Morning Bell 19 August

Between the Bells

Wall Street closed higher on Friday to end the best week across the major averages in 2024, posting a major comeback from the mass exodus of equities that started August on a very sour note. The Nasdaq rose 0.21% on Friday and 5.2% for the week, the S&P500 added 0.2% on Friday and 3.9% for the week and the Dow Jones rose 0.24% on Friday and 2.9% for the week. Economic data released late last week was the catalyst for Friday’s rally with retail sales data out on Thursday coming in higher than expected while weekly jobless claims fell for a second week in a row. The mega cap rebound peaked last week with Nvidia gaining 18% over the 5-trading days while Apple and Microsoft rose 4% and 3% respectively for the week.

Over in Europe markets mostly ended the week on a positive note with the STOXX 600 index adding 0.31% on Friday and a record weekly gain of 2.4%. Germany’s DAX rose 0.77% on Friday, the French CAC added 0.35% and, in the UK, the FTSE100 ended the day down 0.43% following the release of UK inflation data showing an uptick to 2.2% in July and retail sales coming in at a rise of 0.5% for July from a 0.9% decline in June.

Across the Asia markets on Friday, Japan’s Nikkei posted its best week in 4-years with a rise of 3.64% on Friday while the index was up 8.67% over the week. South Korea’s Kospi Index rose 1.99% on Friday, Hong Kong’s Hang Seng added 1.81% and China’s CSI index ended the day up 0.11%.

Locally on Friday, the ASX200 rose 1.34% despite RBA governor Michele Bullock saying thinking about rate cuts in Australia is still too premature as the US prepares for rate cuts likely in September. For the week, the ASX200 posted a gain of 2.3% as corporate earnings results this reporting season are broadly in-line with expectations.

A2 Milk shares rose 5% on Friday after the infant formula company settled its dispute with NZ-based dairy processing company Synlait Milk.

Magellan Financial shares also rose 3% on Friday a day after the fund manager released full year results including a 31% jump in statutory net profit after tax and a final dividend declared of 28.6cps.

What to watch today:

• Ahead of the first trading session of the new week the SPI futures are anticipating the ASX to open the day down 0.18%.
• On the commodities front this morning oil is trading down 0.4% at US$76.35/barrel, gold is down 0.15% at US$2504/ounce, and iron ore is trading 0.75% lower at US$97.81/tonne.
• The Aussie dollar has strengthened to buy US$0.67 cents, 98.63 Japanese Yen, 51.53 British Pence and NZ$1.10.

Trading Ideas:

• Bell Potter has decreased the 12-month price target on Nufarm (ASX:NUF)and maintain a hold rating on the leading producer of ag-chem products globally following a trading update out of the company with softer-than-expected trading in North America and Europe leading to the company downgrading FY24 EBITDA expectations from $350-$390m to $300m-$330m.
• And Trading Central has identified a bullish signal on Australian Clinical Labs (ASX:ACL) following the formation of a pattern over a period of 56-days which is roughly the same amount of time the share price may rise from the close of $2.64 to the range of $3.10 to $3.25 according to standard principles of technical analysis.