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Morning Bell 8 September

Jessica Amir
September 8, 2021

Wall Street returned from its public holiday long weekend, with US stocks beginning the week mostly in the red.

The Aussie share market is set to open lower, with the futures suggesting a fall of 0.4%.

What to watch today:

  • Australia’s vaccine passports will rollout from next month, as proof of vaccination status overseas. Upon return from travel, Australians will be allowed to home quarantine. Keep an eye on travel and tourism stocks such as Qantas (ASX:QAN), Flight Centre (ASX:FLT) and Webjet (ASX:WEB).
  • The aluminium price eased from its decade high, falling 0.2%. Watch Alumina (ASX:AWC), South32 (ASX:S32) and Rio Tinto (ASX:RIO).
  • The iron ore price fell 4% to US$138.83. However, the technical indicators are suggesting that iron ore has been oversold. Although further selling pressure is expected in the short term, the technical indicators and the long term fundamentals, suggest iron ore could hit the bottom soon.
  • The copper price fell 1.3%, while the oil price fell to a two week low at US$68.40, as Saudi Aramco cut its selling price by $1, on the back of new lockdowns across Asia.
  • Companies going ex-dividend today include Adairs (ASX:ADH), Medibank (ASX:MPL) and Seek (ASX:SEK).
  • One of the most traded stocks by Bell Direct clients yesterday was Mineral Resources (ASX:MIN), which fell approximately 4%. Yesterday MIN announced it sold all its major holdings in lithium stock Pilbara Minerals (ASX:PLS). MIN also has several Western Australia mining operations in iron ore and lithium. Bell Potter recommends MIN as a BUY with a price target of $54.70.
  • In economic news, yesterday the RBA kept interest rates at 0.1% and extended its bond buying program. The RBA is set to buy $4 billion of bonds in a program ending 11th November. This program has now been extended until mid-February 2022. This means tech stocks will be attractive. This quarter, tech stocks have increased almost 10%. In addition, the RBA believes the Australian economy will bounce back by the second half of 2022 and catch up most of the lockdown losses.

Trading Ideas:

  • TechnologyOne (ASX:TNE) was upgraded as a BUY stock by Bell Potter, increasing its price target by 28% to $12.50, implying 17% share price growth in a year.
  • Bullish charting signals have been identified in Challice Mining (ASX:CHN), Jervois Global (ASX:JRV) and Elixir Energy (ASX:EXR), according to Trading Central.

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