Morning Bell 3 July

Jessica Amir
July 3, 2020

The Aussie share market is tipped to rise 0.6% at the open. So far the ASX200 is on track to close off its best week in five weeks, after rising 2.2% Monday to Thursday.

U.S. equities charged following a record rise in U.S. employment with 4.8 million jobs being added in June and the U.S. unemployment rate dropping to 11.1%, both significantly better numbers than expected.

What to watch today:

  • U.S. markets will be shut on Friday for the 4th of July Holiday.
  • Retail sales data is out for May with the market pricing in a 16.3% recovery following the 17.7% landslide in April.

Local Trading ideas:

  • Bell Potter increased its price target for fund manager Janus Henderson (ASX:JHG) to $41.25, noting it’s set to benefit from material mark-to-markets during the June quarter and from the ongoing share buyback the company has underway. Janus Henderson also has an attractive dividend with a 6.9% yield and is a buy for Bell Potter.
  • Netwealth’s (ASX:NWL) shares are already up 19% this year and given the market rallied over 16% in the June quarter, Netwealth’s revenue and earnings are expected to be at the top of their guidance level as their assets would have increased. Bell Potter also upped Netwealth’s buy rating and price target to $9.10.
  • Webjet (ASX:WEB) was reiterated as a UBS buy following select destinations being open for leisure travel. UBS increased Webjet’s price target to $5.35.
Read Transcript

Good morning, well a record rise in U.S. employment with 4.8 million jobs being added in June and a drop in the U.S. unemployment rate to 11.1%, both significantly better numbers than expected, saw U.S. equities charge overnight.

Boeing also completed its recertification flights for its grounded 737 Max jets which added to the gains.

The Nasdaq scaled to another record high after gaining 0.5%, the S&P500 followed up by the same amount while the Dow Jones gained 92 points 0.4%.

Now over the week to Thursday, the Nasdaq ended 4.6% higher, that’s its best weekly gain in almost two months.

The S&P500 up 4%, the Dow up 3.3% over the four trading days.

Now on the commodity front, the oil price guzzled up 2% to US$40.29, gold put on a bit of a show hitting an eight-year high US$1,787 and the copper price rose 1%.

A different story for the iron ore price which stumbled 4.8% lower erasing about a month of gains.

Now what to watch today, well the Aussie share market is tipped to rise 0.6% according to the SPI futures and so far the Aussie share market is on track to close off its best week in five weeks after rising 2.2% percent from Monday to Thursday.

Keeping in mind the Aussie share market is now up about 33% from its bear market COVID-19 bottom, also keep in mind U.S. markets are shut on Friday for the 4th of July holiday.

In terms of local economic data out today, retail sales are out for the month of May, the market is pricing in a 16.3% jump following the 17.7% landslide that we saw in April.

Now ending on three local trading ideas, well firstly Bell Potter has increased its price target for the funder manager Janus Henderson (ASX:JHG) to $41.25, noting it’s set to benefit from the mark to markets rally in the June quarter given that the market rose in entirety up over 6%.

The company Janus Henderson is also set to benefit from its ongoing share buyback which is underway.

Now Janus Henderson also has an attractive dividend yield of almost 7%. Janus Henderson is a Bell Potter buy.

Another stock that’s a beneficiary of the market bounce is financial platform Netwealth (ASX:NWL), its shares are already up 19% this year and given the market has rallied 16% in the June quarter Netwealth’s revenue and earnings are tipped to be at the top end of their guidance and you would expect that would push their share price further higher.

Now Bell Potter upped it’s buy rating for the platform giving it a price target of $9.10 for Netwealth.

Thirdly Webjet (ASX:WEB) was reiterated as a UBS buy as select destinations are reopening for leisurely travel and its also got more fire power up its sleeve after raising $163 million in convertible notes.

UBS increased Webjet’s price target to $5.35.

I’m Jessica Amir from Bell Direct, stay safe, happy trading, bye for now.

Close Transcript

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