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16th September 2022

Morning Bell - Sophia Mavridis

Our local market closed with a 0.2% gain yesterday, with energy and financials advancing the most.

On the prospect of the first strike by American railroad workers in 30 years, ASX coal producer’s rallied, lifting the energy sector higher. Coal stocks were the best performers, including Coronado Global Resources (ASX:CRN), New Hope Corporation (ASX:NHC) and Whitehaven Coal (ASX:WHC). Meanwhile, Lake Resources (ASX:LKE) dropped more than 12% yesterday.

The most traded stocks by Bell Direct clients were Whitehaven Coal (ASX:WHC), Pilbara Minerals (ASX:PLS) and the BetaShares US Dollar ETF (ASX:USD).

Wall Street extended losses overnight. The Dow Jones closed 0.6% lower and the S&P500 dropped 1.1%, with nine of the eleven industry sectors in the red. The Nasdaq was the worst performer as tech shares declined, down 1.4%.

What to watch today:

  • The local market is expected to slide this morning. The SPI futures are suggesting a fall of 0.73%.
  • In economic data, yesterday the unemployment rate for August was released. It increased to 3.5%.
  • In commodities:
    • Oil has pulled back, trading more than 4% lower, after the US Department of Energy said that its plan of refilling the country’s strategic oil reserves, does not include a trigger price. This announcement has backtracked previous reports that the US would restock the emergency reserves, should prices fall below US$80, removing the potential price floor for oil.
    • Gold has dropped to levels last seen in April 2020, due to an increasingly strong US dollar.
    • Iron ore has pulled back, trading down 2.5%.

Trading Ideas:

  • Bell Potter maintain a Buy rating on Select Harvests (ASX:SHV) with a price target of $6.90. At the stock’s current share price of $5.65, this implies 24.1% share price growth in a year.
  • Trading Central has identified a bullish signal in Coronado Global Resources (ASX:CRN), indicating that the stock price may rise from the close of $1.85, to the range of $2.17 to $2.27, over 31 days, according to the standard principles of technical analysis.