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Morning Bell 8 May

Jessica Amir
May 8, 2020

The Australian share market is tipped to nudge 0.1% higher at the open going by the futures. From Monday to Thursday the ASX200 gained 2.3%, so if the market holds these levels, the ASX200 will have made its best weekly gain in 5 weeks.

A trading idea for today, IPH (ASX:IPH) was reiterated as a Buy by Bell Potter, expecting share price growth of 17% to $8.50 in a year.

Investors will be watching APA (ASX:APA), News Corp (ASX:NWS) and Macquarie (ASX:MQG). The RBA will also be releasing its statement on monetary policy at 11.30am.

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Good morning, well the Aussie share market is eyeing a positive day of trade if the futures are something to go by, also a given that we had great leads from overseas markets, while all eyes today will be on the RBA’s a statement out later today.

From Monday to Thursday this week, the ASX200 charged up 2.3% and if we can hold on to these levels the Aussie share market will have made its best weekly gain in five weeks.

Today it’s important to note that we do have solid leads to follow, global equities were high overnight, Tech stocks up the most and the oil price held its ground at around $23.74.

Gold lost a bit of touch getting as low as $1,725 an ounce as money was put back on the equity table.

Now in the U.S, the S&P500 ended 1.2% higher, the Nasdaq up the most 1.4% and the Nasdaq is also in positive territory for the year, now this is the first time we have seen a major US index turn positive since COVID-19.

As for Australia, we’re a little behind that, we need to rise 20% to be in positive territory for 2020.

Now what to watch today, well several key things, first up energy business APA Group (ASX:APA), they hold their investor day today, they reiterated earnings are on track to grow between 3.8 – 5.2% this year and it’ll also pay a $0.50 per share dividend now that’s over at 6% higher than last year.

Their slide deck today also alluded to a broader energy transformation that’s taking place in Australia, but ongoing investment of about $122 billion is required for Australia to switch from coal to renewables to also to rooftop solar and electric vehicles.

Now, News Corp (ASX:NWS) just announced group earnings fell 16% in their nine months right through to the end of March with subscriptions to video services are falling the most 26%.

However in the quarter alone it declared a net loss of $1 billion and that compares to the $23 million profit that it made last year.

Now News Corp advised it’s got $63 million in free cash flows, however its Executive Chairman Rupert Murdoch says he’ll give up his entire cash bonus for the year, the CEO not as willing as that only giving up 75% of his cash bonus.

News Corp, they last trade at $15.54, Morningstar reckons fair value is $22.

Now, Macquarie (ASX:MQG) just announced full-year results profit coming in at $2.7 billion for the full year ending March, now that’s 8% less than last year and if you just compared that drop to the major banks you’d see that Macquarie is somewhat on a pedestal.

Now for a trading idea, intellectual property firm IPH (ASX:IPH) was reiterated as a Bell Potter Buy with the broker expecting share price growth of 17%.

The reason behind that is IPH’s full workforce has remained robust and they’ve got a significant schedule of work and their long-term growth prospects remain intact.

Now what else to watch, well the RBA will release their statement of monetary policy at 11:30am today, all eyes will be on how much they’re going to continue to buy bonds and any mentions of further support.

We know bond purchases so far have totaled $50 billion with that new money flowing into the economy, but the RBA mentioned earlier this week they want full employment we know unemployment numbers are out next week and expected to be very bleak, so you’d expect the RBA to make further support.

I’m Jessica Amir with Bell Direct, happy trading and stay safe.

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