Market wraps 28th May 2024

Morning Bell - Grady Wulff

The US Market is closed overnight for the Memorial Day holiday and will resume trading on Tuesday US time; however, it is expected the rally will continue from last week as investors shrugged off inflation concerns on Friday in favour of market optimism from Nvidia’s latest stellar results indicating earnings inflation over the next quarter. The futures market is trading higher across the key indices on Monday.

Over in Europe on Monday, it was a quiet day for markets as the UK market was also closed for the late May bank holiday. Elsewhere in Europe, markets closed slightly higher to start the new trading week as investors continue searching for clues as to when the European Central Bank may cut interest rates. The STOXX600 rose 0.28%, while Germany’s DAX and the French CAC each added 0.4% on Monday.

The Asia markets also closed higher on Monday to start a data-heavy trading week in positive territory. China’s industrial profits rose 4.3% year-on-year from January to April which boosted markets on Monday in a sign the world’s second largest economy is making small yet material steps in the right economic recovery direction. China’s CSI index rose 0.95% on the back of this data release, while Hong Kong’s Hang Seng rallied 1.2% and South Korea’s Kospi Index climbed 1.32%.

The local market started the week in positive territory closing Monday’s session up 0.8%, overcoming last week’s inflation-driven sell-off, led by the real estate stocks rising 1.6% and telecoms stocks rallying 1.3%. The sell-off last week was driven by hotter-than-expected inflation driver data released in the US which pushed back investor hopes of rate cuts. Energy stocks came under pressure on Monday as the price of oil dipped to a near three-month low amid demand concerns out of the world’s largest oil demand market, the US.

Neuren Pharmaceuticals soared over 15% yesterday after the company resumed trading following a halt on the release of Phase 2 trial results showing significant improvement in Pitt Hopkins syndrome including key aspects of communication, social interaction, cognition, and motor abilities.

Lendlease was another stand out on the local bourse yesterday rising almost 10% after the company revealed a strategic review to its global strategy, while online luxury fashion platform Cettire also soared over 10% after ‘categorically rejecting’ allegations that customers purchased counterfeit products from its site.

What to watch today:

  • Ahead of Tuesday’s trading session here in Australia, the SPI futures are expecting the ASX to open the day up 0.2% or 16 points to extend the rally of this week into another trading day.
  • On the commodities front this morning oil is trading 1.08% higher at US$78.56/barrel, gold is up 0.84% at US$2353.01/ounce, and iron ore is up 0.11% at US$117.66/tonne.
  • 1 Aussie dollar is buying 67 US cents, 104.40 Japanese Yen, 52.09 British Pence and 1 New Zealand dollar and 8 cents.

Trading Ideas:

  • Bell Potter has maintained a buy rating on Neuren Pharmaceuticals (ASX:NEU) and has raised the 12-month price target from $26.50 to $28.00 on the neuro-developmental targeted pharmaceuticals developer following the release of the company’s Phase 2 trials results showing a second positive read out for its drug candidate NNZ-2591 in Pitt Hopkins Syndrome. Bell Potter sees the value in the company’s second drug candidate represents a similar, if not larger market opportunity than Rett Syndrome which Neuren’s Daybue drug is on the market treating at present.
  • Trading Central has identified a bearish signal on Hub24 (ASX:HUB) following the formation of a pattern over a period of 17-days which is roughly the same amount of time the share price may fall from the close of $41.53 to the range of $38.10 to $38.80 according to standard principles of technical analysis.