Morning Bell 25 September

Jessica Amir
September 25, 2020

The Aussie market is eyeing a slight gain of 0.12% at the open. Earlier this week, U.S. existing home sales grew to their highest level in 14 years, and overnight we learnt new home sales got a 4.8% lift, an unexpected rise, supported by record low interest rates. Overnight, U.S. investors bought back into equities, snapping up low hanging fruit. Apple and Microsoft shares rose 1% and 1.3%. The Nasdaq gained 0.4%, S&P500 up 0.3% and the Dow rose 0.2%. And with the risk on-sentiment returning investors sold down the USD, seeing it fall from an almost two-month high.

Commodities:

  • The oil price rose back above US$40.30
  • Gold¬†however lost 0.2% to US$1,873.

What to watch today?

  • The banks – given the Federal Treasurer is planning on scaping responsible lending laws in a bid to encourage loan growth to boost the economy. The legislation was introduced by the Rudd Labour government following the subprime loan crisis in America.

Trading ideas:

  • Brickworks (ASX:BKW) was reiterated by Citi, as buy with a higher $20.95 price target. Citi is bullish on the rise of industrial property demand given the shift to e-commerce. BKW was also reiterated as a UBS Buy given its financial results handed down yesterday were mainly in line with expectations.
  • De Gray Mining (ASX:DEG) was downgraded by Bell Potter from a speculative Buy with a $1.53 price target, implying 14% upside, to a HOLD.¬†The gold miner has new gold discovery in Western Australia and its drilling results have found four zones almost immediately adjacent to each other with potential to supply a large scale, base-load ore to a large processing plant.
  • Keep an eye on cyber security company Tesserent (ASX:TNT), and software management business, IntelliHR (ASX:IHR) as they are giving off bullish charting signals – according to Trading Central.

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