Market wraps 30th August 2021

Morning Bell - Jessica Amir

US stocks rebounded on Friday to new record highs. Tech stocks were higher as the market prepares for the Federal Reserve Chair Jerome Powell to pull back on monetary stimulus.

The oil price, the proxy for economic growth, formed a 6 day uptrend. The oil price posted its biggest weekly rally in a year, with oil bracing for restricted supply ahead of Hurricane Ida.

This morning, the Aussie share market will likely follow US stocks higher. The futures are suggesting a lift of 0.2%, with all eyes on tech, iron ore, and company results.

What to watch today:

  • The iron ore price is steady after falling below US$160 for the first time since February.
  • The copper price rose 1.7%, which supported New York listed BHP rising 2.7% and Rio Tinto rising 2.6%. Expect the Aussie listed BHP, RIO, and other iron ore and copper stocks to lift today.
  • The gold price is holding steady, after rising slightly above US$1800, lifting 0.1% ahead of the Fed unveiling its tapering timeline.
  • Company earnings today:
    • Fortescue Metals (ASX:FMG) is set to report record profit of US$10.3 billion. However, future growth is expected to dim, as the iron ore price is down over 20% from its high and steel demand remains restricted in China.
    • Orocobre (ASX:ORE) is also due to report today after merging with Galaxy Resources, to create the world’s 5th biggest lithium company.
    • Bubs Australia (ASX:BUB), Healius (ASX:HLS) and Australia Finance Group (ASX:AFG) are also set to report today.
  • Oil Search (ASX:OSH) and Woodside Petroleum (ASX:WPL) go ex- dividend today.
  • The most traded stocks by Bell Direct clients last Friday: Brickworks (ASX:BKW)’s share fell 2.8% last week after construction work fell more than expected. And Fortescue Metals (ASX:FMG)’s shares continued to fall for the 6th week, as demand for steel contracts. FMG shares fell about 2% last week ahead of reporting results to the market today.

Trading Ideas:

  • Eagers Automotive (ASX:APE) was reiterated as a Bell Potter BUY, with a price target of $18.75, implying 16% share price growth in a year.
  • Citi flagged Wesfarmers (ASX:WES) as a SELL, following its earnings results, and Citi expects WES shares to fall to $47.00 in 12 months.
  • Fertoz (ASX:FTZ), Clearview Technologies (ASX:CPV), and Stavely Minerals (ASX:SVY) are all giving off bullish charting signals, according to Trading Central.