Market wraps 21st July 2020

Morning Bell - Jessica Amir

The Aussie share market is eyeing a 0.7% lift at the open, following a positive night in the U.S. on hopes of further economic stimulus there.

Across the ocean, UK’s Oxford University with AstraZeneca reported a strong immune response in a large early-stage human trial, according to medical journal The Lancet.

What to watch today:

  • The RBA Governor will give a speech later today and the RBA minutes will be released.
  • The Government is expected to announce that JobKeeper and JobSeeker payments have been extended for another six months, but both payments will be reduced as the Government has found they could act as disincentives to work as the economy recovery. This is on top of the new $2 billion job package that was announced to help the unemployed and school-leavers. So stay tuned to the Prime Minister and Treasurer’s announcements.
  • Quarterly results today are due out for BHP (ASX:BHP) and Oil Search (ASX:OSH).

Local trading ideas:

  • Following South32’s (ASX:S32) quarterly results being handed down, UBS reiterated the stock as a buy with a with a $2.60 target following yesterday’s close of 2.3% lower at $2.17. South32 ended FY20 better than expected, with yearly production records set by Brazil Alumina, Hillside Aluminium and Australian Manganese.
  • Fleet leasing business Eclipx Group (ASX:ECX) had a cracking day on the ASX yesterday up 7.3% to $1.40 after announcing the sale of Right to Drive for up $26.5 million, to be completed on 17 August 2020. UBS reaffirms Eclipx Group as a key buy with a $1.45 target, with upside to earnings.
  • Bell Potter upgraded Catapult Group (ASX:CAT), a wearable software athlete tracker company, with a $1.50 target. Yesterday it closed 11.4% higher at $1.42 after delivering FY20 earnings stronger than expected, also generating free cashflow of $9 million which was well ahead of the estimated $100,000.