Morning Bell 8 October

Jessica Amir
October 8, 2020

The Aussie market looks set to open 0.4% higher. So far the market has already gained 4.3% this week, its best gain in 20 weeks – so the key is sustaining that.

Overnight, U.S. equities got a kick after U.S. President Trump back peddled in a Tweet, urging Congress to approve COVID-19 stimulus measures like airline support, support for small business and a $1,200 payment to individuals.

Commodities:

  • The oil price is back above US$40 despite having a volatile night.
  • Gold has slipped almost 3% in two days to US$1,890 on the back of stimulus hopes, with traders ploughing back into equities instead.

What to watch today

  • Companies going ex-dividend today: include Pengana International Equities (ASX:PIA), and ARB (ASX:ARB). ARB was initially one of yesterday’s best performers and its shares surged to an all-time high when the car accessory business reported sales growth of 18% in the September quarter. But today, ARB could see a pull back as companies usually trade lower on ex-div days.

Trading ideas:

  • Commonwealth Bank of Australia (ASX:CBA) was reiterated as a Bell Potter Buy, with a target price of $73.50, suggesting it will rally 11% from yesterday’s close, supported by yesterday’s budget announcement to help individuals, pensioners, and businesses.
  • Saracen (ASX:SAR) is a UBS Buy with a $6.75 target, following the proposed merger with Northern Star (ASX:NST).
  • JB Hi-Fi (ASX:JBH), Nick Scali (ASX:NCK) and Vita Group (ASX:VTG), are all showing bullish charting signals – according to Trading Central.

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