Morning Bell 10 November

Jessica Amir
November 10, 2020

The local futures are suggesting the Aussie share market will lift 2.7% at the open.

Overnight, a vaccine developed by Pfizer and BioNTech is 90% effective in treating COVID-19. As a result, cyclical stocks saw huge gains, on hopes that a V-shape recovery may be on track. Airlines and banks soared, while stay at home stocks lagged.

Elsewhere, Oil soared 8.5% to US$40.40, while the safe-haven Gold lost a fair bit of investment, falling 4% to US$1,866.

What to watch today

  • Cyclicals like travel stocks Qantas (ASX:QAN), Corporate Travel Management (ASX:CTD) and Flight Centre (ASX:FLT) are likely to rally today. Along with banks like Macquarie (ASX:MQG), and the big four CBA, ANZ, WBC, NAB.
  • Companies that are in trial phase of a vaccine locally, particularly CSL (ASX:CSL) which has kicked off production of 30 million doses of a vaccine.
  • Mesoblast (ASX:MSB) might be worth a look as it’s in phase three trials for a COVID-19 vaccine and is working on treating a rare disease in children, graft versus host disease for bone marrow transplants.
  • Those that will likely lag today, including gold stocks and tech giants.
  • Companies reporting results: James Hardie (ASX:JHX) and Incitec Pivot (ASX:IPL).
  • AGMs: Domain (ASX:DHG) & Ingenia (ASX:INA).

Trading ideas:

  • Bell Potter increased Uniti Group (ASX:UWL) Buy rating and target to $1.80 (implying 30% upside) with the Telco set to buy smaller competitor Opticomm. UWL shares are up 19% in 7 days.
  • UBS reiterated Tabcorp (ASX:TAH) as a Buy with a $4.70 target. From a technical perspective – Tabcorp’s shares look like they could move higher, the 50-day moving average price crossed the 200 day.
  • Los Corros (ASX:LCL), Pointsbet Holdings (ASX:PBH) and Praemium (ASX:PPS) are all showing bullish charting signals according to Trading Central.
Read Transcript

Good morning thanks for your company this Tuesday the 10th of November, I’m Jessica Amir, market analyst with Bell Direct.

Well really exciting news overnight and it’s shaping up to be a cracking day for local investors, a vaccine developed by Pfizer and BioNtech is 90% effective in treating a COVID-19 vaccine and this seems like the most promising trial result that we’ve seen to date and given the White House Doctor Anthony Fauci previously hoped that a vaccine would just be 50% to 60% effective saying that would be acceptable.

Well today’s announcement is a pretty significant win as a result cyclical stocks saw the most gains overnight on hopes of a v-shaped recovery, airlines and banks soaring while stay at home stocks lagged Cruiser liner Carnival up 22%, Walt Disney up 13% on hopes that a vaccine could see its amusement parks open, bank stocks like Bank of America up 17% JP Morgan Chase up 15%, Visa up 10%.

On the other side of town most of the fanmag stocks like Facebook, Apple, Netflix and Google stocks fell into the red as investors again begin to rethink if these stocks are too overpriced given their record rally and high price to earning ratios.

Now Netflix shares feel about 8% earlier Facebook lost 5%. As for the major indices well records were smashed that is if you look at the blue chip index the Dow Jones it was up 4.1% earlier hitting a new all-time high, the S&P500 was up 2.3% the smaller cap index called the Russell 2000 that saw the most significant gain out of the indices up 5.5% while the Nasdaq went the other way.

European stocks also were higher as well the French market there was up the most 7.6%.

Elsewhere the oil price soared almost 9%, it’s now US$40.40 a barrel back above that key $40 mark, while the safe haven of gold lost a fair bit of investment with gold now tracking at US$1,866 an ounce after losing 4%.

As for the Aussie share market with the look the local futures part of me are suggesting a lift of almost 3% today so what would I be watching will I be expecting cyclical stocks like Qantas (ASX:WAN), Corporate Travel Management (ASX:CTD), Flight Center (ASX:FLT) to rally today along with banks like Macquarie (ASX:MQG) and the big 4 CBA (ASX:CBA), ANZ (ASX:ANZ), Westpac (ASX:WBC) and NAB (ASX:NAB).

An amusement park company Ardent Leisure (ASX:ALG).

Keep an eye on that one and also keep an eye on companies that are in trial phase for a vaccine locally particularly CSL (ASX:CSL) this week they kicked off production of 30 million doses of a COVID-19 vaccine.

Also keep an eye on Mesoblast (ASX:MSB) could be worth a look as it’s got a phase three trial for a COVID-19 vaccine and it’s also working on treating a rare children disease graft versus host disease in treating bone marrow transplants.

Those that will likely lag today were gold stocks and tech giants companies reporting results to keep an eye on James Hardie (ASX:JHX) and Incitec Pivot (ASX:IPL). AGM’s Domain (ASX:DHG) and Ingenia (ASX:INA) keep an eye on that.

As for economic news well not much significant news that is likely to move the needle following that significant announcement overnight but we are expecting a NAB business confidence survey to be released.

As for trading ideas that could be worth a look Bell Potter increased Uniti Groups (ASX:UWL) by rating and target to $1.80 that’s implying 30% upside with the Telco set to buy the smaller competitor called Opticomm.

Now UWL shares are up 19% in seven days so it could be worth a look.

Elsewhere UBS reiterated Tabcorp (ASX:TAH), as a buy, a $4.70 target from a technical perspective Tabcorp shares could be worth a look as well given that they in fact the 50-day moving average price crossed above the 200-day average, now this is quite significant as it implies that there could be further upside.

Lastly keep an eye on Los Corros (ASX:LCL), Pointsbet (ASX:PBH) and Praemium (ASX:PPS) all showing bullish charting signals and that’s according to Trading Central.

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

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