Morning Bell 22 August

Between the Bells

The likelihood of a rate cut out of the Fed in September sent Wall Street back into rally mode overnight as investors digested the positive rate outlook in the Fed’s latest FOMC meeting minutes. The S&P 500 rose 0.42% on Wednesday, while the Nasdaq added 0.57%, and the Dow Jones ended the day up 0.14%. Wall Street now awaits further indication of rate cuts out of Fed Chair Jerome

Powell at his Jackson Hole Economic Symposium speech on Friday. US retail giant Target jumped 11% on Wednesday after reporting Q2 earnings that exceeded Wall Street estimates while department store giant Macy’s tumbled 13% after lowering its full year sales forecast.

Over in Europe on Wednesday, markets closed higher on positive sentiment out of the U.S. and ahead of flash PMI figures out for the eurozone on Thursday. The STOXX 600 rose 0.32% on Wednesday, Germany’s DAX added 0.5%, the French CAC gained 0.52%, and, in the UK, the FTSE100 closed the midweek session up 0.12%.

Across the Asia region on Wednesday, markets were mostly lower on weaker-than-expected economic data out in the region. Japan’s Nikkei fell 0.3% after Japan’s trade balance data for July indicated higher exports than imports, imports exceeded expectations and exports fell short of economists’ forecasts. Hong Kong’s Hang Seng fell 0.82% on Wednesday, China’s CSI index lost 0.33% and South Korea’s Kospi index ended the day up 0.17%.

Locally on Wednesday, the ASX200 reversed losses in afternoon trade as a 5% rally for tech stocks and a 1.72% gain among mining stocks offset losses among energy, REIT and financial stocks.

Wisetech global did most of the heavy lifting in the tech-sector’s near 5% rally as the logistics software company soared over 18% on FY24 results including total revenue increasing 15% organically on FY23 to $1.041bn, CargoWise revenue lifting 19% organically to $880.30m, underlying NPAT rising 15% on FY23 to $283.5m, and the final dividend increased 10% to 9.2cps. WiseTech’s results were driven by its recent aggressive acquisition strategy flowing through to improved financial results.

What to watch today:

• Ahead of Thursday’s trading session the SPI futures are anticipating the ASX to open the day up 0.35% tracking global gains overnight.
• Australian property development company Charter Hall also rocketed over 15.5% on Wednesday after releasing stronger-than-expected FY24 results including operating earnings of $358.7, with operating EPS post-tax of 75.8cps, FY24 statutory loss of $222.1m and distributions to the value of 45.1cps. Investors likely rallied around the REIT stocks after it issued guidance for FY25 with the expectation of FY25 EPS to grow to approximately 79cps, with a 6% increase in distributions.
• On the commodities front this morning, oil is trading 1.7% lower at US$71.92/barrel, gold is up just 0.02% at US$2513/ounce, and iron ore is down 0.11% at US$97.99/tonne.
• The Aussie dollar is buying US$0.67 cents, 97.90 Japanese Yen, 51.53 British Pence, and NZ$1.09.

Trading Ideas:

• Bell Potter has increased the 12-month price target on Cedar Woods (ASX:CWP) from $5.75 to $6.50 and maintain a buy rating on the real estate development company following FY24 results coming in as a strong beat including EPS of 49.2cps which beat Bell Potter expectations by 7.4% and the company guided to NPAT growth of 10% for FY25.
• Trading Central has identified a bullish signal on Hansen Technologies (ASX:HSN) following the formation of a pattern over a period of 54-days which is roughly the same amount of time the share price may rise from the close of $4.68 to the range of $5.15 to $5.25 according to standard principles of technical analysis.