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Morning Bell 4 July

Sophia Mavridis
July 4, 2022

Week-to-date the ASX200 is down 0.6% with real estate taking the biggest hit, while utilities remain strong. However, on Friday real estate was the best performing sector, rising 1.5%, while materials and energy suffered from a downturn in commodity prices.

BNPL company Zip (ASX:ZIP) had good start to the new financial year, rebounding 9%, after the company was the worst performing stock in June, dropping 50% of its value during the month. Meanwhile the decline in commodities saw the major mining stocks and energy producers drop in price. Liontown Resources (ASX:LTR) was down the most, and Woodside Energy (ASX:WDS) and Mineral Resources (ASX:MIN) followed. Fortescue Metals (ASX:FMG), Newcrest Mining (ASX:NCM) and BHP Group (ASX:BHP) also dropped about 3%, while the other miners saw heavier losses.

The most traded stocks by Bell Direct clients on Friday were Sims (ASX:SGM), Beach Energy (ASX:BPT) and Wesfarmers (ASX:WES).

US equities rallied, the Dow Jones gained more than 300 points or 1%, the S&P500 also gained 1% and the tech-heavy Nasdaq closed 0.9% higher.

What to watch today:

  • The SPI futures are suggesting our local market will jump 1.5% at the open this morning.
  • The RBA is widely expected to raise rates by 0.5% tomorrow, so investors may be cautious while awaiting tomorrow’s announcement.
  • In commodities, oil and gold are both trading flat, while iron ore has dropped 4%. So watch BHP and FMG today after the pullback in the iron ore price.
  • Watch payment company Block (ASX:SQ2). The New York listed Block share price rebounded from recent selling, so its ASX-listed shares are expected to follow. And the positive trading session for the Nasdaq may see a positive day for the ASX tech sector as well.
  • In economic data, ANZ’s data on job advertisements for June will be released, and home loan data for May will be released, both at 11:30am AEST.

Trading Ideas:

  • Bell Potter have upgraded their rating on Capricorn Metals (ASX:CMM) from a Hold to a Buy and have lowered their price target from $3.90 to $3.70. Bell Potter nominate it as the preferred gold exposure in an environment of rising costs and a rangebound gold price.
  • Trading Central have identified a bullish signal in Qube Holdings (ASX:QUB), indicating that the stock price may rise from the close of $2.83 to the range of $3.10 to $3.16 over 17 days, according to the standard principles of technical analysis.