Morning Bell 22 June

Sally Garrow
June 22, 2020

State and Federal Governments are divided over reopening the Australian economy with the World Health Organisation warning the pandemic is accelerating. This explains why the Aussie share market futures are suggesting a 1.3% fall at the open.

Today, investors will be watching:

  • BHP (ASX:BHP) & Whitehaven Coal (ASX:WHC) following the coal price gain of 1.6%; and New Century Resources (ASX:NCZ) following the 1.5% uptick in zinc.
  • The Federal Government is set to ramp up its spending on cyber security following an attempted hack into Australian networks. You could think about companies that could benefit or the ETF (ASX:HACK) which has already gained 14% this year.
  • Metcash (ASX:MTS) full year results were announced. Food, liquor & hardware sales up in FY21 first seven weeks.
  • Transurban Group (ASX:TCL) Q42020 sales are out. Transurban announced a reduced distribution of $0.16 per share for the next six months through June.
  • Harvey Norman (ASX:HVN) goes ex-dividend today.
  • The RBA Governor Phillip Low will be giving a speech at 10am.

Local trading ideas:

  • UBS upgraded Adairs’ (ASX:ADH) earnings per share following Adairs’ sales guidance levels beating their forecasts. UBS gives Adairs a price target of $2.55.
  • UBS upgraded Sigma Healthcare (ASX:SIG) price target by 15% to $0.61.
  • Bell Potter upgraded AMA’s (ASX:AMA) price target to $0.85 after AMA performed better in terms of profitability and cash generation than management and market expectations.
Read Transcript

Good morning, happy Monday.

Well State and Federal Governments are divided over reopening the Australian economy with the World Health Organization warning the pandemic is accelerating.

Now this explains why the Aussies share market futures are suggesting a 1.3% fall at the open this Monday morning.

Now on Friday U.S. equities did pair back some of their gains, really after the U.S. current account deficit, which is the flow of goods and services in and out of the U.S. fell more than expected in the first quarter to $104.2 billion USD.

The Dow lost 200 points while the S&P500 fell 0.6% but held onto that 41% smashing gain from the March bottom, while the Nasdaq closed flat after Apple announced that their reclosing some of their stores after COVID-19 cases are on the rise in the U.S..

Now on the commodity front, the oil price lept 2% higher to $39.17, gold gained $8.80 or 0.5% to $1,762 and the iron ore price last traded flat at $103 USD.

While coal has firmed 1.6% higher and Zinc moved 1.5% up.

Now what to watch today, keep an eye on 1 – BHP (ASX:BHP) and Whitehaven Coal (ASX:WHC) following the coal prices moving higher and New Century Resources (ASX:NCZ)following the zinc uptick.

Secondly with the Federal Government set to ramp up their spending on cyber security following the attempted hack into Australian networks you could think that companies in this domain will benefit or the ETF (ASX:HACK) which is already up 14% this year.

Thirdly, Metcash (ASX:MTS) results are out, they’ve just announced food, liquor, hardware and sales are up in the first seven weeks of FY21 and Metcash has declared a dividend as well.

In other news Transurban (ASX:TCL) Q4 sales are out and they announced a reduced distribution of $0.16 per share for the next six months through to June.

Harvey Norman (ASX:HVN) goes ex-dividend today so expect to see some selling.

Lastly on the economic front, the RBA Governor Phillip Lowe will give a speech at 10:00 a.m.

Now ending on local trading ideas, firstly UBS upgraded Adairs’ (ASX:ADH) earnings per share following Adairs’ sales guidance levels beating their forecasts and market expectations.

Now UBS is targeting a price of $2.55, it’s a buy for UBS.

Secondly staying on UBS, they’ve upgraded Sigma Healthcare (ASX:SIG) their price target by 15% to $0.61.

Lastly Bell Potter upgraded AMA’s (ASX:AMA) price target to $0.81 after AMA has performed better than expected in terms of profit and cash flow and generation.

I’m Jessica Amir with Bell Direct, have a great day, happy trading and stay safe.

Close Transcript

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