Morning Bell 8 October

Paulina Peters
October 8, 2021

Yesterday, the ASX200 gained 0.7% following a better night of trade on Wall Street, with the big banks and Woolworths notching up gains of 1%. Nearly all sectors closed in the green, with tech shares rallying. The only sector to fall was the Energy sector, as the US said it was considering selling oil from its strategic reserves and Russia said it was ready to stabilise the natural gas market.

Looking to the US, lawmakers reached a deal on Thursday to increase the debt ceiling in the short-term. The compromise will avoid an unprecendented debt default for now. This helped equities rally, with the Dow rising 300 points, the S&P500 closing 0.8% higher, and the tech-heavy Nasdaq up 1.1%.

Following a positive session on Wall Street, the futures are suggesting the Aussie share market will open 0.46% higher this morning, with the market on track to finish higher for the first time in five weeks.

What to watch today:

  • Continue to keep watch of travel and tourism, as well as food and beverage stocks as from Monday the 11th of October, fully vaccinated adults in NSW will enjoy more freedoms as several restrictions are eased as part of the reopening roadmap.
  • In economic news, yesterday, the services sector reading for September edged up 0.1 points to 45.7 from 45.6 in August, which points to the second consecutive month of contraction in the services sector. Today, investors will digest the latest building permits data for August, and the RBA will release its semi-annual Financial Stability Review, with talks that lending and housing are likely to feature prominently.
  • Companies that are paying their latest dividends include Healius (ASX:HLS), Reliance Worldwide Corporation (ASX:RWC), WiseTech Global (ASX:WTC) and Woolworths (ASX:WOW).
  • The most traded stocks by Bell Direct clients yesterday included Whitehaven Coal (ASX:WTC), its shares fell 7% following the ongoing energy crisis that saw global coal futures tumble yesterday. Another most traded stock was Red 5 (ASX:RED). The gold stock charged about 18% yesterday as the business made further headway at is cornerstone King of the Hills (KOTH) project, where construction is underway on one of Australia‚Äôs most well-endowed gold assets.
  • The oil price resumed its rally, lifting 1.1% higher to US$78.84 a barrel, now trading back at 7-year high territory. This comes as the market deemed it unlikely that the US would release emergency crude reserves or ban exports to ease tight supplies.
  • The gold price fell following a drop in US weekly initial jobless claims, which boosted treasury yields. Meanwhile, the seaborne iron ore price traded slightly higher, at $118.

Trading ideas:

  • Bell Potter has reiterated its BUY recommendation on software company, Envirosuite (ASX:EVS) with an increased price target of $0.22 (previously $0.20). EVS closed higher yesterday, up about 16% to $0.18, which implies about 19% share price growth.
  • Bullish charting signals have been identified in Red 5 (ASX:RED), Lynas Rare Earths (ASX:LYC) and Piedmont Lithium (ASX:PLL) according to Trading Central.

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