Morning Bell 28 July

Jessica Amir
July 28, 2020

The Aussie share market is set to gain 0.4% at the open, a nice addition to yesterday’s 0.3% gain.

It was another action-packed night with the gold price continuing to climb, U.S. equities clawing back and the Republican party unveiling parts to their COVID-19 relief plan, including a 70% wage replacement of sorts.

Companies reporting today:

  • Credit Corp (ASX:CCP) – Full year
  • G.U.D Holdings (ASX:GUD) – Full year
  • Iluka Resources (ASX:ILU) – 2Q20 Prod

Local trading ideas:

  • Bell Potter upgraded Emeco Holdings’ (ASX:EHL) buy rating and price target to $1.60, implying 62% share price growth from yesterday’s close price of $0.99. The bullish outlook comes as EHL reported solid FY20 results in line with expectations, with profit up 23%. EHL also unveiled a stronger than expected FY21 outlook for earnings.
  • Bell Potter upgraded fund manager Perpetual’s (ASX:PPT) buy rating and price target to $45.00, implying 32% share price growth from its last close at $33.61. It comes as PPT announced the 75% purchase of U.S. based fund manager who manages US$44 billion.
  • Ahead of Rio Tinto (ASX:RIO) releasing their results tomorrow, UBS reiterated its hold rating and price target of $102 for RIO, implying its shares will fall from yesterday’s close of $102.89. UBS says with commodity prices being slower, earnings are tipped to fall 6% to US$4.6 billion.
  • Following HUB24’s (ASX:HUB) fourth quarter trading update, Citi maintained its buy rating and $14.40 target for the stock.
Read Transcript

Good morning and thanks for your company this Tuesday the 28th of July.

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

Well it was another action-packed night with gold climbing the stairway to heaven, U.S. equities clawing back and the Republican party unveiling parts of their COVID-19 relief plan, including a 70% wage replacement of sorts.

Elsewhere, the oil price edged ahead, it’s now US$41.63 a barrel.

Now as for the gold price, that rose over 2.1% to another record high of US$1,938 and it started to approach US$2,500.

But it is importantly the second day that gold has hit a brand-new record high, on US-China tension, economic slowdown fears with U.S. GDP data out this week, and thirdly gold yields, which have an inverse relationship to gold fell.

On the stock side of things, Tesla shares rose the most in the Nasdaq up 8.6%, while among the top 30 stocks, biotech giant Merck and Apple rose 2.4% each.

Construction giant Caterpillar as well as oil kingpin Exxon Mobile followed up 1.5% each.

The Nasdaq itself ended up the most out of the three major indices up 1.7%, the S&P500 up 0.7% and the Dow only put on 0.4%.

Now if the futures are right taking everything into the equation, the Aussie share market is set for a lift of 0.4%, a nice addition to yesterday’s 0.3% lift.

So what to watch today, well Credit Corp (ASX:CCP) reports full year results, G.U.D Holdings (ASX:GUD) also reports results, as well as Iluka Resources (ASX:ILU) reporting production results for the quarter.

Now for a couple of trading ideas, well firstly Bell Potter upgraded Emeco Holdings’ (ASX:EHL) buy rating and price target to $160 and that implies 62% share price growth from yesterday’s close of $0.99.

The bullish outlook comes as Emeco reported a solid FY20 result package in line with expectations with profit up 23%.

Emeco also unveiled a stronger than expected outlook for FY21, so good news there.

Secondly, Bell Potter upgraded fund manager Perpetual (ASX:PPT) price target and rating to $45 and that implies 32% share price growth at its last close price of $33.61.

Now it comes as PPT announced the 75% purchase of a U.S. based fund manager who manages US$44 billion.

And thirdly, ahead of Rio Tinto (ASX:RIO) releasing their results tomorrow, UBS reiterated its hold rating for the mining giant and price target of $102 which implies its shares will fall from yesterday’s close of $102.89.

Now UBS says on the back of commodity prices being lower, earnings are tipped to fall 6% to US$4.6 billion and expect an interim dividend of US$1.42 per share to be announced and that’s on par with the last three dividend payouts.

And finally HUB24 (ASX:HUB), their fourth quarter trading update was better than expected and Citi maintained its buy rating and $14.40 target.

I’m Jessica Amir with Bell Direct, thanks for your company, happy trading and stay safe.

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