Morning Bell 11 August

Jessica Amir
August 11, 2020

The Aussie share market put on a show yesterday rising 1.8% to a three-week high, and today the futures suggest the market will see a flat start, falling 0.05% at the open.

What to watch today:

  • The RBA minutes will be released, which should reveal the details of how much money the central bank injected into the financial system, when the RBA purchased the Australian Government Securities earlier in August. The RBA did that to provide the government with capital and to also drop the bond yield to its target of 0.25%.

Companies reporting today:

  • Challenger (ASX:CGF)
  • Coronado Global Resources (ASX:CRN)
  • James Hardie Industries (ASX:JHX)
  • Janison Education (ASX:JAN)
  • Shopping Centres Australasia Property Group (ASX:SCP)

Local trading ideas:

  • Footwear business Accent Group (ASX:AX1) is showing a bullish uptrend according to Trading Central’s charting. Their chart suggests the stock could rise from yesterday’s close of $1.35 to $1.68 – $1.76 over 31 days. It’s a Bell Potter buy with a $1.80 price target.
  • Bell Potter upgraded mining equipment business Mader Group’s (ASX:MAD) buy rating and target to $1.22, implying a 42% share price growth from yesterday’s close price on the back of growth in the iron ore and gold industries.
  • Following Aurizon Holdings (ASX:AZJ) providing its financial results, Citi has reiterated the stock as a buy, but it dropped AZJ’s target to $5.15 due to a lack of transparency in the outlook for coal.
Read Transcript

Good morning, it’s great to be back this Tuesday the 11th of August.

I’m Jessica Amir, a market analyst with Bell Direct.

Well the Aussie share market put on a bit of a show yesterday rising 1.8% to a three-week high and today the futures are suggesting the market will see a bit of a flat start or a 0.05% or 3 *point* fall to be exact.

Overnight, equities ended mixed, traders trimmed tech-stock profits with Facebook, Netflix and Microsoft shares falling around 2% or more.

As a result the Nasdaq fell 0.4% but held on to its gain of 21% this year to date stellar gain.

On the flip side, U.S. cyclical stocks charged bellwether Caterpillar rose 5%, and Boeing also gained over 5% with Nike following.

As for the sectors, the energy and industrial sectors led the charge with the U.S. benchmark, the S&P500 ending 0.3% higher just 1% of a puff away from its February all-time high.

While the Dow Jones soared 1.3% higher.

On the commodities front, the gold price rose US$9.40 or 0.5% to US$2,037 an ounce remaining near its brand-new record high.

The oil price got a kick to US$41.99 a barrel, supported by an improvement in Chinese factory data with the CEO of Aramco, the world’s biggest oil company, saying he sees oil demand rebounding as Asian economies gradually open up.

What else to watch today besides oil and gold stocks and of course the XJO, well firstly the RBA minutes are released which should reveal more detail as to how much money the central bank injected into the financial system when the RBA purchased Australian Government Securities earlier in August.

The RBA did that to provide the Government with capital to prop up the economy while it also wanted to drop the bond yield to its target of 0.25%.

Now to earnings results, they’re coming out thick and fast today for Challenger (ASX:CGF), Coronado Global Resources (ASX:CRN), as well as James Hardie Industries (ASX:JHX) and Shopping Centres Australasia Property Group (ASX:SCP).

Now for three trading ideas, well firstly footwear business Accent Group (ASX:AX1), they’re showing a bullish uptrend according to Trading Central’s charting.

Their chart suggests their stock could rise from yesterday’s close of $1.35 to between $1.68 – $1.76 over the next 31 days using standard principles of technical analysis.

The stock is also backed by fundamental research and for those that know the stock, you probably have seen its exceptional online sales growth.

It’s a Bell Potter buy with a $1.80 target and AX1 has already grown their shares 114% from their COVID-19 low, but it’s still a fair way off its all-time high.

Secondly, Bell Potter upgraded mining equipment business Mader Group (ASX:MAD) buy rating and target to $1.22 implying 42% share price growth from yesterday’s close price on the back of growth in the iron ore and gold industries.

Mader has been able to grow the majority of its business in the fourth quarter, despite COVID-19 and it’s guided stronger growth in FY21 on the back of growth in the iron ore price and the commodity industry.

It also has Roy Hill as a client, and is continuing to build on its client book supporting future growth.

So that’s MAD a Bell Potter buy.

And thirdly, Aurizon Holdings (ASX:AZJ), after they provided their financial results Citi has reiterated AZJ as a buy, but it dropped its price target to $5.15 with the lack of transparency in the outlook for coal.

I’m Jessica Amir with Bell Direct, thanks so much for your company.

Happy trading, stay safe.

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