Morning Bell 5 November

Jessica Amir
November 5, 2020

The Aussie share market is eyeing a lift of 0.3% at the open.

U.S. equities rallied for the third straight day, looking past the idea that the Presidential election result could be contested, while Trump’s campaign has taken legal action to halt the counting of the ballots in Michigan and Pennsylvania.

What to watch today:

  • The NSW border opens to Victoria on November 23, this could support Qantas’ (ASX:QAN) recovery.
  • The Australian Government has secured two more potential COVID-19 vaccines, with 40 million doses being developed by biotechnology company Novavax, and 10 million doses being produced by Pfizer and BioNTech. Both vaccines are in stage three trials.
  • National Australia Bank (ASX:NAB), Goodman (ASX:GMG) and GWA Group (ASX:GWA) report results today.
  • Amcor (ASX:AMC), Ansell (ASX:ANN), Coles (ASX:COL), Downer EDI (ASX:DOW) and Estia Health (ASX:EHE) hold their AGMs today.
  • All eyes will be on Flight Centre Travel (ASX:FLT) as travel restriction ease and Treasury Wine Estates (ASX:TWE) on the back of China’s import ban.

Local trading ideas:

  • Bell Potter increased Domino’s Pizza (ASX:DMP) to a Buy with a price target of $99.30, implying 14% upside.
  • Bell Potter upgraded Imdex (ASX:IMD) from a Hold to a Buy, and increased its price target to $1.45, implying 20% upside in a year.
  • Keep an eye on Qantas (ASX:QAN) today. UBS has the stock as a Buy with a $5.25 target.
  • Pact Group (ASX:PGH), Frontier Digital Ventures (ASX:FDV) and Red 5 (ASX:RED) are all showing bullish charting signals according to Trading Central.
Read Transcript

Good morning, thanks for your company this Thursday the 5th of November, I’m Jessica Amir, market analyst with Bell Direct.

All U.S. equities rallied for the third straight day looking past the idea that the presidential election result could be contested while Trump’s campaign have taken legal action to halt the counting of ballots in two key states Michigan and Pennsylvania.

We saw Biogen shares lead the advance rising 44% after the FDA appeared to deem its drug as effective in treating Alzheimer’s.

While tech darlings continue to do well as the republican party appears to be winning the senate which means taxes will likely not be increased so Facebook shares rose over 8% almost making the same gain as Adobe while Google parent Alphabet rose 6%.

Now this all helped the Nasdaq lift the most, outperform the three major indices up 3.9%, while the broader S&P rose 2.2%, and the Dow lifted 1.3%.

Oil advanced 3% to US$39.6 a barrel as U.S. oil supply fell.

Safe havens continued to lose funds gold lost 0.6%, it’s now US$1,899 an ounce while the U.S. dollar against a bunch of currencies fell 0.1%.

And bonds have been fairly volatile the yield touched a five-month high early in the session with investors exiting out of the safe haven of bonds as Trump appeared to lead the election but tables turned and Biden has gained the upper hand or so it seems and investors bought back into bonds which pushed the yield down 0.8%.

As for local trade the market is eyeing a lift today of 0.3%, that’s if you go by the futures.

What to watch, well the first major thing of course the U.S. election, secondly New South Wales borders open to Victoria on the 23rd of November which supports Qantas recovery you’d think and thirdly the Australian government has secured two more potential COVID-19 vaccines, 40 million doses being developed by biotech company Novavax and 10 million doses being produced by Pfizer and BioNTech, both vaccine trials are in stage 3 trials and now this supports the share market recovery so you’d think as well.

Results today out for National Australia Bank (ASX:NAB), Goodman group (ASX:GMG) and GWA Group (ASX:GWA).

AGMs, well there’s plenty Amcor(ASX:AMC), AWN (ASX:AWN), Coles (ASX:COL), Downer (ASX:DOW), Estia Health (ASX:EHE) while close attention will be paid to Flight Center (ASX:FLT) as travel restrictions are easing and Treasury Wines (ASX:TWE) AGM really on the back of the China import ban so pay close attention to those if you’re looking at investing or if you are invested.

As for trading ideas that could be worth a look, Bell Potter increased the buy rating of Domino’s Pizza (ASX:DMP) bumping up its target to $99.30 implying 14% upside in a year really as sales are continuing to grow and new store openings are progressing as expected in Japan, France and Germany and Domino’s pizza also reaffirmed its three and five-year guidance levels while Bell Potter says DMP looks comfortably able to achieve its targets for this financial year amid strong pizza sales growth.

And Bell Potter upgraded Imdex (ASX:IMD) from a hold to a buy increasing its target to $1.45 that implies 20% upside in the year, Bell Potter says Imdex the tech company which is behind the mining sector if it’s preferred by some mining companies well its recovery is supported by the strong recovery in global exploration over the next two years that’s according to Bell Potter.

And lastly keep an eye on Qantas (ASX:QAN) today UBS has the stock as a buy a $5.25 target, Qantas has seen a bit of a share price momentum in fact quite strong it’s up about 9% so far this week.

Now this is supported by the reopening of the borders and UBS encourages people to think about the upside regardless of international travel being restricted excluding New Zealand of course.

Lastly keep an eye on three stocks from a technical trading perspective Pact Group (ASX:PGH), Frontier Digital Ventures (ASX:FDV) and Red 5 (ASX:RED) all showing strong bullish signals according to Trading Central.

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

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