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Morning Bell 5 May

Paulina Peters
May 5, 2022

Yesterday, the Aussie share market declined 0.2%, which means the market is now tracking 1.8% lower this week.

Looking at the sector performances, the market was mixed. Notably, the real estate sector fell 1.5%, its lowest level in almost two months as investors began to factor in higher borrowing costs for property companies with interest rates rising.

The best performers included HUB24 (ASX:HUB), Orora (ASX:ORA) and Virgin Money UK (ASX:VUK), all closing over 3% higher. While on the flip side, AVZ Minerals (ASX:AVZ) fell 19% after news that the company threatened legal action against a transfer of shares in Dathcom (which is a company AVZ holds a large stake in). Also declining yesterday were tech shares like Zip (ASX:ZIP), NOVONIX (ASX:NVX) and Tyro Payments (ASX:TYR).

The most traded stocks by Bell Direct clients yesterday included Flight Centre (ASX:FLT), Commonwealth Bank (ASX:CBA) and Firefinch (ASX:FFX).

It was a big trading session over in the US. The Dow and S&P500 saw their biggest daily gains since 2020. The Dow rose more than 900 points, the S&P500 was up nearly 3% and the Nasdaq lifted an impressive 3.2%. As expected, the central bank announced a 50 basis point increase, or 0.5% increase in the benchmark interest rate, its biggest rate increase since 2000. And the Fed noted that it would also start reducing its balance sheet in June.

What to watch today:

  • The SPI futures are suggesting the market is set to open 0.43% higher.
  • Reporting wise, National Australia Bank (ASX:NAB) is one to watch today, as the banking giant has released its half-year results this morning.
  • Other companies releasing results today include Eclipx Group (ASX:ECX) and Virgin Money UK (ASX:VUK).
  • Economic news wise, Australia’s balance of trade for March will be released today. That’s the difference between what we export vs. what we import.
  • Moving to commodities, the oil price jumped 5% as the European Union spelled out plans to phase out imports of Russian oil.  The gold price rose as both the US dollar and US Treasury yields fell following the Federal Reserve chairman Jerome Powell’s comments that inflation was too high, making bullion more appealing.
  • If you’re a shareholder of Gold Road Resources (ASX:GOR) or Arena REIT (ASX:ARF) you can expect to receive your dividend payment today. And Vita Group (ASX:VTG) is set to go ex-dividend today.
  • Iress (ASX:IRE), Rio Tinto (ASX:RIO) and QBE Insurance Group (ASX:QBE) are holding their AGMs today.

Trading Ideas:

  • Citi have maintained its Buy rating on ARB Corp (ASX:ARB) however with a reduced price target, from $48.15 to $46.63. At its current share price $33.61, this implies about 39% share price growth in a year.
  • Trading Central has a bearish signal on Shaver Shop Group (ASX:SSG) indicating that the stock price may fall from the close of $1.11 to the range of $0.76 – $0.82 in the next 369 days according to standard principals of technical analysis.

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