Morning Bell 2 December

Wall Street closed in record territory again on Friday to close out a very strong November month for equities with the Dow Jones rising 0.42% to a record 44,910.65, the S&P 500 added 0.56% to a record 6032.38, and the Nasdaq ended the day up 0.83%. Chip stocks rallied on Friday on reports that the Biden administration was considering additional barriers on the sale of semiconductor equipment to China that weren’t as strong as previously expected.

In Europe on Friday, markets closed higher on the back of the latest eurozone inflation data being released indicating a rise to 2.3% in November from 2% in November, which is above the ECB’s target of 2% but in line with economists’ expectations. The STOXX 600 rose 0.96% on Friday, Germany’s DAX rose 1.04%, the French CAC added 0.78% and, in the UK, the FTSE100 ended the day up 0.07%. 
Across the Asia region on Friday, markets closed in the mostly red led by South Korea’s Kospi index falling 1.95%, following the release of key economic data in the region. South Korea’s decline was due to industrial production growth falling 0.3% in October compared to September, while Tokyo’s inflation rate rose to 2.6% up from 1.8% in October, which led the Nikkei to fall 0.4% on the rise in inflation. Hong Kong’s Hang Seng rose 0.2% on Friday while China’s CSI index ended the day up 1.14%.

Locally on Friday, the ASX closed out the last trading session for November 0.1% lower as a broad sell off led by REIT stocks offset a strong 0.82% rally for the materials sector. Despite the weakness on Friday, the key index posted 2 record closes in the final trading week of November.

Select Harvest shares fell 5.4% on Friday despite the almond producer reporting a return to profitability through posting NPAT of $1.5m which is a significant turn around from the $114.7m net loss posted in FY23.

And embattled casino operator Star Entertainment hit a record low share price on Friday of 18cps following a rating downgrade from Macquarie. The broker downgraded Star to an underperform rating after the company reported an earnings loss of $27m in the first four months of the new financial year.

What to watch today:

• Ahead of Monday’s trading session the SPI futures are anticipating the ASX to open the first trading day of December up 0.25% on the back of Wall Street’s record close on Friday and ahead of learning how strong the Black Friday sales were on the Friday just gone.
• On the commodities front this morning oil is trading 0.43% lower at US$68.63/barrel, gold is up 0.72% at US$2657.79/ounce and iron ore is up 0.26% at US$102.44/tonne.
• The Aussie dollar has weakened to buy US$0.65, 97.58 Japanese Yen, 51.16 British Pence, and NZ$1.10.

Trading Ideas:

• Bell Potter has downgraded the rating on QBE Insurance (ASX:QBE) from a buy to a hold and have raised the 12-month price target on the insurance group from $19.05 to $19.20 following the release of a Q3 trading update including gross written premiums up just 2%, premium rate increases across the group reduced from over 8% a year ago to 4.9% at Q3, and full year guidance unchanged. The reason for the downgrade to a hold is the benign Q3 update against shares performing well over the recent period.
• And Trading Central has identified a bullish signal on Myer (ASX:MYR) following the formation of a pattern over a period of 23-days which is roughly the same amount of time the share price may rise from the close of $1.06 to the range of $1.20 to $1.24 according to standard principles of technical analysis.