Morning Bell 12 August

Between the Bells

Wall Street continued its recovery-rally on Friday to close higher across the three key averages as weaker-than-expected initial jobless claims data out on Thursday boosted investor hopes that the U.S. will avoid recession in favour of a soft landing. The Dow jones rose 0.13% on Friday, the S&P500 added 0.47% and the tech-heavy Nasdaq ended the day up 0.51%.

Over in Europe, markets closed higher in the region taking lead from the global market recovery from Monday’s sharp sell-off. The STOXX 600 rose 0.57% on Friday, Germany’s DAX added 0.24%, the French CAC rallied 0.31%, and, in the UK, the FTSE100 ended the day up 0.28%.

Across the Asia markets on Friday the global sea of green extended across Asia’s markets as investors assessed China’s CPI and PPI data and bought back into stocks broadly after the early week mass sell-off. Japan’s Nikkei added 0.56% on Friday, China’s CSI index slid 0.34%, and Hong Kong’s Hang Seng rallied 1.17%.

China’s CPI came in at a rise of 0.5% which well exceeded economists’ forecasts of a 0.3% rise indicating the highest reading since February indicating improved domestic demand in the world’s second largest economy.

While the inflation reading rising is a positive sign, it is just one move in the right direction, and much more is needed to be done to see a proper correction in the economic health of China. This week we also had Chinese trade balance data out that indicated imports exceeded exports which depleted the trade surplus in the country more than economists’ were expecting, and PPI data out on Friday that fell 0.8% from a year ago, indicating a mixed recovery picture in the region.

What to watch today:

• Locally on Friday the ASX200 ended the day in positive territory, with a modest gain of 1.25%, led by the tech sector rising over 3%, driven by Life360 soaring 18% after upgrading full year revenue guidance and announced global expansion plans.
• QBE Insurance fell almost 2% on Friday following the release of the company’s FY24 results. Despite the company posting a strong gain in earnings, investors were more focused on the small miss in net profit and guidance than analysts’ were expecting.
• On the commodities front this morning, oil is trading 0.15% higher at US$76.98/barrel, gold is down just a slight 0.09% at US$2428/ounce and iron ore is up 0.51% at US$101.26/tonne.
• The Aussie dollar has strengthened over the weekend, with 1 Aussie dollar is buying 65.7 US cents, 96.55 Japanese Yen, 51.34 British Pence and 1 New Zealand dollar and 10 cents.
• Ahead of Monday’s trading session on the ASX the SPI futures are anticipating the market to open the day up 0.76%.

Trading Ideas:

• Bell Potter has increased the 12-month price target on Life360 (ASX:360) from $19/share to $20.50/share and maintain a buy rating on the location tracking software company following the release of the company’s 2Q24 trading update outlining a beat on revenue expectation, a beat in total paying circles and the company upgraded its guidance for both revenue and EBITDA for FY24.
• Trading Central has identified a bullish signal on SRG Global (ASX:SRG) following the formation of a pattern over a period of 74-days which is roughly the same amount of time the share price may rise from the close of $0.88 to the range of $1.01 to $1.03 according to standard principles of technical analysis.