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Market wraps 22nd October 2020

Morning Bell - Jessica Amir

The futures are suggesting the ASX200 will fall 1.1% following Wall Street’s close in the red and comes despite NSW restrictions being eased from tomorrow, with restaurants, cafes, pubs and clubs able to take group bookings of up to 30 people per group.

U.S. investors lost patience that a fresh U.S. stimulus package would eventuate before the election in almost 11 days. But it’s important to note, regardless of who wins the presidential race, more stimulus will come from either party to bring their economy back to life. Netflix reported less subscribers than expected, which saw its shares lose about 7%. Meanwhile, Snap shares soared 28% to an all-time high on a smashing quarterly report.

On the Commodity front: Oil fell 4% US$40.01 with Libya ramping up production, while U.S. inventory figures showed gas demand weakened. So that could hurt oil stocks today. While Gold made its first notable move in days, rising 1% to US$1,927. 

What to watch today:

  • Quarterly results from AMP (ASX:AMP), Qantas (ASX:QAN), Mirvac (ASX:MGR) and OZ Minerals (ASX:OZL).
  • AGMs today: Suncorp (ASX:SUN), Webjet (ASX:WEB), Magellan (ASX:MFG) and Crown (ASX:CWN).
  • RBA’s Deputy Governor, Guy Debelle will take part in a Fireside Chat – on the Future of the FX Global Code – at FX Week Australia 2020

Trading ideas:

  • Bell Potter upgraded Praemium’s (ASX:PPS) Buy rating, increasing its price target to $0.85, implying 41% upside. Praemium’s quarterly results were much stronger than expected supported by its Powerwrap acquisition.
  • Bell Potter also upgraded MyState’s (ASX:MYS) Buy rating, increasing its price target to $4.50 implying 15% upside on MYS’ net interest margin. Bell Potter expects cash and NPAT growth to continue in FY22 and beyond.
  • UBS upgraded Megaport (ASX:MP1) from a neutral to a Buy with a new $16.45 price target. UBS sees more strength in the second half of this financial year, with growth from North American after its customers rose 63%.
  • Red 5 (ASX:RED), Bigtincan Holdings (ASX:BTH) and Galaxy Resources (ASX:GXY) are all showing bullish charting signals - according to Trading Central.