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Morning Bell 9 May

Sophia Mavridis
May 9, 2022

Last week concerns around aggressive monetary tightening by central banks saw markets sharply decline. Week-to-date the Australian market closed just over 3% lower, with all sectors lower.

On Friday the market closed 2.2% lower, its worst trading session since February. Again, a broad based sell off ended with all sectors in the red. Tech and property shares declined the most.

Paladin Energy (ASX:PDN), Life360 (ASX:360) and Xero (ASX:XRO) were the worst performers. Stocks that managed to make slight gains included ResMed (ASX:RMD), Wesfarmers (ASX:WES), Mineral Resources (ASX:MIN), Costa Group (ASX:CGC), Cromwell Property Group (ASX:CMW), Amcor (ASX:AMC) and Medibank (ASX:MPL). PolyNovo (ASX:PNV) managed to gain 4%, following news that its chairman and non-executive director bought 500,000 and 100,000 shares in the company respectively.

The most traded stocks by Bell Direct clients on Friday were Macquarie Group (ASX:MQG), Lake Resources (ASX:LKE), the Vanguard Australian Shares ETF (ASX:VAS), BHP Group (ASX:BHP) and CSL (ASX:CSL).

In New York, stocks further declined, extending the week’s losses. The Dow Jones closed 0.3% lower, the S&P500 down 0.6%, while the Nasdaq closed 1.4% lower.

What to watch today:

  • The SPI futures are suggesting the Australian share market will fall 0.7% at the open this morning.
  • In commodities, the price of oil is trading higher, amid concerns of tight global supply, ahead of the EU’s impending embargo on Russian oil. The gold price is higher, after coming under pressure last week. And iron ore has dropped, with seaborne iron ore trading 5% lower. So, watch iron ore stocks today such as Rio Tinto (ASX:RIO), Fortescue Metals (ASX:FMG), Champion Iron (ASX:CIA) and Mineral Resources (ASX:MIN).
  • Watch Westpac (ASX:WBC)’s share price movements today. This morning Westpac released its half year earnings, reporting first half of 2022 statutory net profit, up 63% compared to the second half of 2021 and down 5% compared to the first half of 2021. And a fully franked interim dividend of 61 cents per share.
  • If you hold Metrics Income Opportunities Trust (ASX:MOT) you can expect to receive your dividend payment today.

Trading Ideas:

  • Bell Potter maintain their BUY rating on Life360 (ASX:360), with a 9% decrease to their price target to $7.50, which is still over 100% premium to the share price.
  • Trading Central have identified a bearish signal in Bravura Solutions (ASX:BVS), indicating that the stock price may fall from the close of $1.66 to the range of $1.40 to $1.44, over 17 days, according to the standard principles of technical analysis.

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