Morning Bell 5 October

Jessica Amir
October 5, 2020

The futures are suggesting a lift of 1.2% or 67 points, but trading is expected to be thin given it’s a public holiday in NSW, SA, ACT, QLD – so expect industrials and economic recovery stocks to be stronger, and tech stocks to follow Wall Street lower.

It’s also going to be one of the busiest weeks economically since the pandemic – with the Australian Federal Budget being handed down tomorrow night and the RBA meeting with rates expect to remain on hold, while Westpac has gone out in a limb expecting a cut of 0.1%.

What to watch today?

  • Oil tracks steady, US$37, Gold holds at US$1,908.
  • On the economic side: NAB confidence numbers are out along with services sector data.

Trading ideas:

  • Integrated Research (ASX:IRI) was upgraded as a Buy by Bell Potter, with a new $4.25 target, on the back of the company releasing new products and renewing licences. Bell Potter is forecasting EPS growth of 10%, 11% and 15%, over the next three years.
  • AFT Pharma (ASX:AFP) was rated a Hold by Bell Potter, with an increased $5.11 target after seeing a strong rise in sales in over-the-counter medicines associated with the protection of COVID-19 infections.
  • Keep an eye on Black Cat Syndicate (ASX:BC8) and Amaysim (ASX:AYS) – both showing bullish charting signals – according to Trading Central.

 

Read Transcript

Good morning, thanks to your company this Monday the 5th of October, I’m Jessica Amir, market analyst with Bell Direct.

Well, it’s going to be one of the busiest weeks economically since the pandemic with the Australian Federal Budget being handed down tomorrow night and the RBA meeting tomorrow with rates expected to remain on hold while Westpac has gone out on a limb expecting rates to be cut by 0.1%.

On Friday we saw the local Aussie share market fall 1.4% losing 1% of that after U.S. President Donald Trump was diagnosed with COVID-19.

In terms of how U.S. stocks ended Friday as well investors continued to sell out of tech stocks and instead rotate into economic recovery stocks buying into industrial chemical and oil and gas companies like United Rentals, Devon Energy and Apache.

Now this is something that fund managers have said that they’re doing not just in the U.S. but globally.

As well as how the U.S. major indices ended the tech heavy Nasdaq down the most 2.2%, the broader S&P500 losing about 1% while the U.S. blue chip index the Dow jones fell 0.5%.

Now what to watch today well the futures are suggesting a rebound from Friday’s fall, a lift of 1.2% or 67 points but trading is expected to be quite light given it’s a public holiday in New South Wales, South Australia, the ACT and Queensland and you could expect industrials and economic recovery stocks to be stronger and tech stocks to follow Wall Street down.

As for the commodities a bit of a steady ho-hum evening on Friday the oil price is tracking steady at US$37 and the gold price is also holding steady at US$1,908 dollars an ounce.

On the economic side of things today two economic readings are out locally, NAB consumer confidence numbers as well as services sector data out later today they’ll be closely watched.

As for trading ideas it could be worth a look software insights business called Integrated Research (ASX:IRI) was upgraded as a buy by Bell Potter with the new $4.25 target on the back of the company releasing new products and renewing licenses.

Now Bell Potter is forecasting earnings per share growth of 10%, 11% and 15% over the next three respective financial years being driven by double digit revenue growth and also margin or profit improvement so that’s IRI a Bell Potter buy.

And the drug developer and licensor called **AFT  Pharma**, **AFP** is their ticker code was rated a **Hold** by Bell Potter, with a new $5.11 target after seeing a strong sales lift in over-the-counter medicines associated with the protection of COVID-19 infections.

Now AFT Pharmer or AFT is awaiting the potential for approval for Maxigesic tablets in the U.S.

Now this is a $2.7 billion U.S. market and approval is set to be released if it does go ahead early November so keep an eye on that.

That’s AFT Pharmer AFT is the ticker, a Bell Potter buy.

And lastly keep an eye on two stocks, Black Cat Syndicate (ASX:BC8) and Amaysim (ASX:AYS)  both showing strong bullish charting signals trends according to Trading Central.

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

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