balance of trade data

Wall Street closed mixed overnight with the Dow closing 0.2% higher, while the S&P500 closed 0.3% lower and the tech-heavy Nasdaq fell more than 1%. The Nasdaq dropped for the third straight session as investors shifted away from growth stocks amid signs that the US economy is weakening. The losses also followed weak eco data, where the latest ADP private payrolls report showed slowing job growth in March. 

European markets were also mixed, with the FTSE 100 the only index to close in positive territory. Germany’s Dax, France’s CAC and the Stoxx 600 were all lower. So it seems that investors uncertainly has resurfaced this week, over the global economy outlook. 

What to watch today:

• The SPI futures are suggesting the Australian market will open just 0.1% lower this morning. 
• Watch Santos (ASX:STO)’s share price today, as the oil and gas producer is set to hold its AGM. 
• Brickworks (ASX:BKW) is set to go ex-dividend today. 
• In commodities:
  • Oil is trading slightly lower, after being on the rise this week off the back of OPEC’s production cut announcement. 
  • Gold is steady at its highest levels in a year, around US$2,020 an ounce, as weak US data fuelled expectations that the Fed may not need to tighten further in the coming months to prevent a recession. 
  • Iron ore is at its lowest level since mid-January as the concerns continue of the low demand at the start of China’s peak construction season. 
• In economic data, Balance of Trade data for February will be out at 11:30am AEST. The last time this data was announced, Australia’s trade surplus declined to $11.69 billion in January, from a downwardly revised $12.99 billion in December, with exports rising less than imports. 

Trading Idea:

• Bell Potter maintains a Buy rating on IPD Group (ASX:IPG), a leading distributor of electrical equipment and industrial digital technologies. They have increased their price target from $3.50 to $4.00. The broker says that IPD is set for two consecutive years of approximately 15% volume growth. Their EPS changes across FY23-25 estimates are +4-6% and they say the company has a large future runway of replacement demand as incentives behind the electrification of buildings infrastructure, transport and logistics sectors continue to evolve. 

The new Omicron COVID-19 variant pushed global markets lower this week, with the Aussie share market trading down 0.7% (Mon-Thu). Plus, Aussie investors digested key economic data, including better-than-expected September quarter GDP. 
In this week’s wrap, Sophia covers:

• (0:28) The latest GDP and balance of trade data
• (1:51) Top performer, Collins Foods' (ASX:CKF) strong half-year results
• (2:11) Lynas Rare Earths' (ASX:LYC) gain after broker upgrade
• (3:10) Bell Potter's must have stocks in a portfolio
• (6:50) What stocks Bell Direct clients were trading this week

The ASX dropped about 1% yesterday at the open, however better than expected GDP data trimmed losses from lunchtime onwards. Consumer staples and discretionary sectors dragged the market, while energy stocks were strong despite oil prices dropping. 

In the US, the S&P500 closed flat for the first day of September. Tech stocks strengthened, which pushed the Nasdaq to close at a record high, and the Dow Jones closed 0.14% lower. 

The Aussie share market is set to open lower, with the SPI futures expecting a fall of 0.2% this morning. This follows the mixed session we saw on Wall Street.

What to watch today:

• Australia’s balance of trade data for July will be released today at 11:30am AEST. Expectations suggest that July’s reading will come in at $10.2 billion.
• Companies going ex-dividend today include CSL (ASX:CSL), Deterra Royalties (ASX:DRR), InvoCare (ASX:IVC), Jumbo Interactive (ASX:JIN), NIB Holdings (ASX:NHF) and Woolworths (ASX:WOW). 
• One of the most traded stocks yesterday by Bell Direct clients was Kuniko (ASX:KNI). Its share price lifted nearly 19% yesterday, amid the company appointing a new CEO. 
• The oil price remained steady following OPEC and its allies agreeing to remain consistent with their existing policy of gradual oil output increases. 
• The gold price traded within its range as investors focused on key labour data that could influence the Fed Reserve’s tapering plans.
• The iron ore price plunged over 10% amid production curbs in China. 

Trading ideas:

• Bell Potter has maintained its BUY recommendation on gold producer Regis Resources (ASX:RRL) and has increased its price target by 4% to $4.05 (previously $3.89). This is off the back of Regis Resources releasing its financial year 2021 results ahead of both Bell Potter’s and consensus’ expectations. Regis Resources lifted 0.4% yesterday to $2.48, which implies about 63% share price growth. 
• Bullish charting signals have been identified in Immutep (ASX:IMM), Janison Education Group (ASX:JAN) and Charter Hall Group (ASX:CHC) according to Trading Central.

The ASX200 is eyeing a lift of 1.2% at the open. This week the Aussie share market has gained 3.2% so far and yesterday closed 31% up from its bear market bottom. 

Trading ideas:

• Metals and mining company South32 (ASX:S32) was upgraded by UBS from a hold to a buy as the company is restarting its share-buy-back, returning money to shareholders. 
• Citi reiterated Aurizon Holdings (ASX:AZJ) estimating 10% share price growth to $5.40, following the company maintaining its earnings forecasts and clearing a funding hurler.
• Citi also reiterated CSL (ASX:CSL) as a buy expecting 18% share price growth on the possibility that elevated flu sales could offset the drop in blood plasma donations.

What to watch today:

• Retail trade data is out for April with the market pricing in a fall of 17.9% following the gain of 8.5% in April. If the figure at 11.30am misses the expectation, keep an eye on discretionary spending stocks.
• Australia’s balance of trade data for April is out today. The market is pricing in that April’s trade balance will fall to a $7.5 billion surplus, so keep an eye on mining stocks like Fortescue Metals (ASX:FMG), BHP (ASX:BHP) and Rio Tinto (ASX:RIO).
• Magellan (ASX:MFG) just announced funds under management grew $1 billion to $98 billion in May with the group receiving new retail inflows in the month.

In today's morning bell, Jessica discusses:

• Local markets - (0:00)
• Global markets - (0:22)
• What to watch today - (1:33)
• Trading ideas: South32 (ASX:S32) - (2:52), Aurizon Holdings (ASX:AZJ) - (3:28) & CSL (ASX:CSL) - (3:44)

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