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Morning Bell 9 March

Grady Wulff
March 9, 2023

The local market closed in the red yesterday, making the RBA-rate announcement rally very short lived as investor sentiment was dampened by Fed Chair Jerome Powell saying interest rates need to go higher for longer in order to tackle the stubbornly high inflation in the US. Energy stocks were the worst performers yesterday amid a dive in commodity prices. Nanosonics (ASX:NAN) outperformed the market yesterday, rising over 7.5% despite no price sensitive news out of the company yesterday, while Ramelius Resources (ASX:RMS) weighed on the market, tumbling almost 11% amid the declining price of gold yesterday.

In Europe markets closed mixed as investors continued digesting the remarks made by fed chair Jerome Powell. The STOXX600 closed 0.12% higher, Germany’s DAX added almost half a percent, the French CAC lost 0.2% and, in the UK, the FTSE100 rose 0.13%.

Wall Street has just closed, and it was a turbulent session in the US overnight following the release of stronger-than-expected JOLTs and ADP jobs data, in a sign the labour market remains tight in the US, adding yet another reason for the Fed to continue its monetary tightening policy for longer. The number of job openings in the US fell by 410,000 to 10.824 million in January, above market expectations of a decline to 10.5 million. The Dow Jones fell 0.18%, the S&P500 lost 0.14% but the Nasdaq rose 0.4%.

What to watch today:

  • Ahead of the local session the SPI futures are anticipating the ASX to open 0.45% higher despite the turbulent session on Wall St overnight.
  • Commodities have been a driver of materials stocks being sold off locally this week, but today we’ve seen a slight rebound in some key commodities. This morning, oil is still trading lower by around 1.6% at US$76.34/barrel, gold is up 0.1% at US$1815/ounce and iron ore is up almost 2% at US$129/tonne.
  • The Aussie dollar is buying US$0.66, 90.50 Japanese Yen, 55.55 British Pence and NZ$1.08.
  • Stocks going ex-dividend today include Mineral Resources (ASX:MIN), Monadelphous Group (ASX;MND), IDP Education (ASX:IEL), Perpetual (ASX:PPT), BHP Group (ASX:BHP), Rio Tinto (ASX:RIO) and CSL Limited (ASX:CSL). If you’ve been thinking about these stocks it might be worth considering buying in today as stocks going ex-dividend generally trade lower on the ex-dividend date.

Trading Ideas:

  • Bell Potter has upgraded the price target on Avita Medical (ASX:AVH) from $4.20 to $5.60 and maintain a buy rating on the company following the company announcing a major upscaling of its US sales force and ahead of FDA label expansion approval due in June for trauma and vitiligo. Bell Potter sees the company has a strong balance sheet and a solid revenue base in the existing burns business, to fund expansion and upscaling in the US.
  • Trading Central has identified a bullish signal on Nanosonics (ASX:NAN) following the formation of a pattern over a period of 34-days which is roughly the same amount of time the share price may rise from the close of $4.87 to the range of $5.70 to $5.90 according to standard principles of technical analysis.

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