Morning Bell 29 June

Jessica Amir
June 29, 2020

The Aussie futures are suggesting a fall of 1.6% at the open, with the U.S. futures currently down 0.5%.

There’s just one more sleep until the end of the financial year, with ASX portfolio adjustments to continue today and tomorrow. Local traders and investors will also be factoring in the poor finish in the U.S. on Friday. The overarching concern is COVID-19 cases are spiking with fears of mandated shut downs and concerns that the market rally was too soon.

What to watch today:

  • A survey of U.S. Fund managers has found that they are holding 10% cash, that’s double the long term average. The fund managers also said they are investing in defensives, and technology for growth.
  • Ampol (ASX:ALD) appointed Matthew Halliday as Managing Director and CEO.
  • Fisher & Paykel (ASX:FPH) reports full year results.

Local Trading ideas:

  • Air traffic and management Adacel Technology (ASX:ADA) was reiterated as a Bell Potter buy after the U.S. Army purchased over 60 Adacel simulators valued at US$2.8 million.
  • Credit Suisse increased Qantas’ (ASX:QAN) share price target to $3.00 after it fell about 13% last week after announcing $15 billion in cost savings over the next three idle years and then $1 billion a year in savings from FY23.
  • GUD (ASX:GUD) was reiterated by Citi and Bell Potter as a buy given the rise in spare parts demand. GUD is also paying a fully franked dividend yield and is well above market average.
Read Transcript

Good morning, well there’s just one more sleep until the end of financial year with ASX portfolio adjustments to continue today and tomorrow.

Local traders and investors will also be factoring in the poor finish in the U.S. on Friday with the Dow Jones falling 730 points or 2.8% and the Nasdaq down 2.6%.

Now despite the Nasdaq falling, it has remained in record high hood.

Nevertheless, the overarching concern is COVID-19 cases are spiking, there’s fears of new mandated shutdowns and the concerns are that the market rally was too far too soon.

Now on top of all this, a Chinese newspaper has accused Australia of spying and gathering intelligence.

On the commodity front, the oil price poured loss of 1.5% to US$37.93, the gold price glistened up 0.4% to US$1,787 an ounce, copper lost 0.2%, while the iron ore price went the other way up 0.2% to $103.23.

Now what to watch today, taking everything into equation the futures are suggesting a fall of 1.6% bearing in mind the ASX200 is now up about 30% from its bare market bottom but down 17% from its all-time February high.

Now outside of that a survey of U.S. fund managers has found that they’re holding double the amount of long-term average cash 10% cash and an alarming 80% are expecting Donald Trump not to win the U.S. presidential election later this year.

Now the fund managers have also said that they’re increasingly investing in defensive asset classes and technology for growth.

Now on the company news front, Ampol (ASX:ALD) has just appointed Matthew Halliday as its managing director and CEO. Fisher & Paykel (ASX:FPH) reports of foggy results today.

Ending on three trading ideas, now air traffic and management company Adacel Technology(ASX:ADA) was reiterated as a Bell Potter by after the U.S. Army purchased over 60 Adacel simulators valued at a total of $2.8 million.

Secondly, Credit Suisse increased Qantas (ASX:QAN) share price target to $3 after the flying kangaroo fell 13% last week after announcing $15 billion in cost savings over the next 3 idle years and then $1 billion in cost savings from FY2023.

All of this at a time when the flying kangaroo announced it doesn’t expect to fly internationally until July next year.

And lastly, given the automotive aftermarket segment has been upgraded given many of us don’t want to catch public transport and aren’t likely to buy a new car, this is to the benefit of aftermarket car business GUD (ASX:GUD).

Now Citi and Bell Potter reiterated the stock as a buy given the rise of spare part demand.

Now GUD is also paying a fully franked dividend yield and it’s well above the average yield and fully covered by a strong balance sheet.

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

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