Morning Bell 20 November

Wall Street closed higher on Tuesday despite rising geopolitical tensions between Russia and Ukraine. The Nasdaq led the gains with a rise of 1% as Nvidia popped 5% ahead of the release of its earnings results out on Wednesday. The S&P500 ended Tuesday’s session up 0.5% and the Dow Jones reversed early session losses to close 0.1% higher.

Walmart shares are up over 5% after the US retail corporation posted better-than-expected earnings and hiked its outlook on strong discretionary spend in the US. While Lowe’s, the home improvement retailer, fell over 3% on Tuesday after saying it expects sales to decline in 2024.

In Europe overnight, markets closed lower in the region as investors assess a spike in geopolitical tensions centred on Russia. The STOXX 600 fell 0.45%, Germany’s DAX and the French CAC each lost 0.67%, while in the UK, the FTSE100 ended the day down 0.13%.

Across the Asia region on Tuesday, markets closed higher on the back of Wall Street’s rally on Monday. China’s CSI index rose 0.67%, Hong Kong’s Hang Seng added 0.4%, Japan’s Nikkei rose 0.51% and South Korea’s Kospi index ended the day up 0.12%.

The local market extended its green run into Tuesday with the key index gaining 0.9% to a fresh record high at close of 8374 points driven by the Nasdaq on Wall St on Monday, optimism of greater stimulus out of China and gold miners rebounding on a rise in the price of the precious commodity.

The RBA meeting minutes released yesterday painted clear picture about where Australia’s central bank is focused in regard to inflation drivers before even considering interest rate cuts. The minutes outlined that consumer spending, labour productivity and the outlook for the global economy remain uncertain and are the key drivers of inflation and the inflationary outlook impacting the RBA’s decision. The minutes also outlined that underlying inflation is not expected to return to the sustainable target until 2026.

Stock specifically yesterday TechnologyOne shares did most of the heavy lifting for our tech rally with a gain of 10.1% after the SaaS company posted a 15% increase in full-year net profit to $118m while revenues rose 17%.

On the retail front KMD Brands fell over 3.8% on Tuesday after the Rip Curl parent company warned of cautious consumer sentiment after posting a decline in quarterly sales. Retailers have begun offering black Friday sales early across the board in a bid to reduce inventory levels.

What to watch today:

• Ahead of the midweek trading session on the ASX the SPI futures are expecting the local market to open the day down 0.12%, easing from yesterday’s record close.
• On the commodities front this morning, oil is trading 0.23% higher at US$69.36/barrel, gold is up 0.65% at US$2629/ounce and iron ore is up 0.13% at US$101.76/tonne.
• The Aussie dollar has strengthened against the greenback overnight to buy US$0.65, 100.83 Japanese Yen, 51.38 British Pence, and NZ$1.10.

Trading Ideas:

• Bell Potter has increased the 12-month price target on Gentrack Group (ASX:GTK) from $10.90 to $11.50 per share and maintain a buy rating on the specialist billing and CRM solutions provider to managed services. The target price increase is ahead of GTK’s full year results being released on 26th November and the analysts’ bullish outlook on the company’s ability to maintain customer win momentum.
• And Trading Central has identified a bullish signal on Centuria Capital (ASX:CNI) following the formation of a pattern over a period of 36-days which is roughly the same amount of time the share price may rise from the close of $1.89 to the range of $2.15 to $2.23 according to standard principles of technical analysis.