Morning Bell 10 September

Between the Bells

Over in the US, Wall Street started the new trading week in positive territory as investors bought into the dip following Wall Street’s worst week in a year last week. The Dow Jones rose 1.2% on Monday, the S&P500 climbed 1.16% in recovery after the index posted its worst week since March 2023 last week, and the tech-heavy Nasdaq ended Monday’s session up 1.16%. Investor eyes in the US are now firmly focused on the Fed’s rate decision with the expectation of a cut to be announced later this month.

In Europe overnight, it was a positive start to the week in the region as the STOXX 600 rose 0.76% led by travel and leisure stocks, while Germany’s DAX added 0.77%, the French CAC rose 0.99% and, in the UK, the FTSE100 ended Monday’s trading session up 1.09%.
Across the Asia markets on Monday, key economic data out in the region painted a picture of eased economic stability which weighed on investor sentiment on Monday. Japan’s Q2 GDP came in at 2.9% on an annual basis which fell short of economists’ expectations of a 3.2% rise. Japan’s Nikkei closed Monday’s session down 0.48%, Hong Kong’s Hang Seng lost 1.42%, and China’s CSI index ended the day down 1.2%.

On Monday, China’s consumer price index climbed by 0.6% YoY in August which fell short of economists’ expectations and paints a further concerning picture about the economic recovery of the world’s second largest economy. China’s producer price index also fell 1.8% YoY in August which was also a worse reading than economists’ were expecting led by declines in the prices of oil, coal and other fuel industries due to insufficient domestic demand and a drag from the country’s real estate sector.

What to watch today:

• The local market started the new trading week in negative territory with a fall of 0.32% as investor sentiment was dampened by jobs data out in the US on Friday signalling a weakening labour environment in the world’s largest economy.
• The big banks and energy stocks led the losses on Monday while rate sensitive real estate and tech stocks rallied to offset some of the heavy losses.
• Domino’s Pizza (ASX:DMP) shares fell over 2.5% on Monday after the pizza giant was served with a class action from shareholders on allegations the company misled investors in 2021 about expected performance in Japan. Domino’s has said it will defend against the legal proceedings and denies any liability.
• Looking at commodities, oil is trading 1.5% higher at US$68.68/barrel, gold is up 0.66% at US$2503/ounce and iron ore is up 0.34% at US$91.61/tonne.
• The Aussie dollar has slightly weakened overnight to buy 66.68 US cents, 95.17 Japanese Yen, 50.87 British Pence and 1 New Zealand dollar and 8 cents.
• Ahead of Tuesday’s training session the SPI futures are anticipating the ASX to open the day up just shy of 1% following the rally on Wall St on Monday.
• We will likely see investors react to Westpac’s consumer confidence data for September out this morning with the forecast of a 1.2% decline from a 2.8% rise in August, while NAB business confidence data for August is also out today with the forecast of a rise to 3 points from 1 point in July.

Trading Ideas:

• Bell Potter has increased the 12-month price target on Premier Investments (ASX:PMV) from $35 to $37 and maintain a buy rating on the leading retail investment company following the release an update out of the company including FY24 post-AASB-16 (lease related payments guide) EBIT of $341m. The increase in the price target is due to Bell Potter’s analyst seeing upside to the company’s share price from the potential demerger of PMV’s two-key brands, Smiggle and Peter Alexander which are highly profitable and global roll out worthy.
• Trading Central has identified a bearish signal on Orora (ASX:ORA) following the formation of a pattern over a period of 22-days which is roughly the same amount of time the share price m