Market wraps 26th February 2024

Morning Bell - Grady Wulff

Wall Street ended Friday’s session with a record close across the Dow Jones and S&P500 however the tech-heavy Nasdaq fell 0.28%. For the week, the Dow Jones added 1.3%, the S&P500 rallied 1.66% and the Nasdaq rose 1.4%.

On the corporate earnings front, Afterpay parent company Block surged 16% after releasing fourth-quarter results that topped Wall Street estimates. Used car retailer Carvana also soared 32% after announcing it expects retail units to grow for the remainder of 2024.

While the tech juggernaut rally continues on the back of Nvidia’s stellar results released on Thursday, some brokers and industry experts believe there is still room for growth for the big tech stocks over the months ahead.

Over in Europe, markets in the region closed higher on Friday as corporate earnings boosted investor sentiment against the release of some unfavourable economic data. The STOXX600 rose 0.4% on Friday, Germany’s DAX added 0.28%, the French CAC climbed 0.7%, and, in the UK, the FTSE100 rallied 0.28%. Germany’s economy contracted 0.3% in the fourth quarter indicating the deepening of Germany’s economic woes as the country still battles with high inflation. In the UK, consumer confidence dipped in February as high inflation weighs on consumer optimism of an economic rebound in the near future.

Across the Asia markets on Friday, it was a mostly green finish with China stocks rising for a 9th straight session. Fresh property price data in China showed declines in property prices in the region are easing which boosted sentiment for a recovery in China’s struggling property market.

Locally on Friday, the ASX200 rose 0.4% as the tech sector boosted the market with a 1.5% rally on the back of Nvidia’s results and strong growth projections for technology companies for the remainder of 2024.

Aussie Broadband shares soared over 18% on Friday after the internet provider beat forecasts in the first half, while Jumbo Interactive shares rallied 9% after also beating expectations for the first half.

What to watch today:

  • Ahead of the local trading session the SPI futures are expecting the ASX to open Monday’s session 0.05% higher, extending the rally of last week into Monday.
  • On the commodities front this morning, oil is trading 2.7% lower at US$76.49/barrel, gold is up 0.55% at US$2035/ounce, and iron ore is trading flat at US$122.50/tonne.
  • AU$1.00 is buying US$0.66, 98.79 Japanese Yen, 51.70 British Pence and NZ$1.06.
  • The local reporting season continues today with Adairs, Endeavour Group, Kogan.com, Nanosonics, TGP Telecom and Suncorp Group will release results.

Trading Ideas:

  • Bell Potter has maintained a buy rating on Accent Group (ASX:AX1) and raised the 12-month price target from $2.35 to $2.50 following the release of the leading fashion retailers’ first half results including beating Bell Potter expectations in gross margins, inventory, net debt and dividends. The first 7 weeks of the second half of FY24 has also started trading on an encouraging note.
  • And staying with the retailers, Bell Potter has maintained a buy rating on leading fashion jewellery retailer Lovisa (ASX:LOV) and significantly raised the 12-month price target on the company from $26.50 to $30.70 following the release of the company’s first half results including key beats of expectations for strong gross margins and interim dividend. The second half, like Accent Group, has started on a positive note and the analyst believes the new store run-rate will ramp up into the remainder of the second half.