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Morning Bell 31 October

Sam Kanaan
October 31, 2023

Wall St rallied on Monday prior to a big week ahead with the Federal Reserve’s rate decision, jobs reports and Apples’ earning set to be released. The Dow Jones had its best day since June, ending the session up 1.58% while the S&P 500 and the tech-heavy Nasdaq followed suit, rising 1.20% and 1.16% respectively.

The communications services sector was the leader on Monday, while tech giants Amazon and Meta led the tech sector, gaining 3.9% and 2% respectively.

The US Federal Reserve interest rate decision is set to be announced on Wednesday with the market expecting the central bank to hold its benchmark interest rate steady at 5.25%-5.5% for the next term.

Over in Europe, markets closed higher despite the continued rising geopolitical tensions in the Middle East. The STOXX600 closed the day 0.4% higher with most sectors ending the trading day in the green. Germany’s DAX closed out Monday’s session 0.20% higher, the French CAC ended the day 0.44% in the green and over in the UK, the FTSE100 gained 0.5%.

Locally yesterday, the ASX200 fell 0.79% with the energy and consumer staples sectors leading the losses by 2.59% and 1.27% respectively. This was slightly offset by the information technology sector which rose 0.43% yesterday.

What to watch today:

  • The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.43% at the open this morning following the global rally overnight.
  • In terms of economic data,
    • Australia’s all-important retail sales data came out yesterday, which saw a 0.9% rise for the month of September, which well-exceeded economists’ expectations of a 0.3% rise. This provides further support for the RBA to raise interest rates again on Melbourne Cup Day as consumer spend remains resilient in the high inflationary environment.
  • On the commodities front this morning,
    • Oil is down 3.78% to 82 US dollars and 31 cents a barrel as investors await economic monetary policy outlook and continued fears over the war in the Middle East.
    • Gold is down 0.48% to 1996 US dollars an ounce, as investors await the Fed’s decision on interest rates on Wednesday.
    • And iron ore is up 1.66% to 122 US dollars and 50 cents a tonne as renewed stimulus measures in China prompted an improved outlook for commodity demand.

Trading Ideas:

  • Bell Potter maintains a buy rating on Seven Group Holdings (ASX:SVW) and holds its price target steady at $33. The buy rating is maintained as Seven Group Holdings are market leaders in the industries it operates within, with scale, brand and industry expertise underpinning commercial advantages that are hard to replicate by competitors.
  • And Trading Central has identified a bullish signal on Beacon Lighting Group (ASX:BLX), indicating that the stock price may rise from the close of $1.83 to the range of $2.03-$2.07, on a pattern formed over 33 days, according to the standard principles of technical analysis.

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