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Morning Bell 6 December

Sam Kanaan
December 6, 2023

Wall St closed mixed overnight as favourable economic data coming out of the US, shows further signs of inflation cooling, with job openings data declining 6.6% in October, indicating that the US labour market is cooling. The Dow Jones and the S&P 500 both lost 0.2% and 0.06% respectively, meanwhile the tech-heavy Nasdaq gained 0.31% overnight.

In Europe overnight, markets were mixed in the region as investors digested some key economic data and took a breather to assess valuations given the recent stock market rallies both in the European region and on global markets. UK households appear to have delayed Christmas spending this year as retail sales data in the region showed very muted growth of 2.7% in November which is much lower than the 4.2% growth recorded in November 2022, in a sign higher cost of living pressures are beginning to bite in the UK. The STOXX600 rose 0.4% on Tuesday, Germany’s DAX rose 0.78%, the French CAC added 0.74% and, in the UK, the FTSE100 fell 0.31%.

Locally yesterday, the ASX200 closed 0.89% lower with the energy and material sectors losing 2.05% and 1.81% each respectively. This was slightly offset by the utilities sector which saw a rise of 0.55% by market close yesterday.

What to watch today:

  • The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.42% at market open this morning
  • In terms of economic data, yesterday the RBA announced the nations cash rate will be maintained at 4.35% in its last meeting for 2023.
  • On the commodities front this morning, oil is down just 0.07% at US$72.92/barrel, gold is down 0.57% at US$2018/ounce and iron ore is down 1.13% at US$131.50/tonne.

Trading Ideas:

  • Bell Potter maintains a buy rating on Cyclopharm (ASX:CYC) and has kept its 12-month price target steady at $4.25. The buy rating is maintained as Cyclopharm’s initial roll out of Technegas in the US is proceeding with Duke University signing a contract to use their product. Duke University is a tier 1 academic hospital, attached to the University’s medical school and further announcements regarding subsequent contract signings for the use of Technegas are expected in the short term.
  • And Trading Central has identified a bullish signal in Sonic Healthcare (ASX:SHL), indicating that the stock price may rise from the close of $29.37 to the range of $31.20-$31.70, over a period of 44 days, according to the standard principles of technical analysis.

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