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Morning Bell 7 February

Sophia Mavridis
February 7, 2022

On Friday, the local market ended a three-week losing streak, with 10 of the 11 industry sectors rising higher. The ASX200 gained 0.6% on Friday, as reporting season kicked off.

Liontown Resources (ASX:LTR) gained over 6%. After the market close on Thursday, the company announced the completion of its share purchase plan (SPP). News Corp (ASX:NWS) reporting its highest earnings since its separation from 21st Century Fox in 2013. NWS gained 5.7%. Meanwhile, Seek (ASX:SEK) declined the most, after Goldman Sachs reiterated its SELL rating and decreased its price target by 15% to $27.30.  

The most traded stock by Bell Direct clients was Seven West Media (ASX:SWM). On Friday, UBS reiterated its BUY rating on SWM, with a $0.95 price target. Other highly traded stocks included a few ETFs, such as HLTH, VAS and VETH. While clients also traded CSL (ASX:CSL), BHP Group (ASX:BHP), Australia and New Zealand Banking Group (ASX:ANZ), BrainChip (ASX:BRN), Westpac (ASX:WBC) and Adelaide Brighton Cement (ASX:ABC).

In the US, we saw Facebook suffer the largest share market hit, by value and points, in market history. Facebook’s parent company Meta’s stock price fell by 27% in one day, equivalent to over US$230 billion in lost value. In the following session on Friday, the tech sector recovered the losses led by Facebook, by a 13.5% surged in Amazon. Amazon reported strong quarterly earnings, which also saw the company largest one-day gain since 2015. The S&P500 and the Nasdaq ended their best week of the year, while the Dow Jones closed slightly in the red.

The SPI futures are suggesting the ASX200 will fall 0.58% at the open.

What to watch today:

  • The oil price has surged higher, trading at US$91.93. US crude prices hit their highest price since September 2014, at US$93 per barrel, following a large storm that swept across the US and disrupted some oil production in the Permian Basin region. Additionally, OPEC stuck to its plan to gradually release more barrels into a strengthening market.
  • The price of gold is trading higher at US$1,807 an ounce.
  • While the seaborne ire ore price is lower at US$145 a tonne.
  • Australia and New Zealand Banking Group (ASX:ANZ) and James Hardie (ASX:JHX) will report their quarterly results, and Argo (ASX:ARG) and Imdex (ASX:IMD) will report their half year results.
  • Iron ore miner Champion Iron (ASX:CIA) is set to go ex-dividend today.

Trading Ideas:

  • Bell Potter have upgraded Pro Medicus (ASX:PME), a leading heath imaging IT provider, from a HOLD to a BUY, and have amended their price target to $55 from $62. The broker expects PME to deliver strong earnings growth at the upcoming reporting. PME last closed at $45.58, implying 20.7% share price growth in a year.
  • Trading Central have identified a bullish signal in Australian Clinical Labs (ASX:ACL), indicating that the stock price may rise from the close of $5.08 to the range of $6.00 to $6.20, within 17 days, according to the standard principles of technical analysis.

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