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Market wraps 30th September 2020

Morning Bell - Jessica Amir

The Aussie share market is eyeing a fall of 0.9% or 56 points ahead of the first of three Trump vs. Biden debates.

U.S. stocks fell to their lows for the day after the New York City Mayor said NY’s daily COVID-19 cases are back above 3%, for the first time in months. That spooked airline investors, and airliners led the decline, with American Airlines, United and JetBlue falling about 4%.

U.S. consumer confidence surged to its highest level since the start of the pandemic, with confidence levels seeing their biggest rebound in 17 years. This reflects that Americans are optimistic about the U.S. recovery being on track.

What to watch today?

  • Options expiry- fund managers and investors are unwinding their positions, which will add to the volatility today.
  • It should be a positive day for gold stocks, after the gold price lifted over 1% for the second day, to US$1,903, with COVID-19 cases rising in Europe
  • Oil stocks may come under pressure as the oil price fell 3.7%, back to under US$40.
  • What else to watch: ASX (ASX:ASX) holds its AGM today, Freedom Foods (ASX:FNP) is due to hand down results and this evening in the U.S., GDP growth is released with the market expecting second quarter growth to fall 31.7%, following the 5% fall in Q1.

Trading ideas:

  • Corporate Travel Management (ASX:CTD) was upgraded as a Buy by UBS with a new $18.70 price target. UBS thinks CTD has been one of the best performing travel stocks.
  • Australian Finance Group (ASX:AFG) was initiated as a Buy by Citi with a $3 price target. AFG control about 40% of the mortgage broking industry, and a cyclical recovery looks to be on the cards, given the reregulation of the industry.
  • Accent (ASX:AX1), Macmahon Holdings (ASX:MAH) and American Pacific Borates (ASX:ABR) -  all showing bullish charting signals - according to Trading Central. Of those AX1’s fundamental calls almost mirror Trading Central’s technical analysis, meaning its shares could rally to $1.95 - 2.01 over the next 25 days. Bell Potter targets $1.85. Morgans targets $1.84.