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Morning Bell 7 September

Jessica Amir
September 7, 2021

It was a silent night for markets, as Wall Street was closed for the Labor Day public holiday.

European equities are approaching record levels. Tech stocks in Europe increased 1.6%, leading the major European indices higher, after the US jobs report revealed US jobs are growing at their slowest pace in 7 months. The US Central Bank may need to keep monetary policy as is, and not scale back on bond buying. This will keep bond yields and interest rates lower for longer.

The Aussie share market is set to open higher, with the futures suggesting a lift of 0.2%.

What to watch today:

  • All eyes will be on tech stocks today. Tech stocks rose 1.2% on the ASX yesterday. Appen (ASX:APX) rose 4.6%, Redbubble (ASX:RBL) rose 3.5% and Technology One (ASX:TNE) rose 2.2%.
  • The aluminium price hit a decade high overnight, amid political unrest in Guinea. Global stimulus and the push for climate change investment and tighter supply, has pushed aluminium up 40% this year. This is supporting stocks such as Alumina (ASX:AWC), which rose 3% yesterday and 19% last week. The 15 and 30 day moving averages and the MACD technical indicators, are both suggesting AWC could continue to rally. Also watch other aluminium stocks such as South32 (ASX:S32).
  • The iron ore price last traded 3% higher at US$144.83, while the copper price is steady. And the oil price fell below US$69, as it continues to lose momentum after the weaker than expected US jobs report.
  • Companies going ex-dividend today include Amcor (ASX:AMC), BlueScope (ASX:BSL), IOOF (ASX:IFL), IGO (ASX:IGO) and Origin Energy (ASX:ORG).
  • One of the most traded stocks by Bell Direct clients yesterday was Fortescue Metals (ASX:FMG), which fell 11% after it went ex-dividend. FMG shares are now 30% cheaper than they were in July this year. The technical indicators suggest FMG shares could continue to fall, while the MACD flagged a bullish signal, suggesting this could be the end of FMG’s downtrend.
  • In economic news, the RBA meets for the first time this month today at 2:30pm AEST. Rates are tipped to remain on hold at 0.1%. However, all eyes are on the Central Bank’s decision to change its timetable for buying government bonds, with $4 billion of bonds being bought by the RBA until at least the 11th November 2021.

Trading Ideas:

  • Cobram Estate Olives (ASX:CBO) was rated for the first time by Bell Potter as a new BUY stock, with a price target of $2.30, implying 14% share price growth in a year.
  • Bullish charting signals have been identified in IOUPay (ASX:IOU), Polynovo (ASX:PNV) and Firefinch (ASX:FFX), according to Trading Central.

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