BPO TV

We’re set for a rocky start to the week following the extreme developments out of the Middle East we saw over the weekend, with US airstrikes on Iran and Iran’s responsive strikes on Israel and the US Middle East bases. 

We’re expected to see a lot of market movement and activity when markets open today. Looking at Friday’s close in the US, the Dow Jones closed 1.1%, the S&P500 down 0.4%, and the Nasdaq closed 0.4% lower. 

The 10-year yield fell below 4% for the first time since November and the US 10- year and 2-year Treasury yields each dropped 6 points to 3.95% and 3.38% respectively.

What to watch today:

• Looking at the day ahead, the SPI futures are suggesting that the Australian market will drop 0.2% at the open this morning. 
• We’ll be closely watching the market’s reactions to the US-Iran conflict, however there may be some commodities and sectors that could benefit, including gold, oil and defense stocks. 
• Looking at commodities, 
  • Crude oil has jumped 2.8% to US$67.00 per barrel. 
  • Gold is up 1.8% to US$5,278.00. Gold has been rallying in the last few weeks and is expected to advance when trading resumes. Before the weekend, Gold prices rose to a one-month high and a seventh straight month of gains, due to geopolitical tensions ahead of the weekend strikes 
  • While iron ore is trading flat. 
  • Copper futures reached a four-week high on Friday which was also the seventh consecutive month of gains. The price is up 0.97% to US$6.00 per pound. 
• As for foreign exchange, the Australian dollar is down 12c to US$71.13 and we may see some pressure on currencies today. 

And as our local reporting season draws to a close, February marked a third straight monthly gain and finished 3.7% higher. We saw 335 companies release their financial results, with 119 beating expectations, 109 in line with expectations and 107 missing market expectations. With much stock specific news driving market movements, two of Bell Potter’s most relent recommendations include gold producer Catalyst Metals (ASX:CYL) and developer Summerset Group (ASX:SUM). 

• Bell Potter have maintained their Buy rating on Catalyst Metals (ASX:CYL) and their 12-month price target at $14.60. At the current price of $8.51, implying 72% share price growth in a year. 
• And they have lowered their 12-month target on Summerset Group (ASX:SNZ) to  NZ$14.40, while their Buy rating remains unchanged. The current share price if NZ$10.66, implying 35% share price growth in a year.