Market wraps 25th June 2024

Morning Bell - Grady Wulff

Wall Street started the new trading week mixed as investors sold out of big tech stocks in favour of the banks and energy stocks. The Dow Jones rose 0.6% on Monday while the S&P500 and Nasdaq posted declines of 0.31% and 1.09% respectively. The pullback in tech stocks is ahead of the U.S. PCE data released later this week which is the Fed’s preferred measure of inflation and is expected to be a 0.1% rise on April which would indicate a decline from April’s 0.2% rise and signal inflation is easing. With some key inflation drivers remaining sticky though, investors have been bracing for higher interest rates for longer.

Over in Europe markets closed higher on Monday ahead of key inflation data and central bank decisions out in the region this week. The STOXX600 rose 0.8% on Monday, Germany’s DAX added 0.89%, the French CAC climbed 1.03% and, in the UK, the FTSE100 ended the day up 0.53%.

Asia markets mostly slipped on Monday as investors in the APAC region brace for key inflation data out later this week in Japan and Australia. Hong Kong’s Hang Seng fell 0.88% on Monday while China’s CSI index fell 0.54% yesterday.

What to watch today:

  • The local share market started the new trading week 0.8% lower following the release of some disappointing company updates and ahead of the release of Australia’s inflation print. Energy stocks took the biggest hit to start the new trading week as the sector closed the day down 1.76% while healthcare was hit with a 1.63% decline on Monday.
  • Sleep apnoea specialist ResMed (ASX:RMD) tumbled 13.2% on Monday on fresh results of a weight loss drug-trial spooked the market about the relevance of ResMed’s devices once again, while online fashion luxury retail platform Cettire (ASX:CTT) tanked 49% after the company said its Q4 trading had been hit by a lull in online luxury spend.
  • Elsewhere in fashion, Myer (ASX:MYR) shares jumped 22% on Monday after the department store giant announced it is looking into a potential merger with Premier Investments’ apparel business which includes Just Jeans.
  • Embattled casino operator Star Entertainment (ASX:SGR) fell a further 5.7% yesterday after the company issued a profit warning and noted that former Chairman, David Foster, has left the board.
  • Local iron ore miners also felt the brunt of investor demand concerns with a decline on Monday, tracking the price of the commodity amid fears of prolonged subdued demand out of China.
  • Ahead of Tuesday’s trading session the SPI futures are anticipating the ASX to open the day up 0.47%.
  • On the commodities front this morning oil is trading 1.17% higher at US$81.68/barrel, gold is up 0.5% at US$2333/ounce and iron ore is down 0.18% at US$106.96/tonne.
  • 1 Aussie dollar is buying 67 US cents, 106.26 Japanese Yen, 52.87 British Pence and 1 New Zealand dollar and 9 cents.

Trading Ideas:

  • Bell Potter has downgraded City Chic (ASX:CCX) from a buy to a hold and have significantly reduced the 12-month price target on the plus size fashion retailer from 62cps to 20cps following the announcement of the company divesting its US business and the company undertaking a capital raising with proceeds aiming to pay down debt.
  • Trading Central has identified a bullish signal on Jupiter Mines (ASX:JMS) following the formation of a pattern over a period of 30 days which is roughly the same amount of time the share price may rise from the close of $0.32 to the range of $0.42 to $0.44 according to standard principles of technical analysis.