerns of tighter global supplies and increasing demand. So watch producers such as Santos (ASX:STO) and Woodside, which recently changed its ticker code to (ASX:WDS). Gold is also trading higher, benefiting from recent weakness in the US dollar. And iron ore has also rallied to an almost three-week peak.
  • Watch AGL Energy (ASX:AGL)’s share price movements, as there has been some speculation that the company has dropped its demerger plans. We’re expecting an announcement from AGL’s CEO sometime today.
  • Companies that are set to go ex-dividend today are Coronado Global Resources (ASX:CRN) and Elders (ASX:ELD). So, this often sees shares fall, as investors take their profits.
  • Link Administration (ASX:LNK) will hold its AGM today.

Trading Ideas:

  • Bell Potter maintain their Buy rating on EROAD (ASX:ERD) and have lowered their price target from $5 to $3.40, as well as reduced their underlying EPS estimates, accounting the higher corporate costs and lower FY23 estimated EBIT guidance. ERD last closed at $2.40, implying 41.7% share price growth in a year.
  • Trading Central have identified a bullish signal in Qantas (ASX:QAN), indicating that the stock price may rise from the close of $5.46, to the range of $6.10 to $6.30 over 17 days, according to the standard principles of technical analysis.

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