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Morning Bell 6 February

Grady Wulff
February 6, 2023

The local market ended the week 0.86% higher following a 0.62% rally on Friday led by a surge in healthcare and real estate stocks, while investors sold out of utilities and materials stocks on Friday.

The winning stocks from Friday’s session were Pinnacle Investment Management (ASX:PNI) adding 9.58%, BrainChip Holdings (ASX:BRN) rallying 5.56%, and HMC Capital (ASX:HMC) adding almost 5%. On the losing end of the market on Friday, investors sold out of Ramelius Resources (ASX:RMS), Paladin Energy (ASX:PDN) and Regis Resources (ASX:RRL), with each losing over 6.5%.

The most traded stocks by Bell Direct clients on Friday were CSL Limited (ASX:CSL), Whitehaven Coal (ASX:WHC) and Pilbara Minerals (ASX:PLS).

Over in the US on Friday, markets turned lower after surprisingly strong jobs data sparked concerns over the Fed’s aggressive interest rate stance moving forward, and investors digested a mixed bag of earnings reports. US jobs growth accelerated sharply in January with nonfarm payrolls surging to 517,000 jobs for the month, well above the expectation of 185,000 jobs added in the month. The US unemployment rate hit a more than 53 year low of 3.4% in another sign the US labour market remains tight despite the Fed’s best efforts to cool inflation and ease the tight labour conditions. Apple shares rose 2.4% on Friday after the tech giant forecast that revenue would fall for a second straight quarter but that iPhone sales would likely improve as production in China returns to normal. The Dow Jones closed Friday’s session 0.38% lower, the S&P500 lost 1.04% and the Nasdaq fell 1.59%.

Over in Europe, markets closed mostly higher on Friday as investors digested key central bank interest rate decisions, economic data and corporate earnings reports. The UK’s FTSE100 hit a record high on Friday partly driven by the pound dropping against the USD. The markets also rallied despite the Bank of England raising interest rates to their highest level since 2008 on Thursday.

Germany’s DAX fell 0.21% on Friday, while the French CAC rallied almost 1% and, in the UK, the FTSE100 rose 1.04%.

What to watch today:

  • Ahead of the local trading session the SPI futures are anticipating the ASX to open Monday’s session 0.16% higher.
  • On the commodities front oil is trading sharply lower, down 3.28% at US$73.39/barrel, iron ore is up 0.8% at US$126.50/tonne and gold is down 2.48% at US$1864.91/ounce.
  • The Aussie dollar is buying US$0.69, 91.37 Japanese Yen, 57.43 British Pence, and NZ$1.09.
  • On the economic data front investors will be awaiting the RBA’s latest interest rate decision out tomorrow alongside Australia’s trade balance data for December also out tomorrow.

Trading Ideas:

  • Trading Central has identified a bullish signal on Lendlease Group (ASX:LLC) following the formation of a pattern over a period of 81-days which is roughly the same amount of time the share price may rise from the close of $8.97 to the range of $10.60-$10.90 according to standard principles of technical analysis.
  • Trading Central has identified a bullish signal on Chorus (ASX:CNU) following the formation of a pattern over a period of 34-days which is roughly the same amount of time the share price may rise from the close of $7.89 to the range of $8.31-$8.41 according to standard principles of technical analysis.

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