14th February 2024

Morning Bell - Sam Kanaan

Wall St closed lower overnight following the release of hotter-than-expected inflation data for January. The Dow Jones fell 1.35%, the S&P 500 lost 1.37% and the tech-heavy Nasdaq ended the day 1.8% in the red.

The consumer price index rose 0.3% in January from December and increased 3.1% on an annual basis, which was above the 0.2% month-on-month and 2.9% annual rate that economists were expecting.

Over in Europe, markets closed lower in the region following the release of some key corporate earnings results and hotter-than-expected inflation reading out of the US. The STOXX600 fell 1% on Tuesday, Germany’s DAX lost 0.92%, the French CAC closed 0.84% lower and, in the UK, the FTSE100 shed 0.81%.

The local market closed Tuesday’s session 0.15% lower, extending on Monday’s losses as the healthcare sector again weighed on the key index, while utilities, financials and discretionary stocks closed the day in the green. The market losses were slightly offset by investor sentiment rising after Westpac consumer confidence data for February came in at a rise of 6.2%, up from a 1.3% decline in January and well above what economists were expecting of a further 0.8% decline. NAB business confidence data also came in at a rise of 1 point which was in line with economists’ expectations.

What to watch today:

  • The Australian share market is set to open lower, with the SPI futures suggesting a fall of 1.64% at the open this morning.
  • On the commodities front this morning,
    • Oil is trading over 1% higher at US$77.74 cents a barrel as tensions in the middle east help support oil prices.
    • Gold is trading down 1.3% to US$1993.60 cents an ounce following stronger-than-expected inflation data coming out of the US.
    • And iron ore is trading flat at US$128 a tonne.

Trading Ideas:

  • Bell Potter has initiated coverage on MMA Offshore (ASX:MRM) and has recommended a buy with a 12-month price target of $2.55. MMA Offshore is an Australian-marine services business, which delivers vessel, subsea and project logistics expertise to a range of global customers. The buy rating is recommended as the offshore services market is in the midst of a boom cycle following a protracted downturn by the oil price crash in 2014 and the subsequent fall in demand.
  • And Bell Potter maintains a buy rating on HealthCo. H&W REIT (ASX:HCW) despite lowering its 12-month price target to $1.70. The buy rating is maintained as HCW appears to be one of the better relative value propositions amongst the REITs sector with it being the only REIT to recognise value uplift at the half.