Morning Bell 13 October

Jessica Amir
October 13, 2020

Another positive day is on the cards for the Aussie share market, with the ASX200 set to lift 0.8%.

Overnight in the U.S., optimism was high ahead of third quarter earnings being released with JPMorgan Chase and Delta Air reporting as early as tomorrow. Sentiment is also high on hopes of a stimulus package being inked, which will provide individuals with $1,200 of pocket money.

What to watch today:

  1. The oil price fell 3% to US$39.53 as U.S. production began to be restored after being shut off after Hurricane Delta.
  2. Gold slipped from its three-week high and trades at US$1,927.
  3. Iron ore fell 1.2% to US$124.
  4. AGM season ramps up locally, with CBA (ASX:CBA), Telstra (ASX:TLS) and EBOS Group (ASX:EBO) holding theirs today.

Trading ideas:

  • UBS increased Bapcor’s (ASX:BAP) price target to $8.55. Citi also reiterated the car part accessory business Bapcor as a Buy with a revved up $8.80 target.
  • Ahead of ANZ reporting financial year results in two weeks, Bell Potter upgraded the big four bank with a $20.50 target, and reiterated its Buy rating.
  • Alliance Aviation Services (ASX:AQZ), Emvision Medical Devices (ASX:EMV) and Catapult Group (ASX:CAT) are all showing bullish charting signals – according to Trading Central.
Read Transcript

Good morning, thanks for your company this Tuesday 13th of October, I’m Jessica Amir, a market analyst with Bell Direct.

Well another positive day is on the cards for the Aussie share market.

Earlier the futures we’re suggesting a lift of 0.8% which will push us off the 6-week high that the market hit yesterday of 6,132 points with investors continuing to seek out favour and invest in momentum growth stocks and those tied to the economic recovery.

Now overnight in the U.S. another positive session optimism was high ahead of third quarter earnings being released with JPMorgan Chase and Delta Air reporting as early as tomorrow.

Sentiment also high on hopes of a stimulus package being inked which will provide U.S. individuals with a $1,200 payment a bit of pocket money.

So U.S. equities climbed further north we saw tech stocks up the most, Apple shares up significantly 6.4% that was their best gain since July ahead of unveiling their first 5G iPhone.

We also saw Facebook and Amazon shares follow up over 4% each.

As for the major indices the Nasdaq jet packed the most of course fueled by those tech gains, the Nasdaq ended 2.6% higher the broader S&P500 up 1.6%.

Now what to watch today a bit of profit tacky you could expect on the commodity side of things and the reason for that is because commodities fell further into the red overnight now the oil price lost 3% it’s now US$39.53 a barrel as U.S. production began to be restored after being shut off for some time with hurricane delta there wreaking havoc.

The gold price has slipped from its 3-week high as investors continuing to favour the risk-on environment and invest into equities.

Now the gold price is currently at US$1,92 an ounce and the iron ore price is also lower as well it’s lost about 1.2% overnight, it’s now at US$124.

Also keep an eye on AGM’s today and what the market announcements or sensitive announcements coming out of that are AMG’s today being held for CBA, Telstra and EBOS Group just to name a few.

As for trading ideas that could be worth a look well Bapcor (ASX:BAP) had their price target and ratings increased by two brokers UBS and Citi.

Now UBS increased map caused target to $8.55, Citi also reiterated the car part accessory business as a buy revving up its target to $8.80 with Citi saying the business that owns Autobarn and Midas Tyres just to name a few is its top pick in the auto sector.

Now that core sales are up 29% from August to September that was less than the 50% growth that they saw in July but nevertheless sales are still trending higher.

Now since early August Bapcor shares have grown 30% but both Citi and UBS say there’s plenty more upside to come and secondly ahead of ANZ reporting financial year results in 2 weeks time, Bell Potter upgraded the big 4 bank with a $20.50 target reiterating it as a buy.

Now Bell Potter expects statutory profit to come in at $3.85 billion, the market is expecting $3.7 billion profit right on the nose and a final div of $0.40 is expected.

The market’s expecting a final dividend of $0.39.

Now the reason for the upgrade by Bell Potter, ANZ has seen an improved second half roughly due to stable and strong volume growth.

Now that’s made up of home loans and deposits offsetting the weaker margins from lower interest rates.

Lastly keep an eye on 3stocks Alliance Aviation (ASX:AQZ), Emvision Medical Devices (ASX:EMV) and Catapult Group (ASX:CAT) all showing bullish charting signals according to Trading Central.

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

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