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Market wraps 15th July 2024

Morning Bell 15 July

Wall Street re-entered record territory on Friday after a slight pullback on Thursday following the release of positive inflation data earlier in the week and as investors looked outside of the AI rally to capitalise on attractive investment opportunities across the broader market. The Dow Jones rose 0.62% to top 40,000 for the first time ever, while the S&P500 and Nasdaq rose 0.55% and 0.63% respectively. The banks fell on Friday despite posting stronger results than expected with JPMorgan shares sliding 1.2% despite topping Q2 revenue expectations and Citi fell 1.8% also despite beating on the top and bottom lines in Q2.

Over in Europe, markets closed higher across the region on Friday with the STOXX 600 rising 0.97% driven by telecom stocks after strong second quarter results boosted stocks in the sector. Germany’s DAX rose 1.15% on Friday, the French CAC added 1.27% and, in the UK, the FTSE100 ended the day up 0.36%.

Across the Asia markets on Friday, it was a mixed finish to the week across the region with Japan’s Nikkei falling over 2% after hitting record highs in the previous sessions. Hong Kong’s Hang Seng rose 2.6%, South Korea’s Kospi index fell 1.18%, and China’s CSI index rose 0.12% after Chinese exports beat expectations with a rise of 8.6% YoY in June indicating further recovery in the region post-pandemic.

Locally on Friday the ASX200 rose 0.88% to a record close with every sector aside from the tech sector ending the day higher, led by real estate stocks jumping almost 2%. The price of gold topped US$2400 late last week which boosted local gold miners including Bellevue Gold (ASX:BGL) rising 1.5%, Spartan Resources (ASX:SPR) soaring over 7% and Gold Road Resources (ASX:GOR) jumped 2.3%. The easing inflation data out of the US was the key driver of the gold price rally as markets are now pricing in a rate cut out of the Fed by September. The local big banks rallied on Friday with Commonwealth Bank (ASX:CBA) closing the day at a record $131.60 taking its market cap to $221bn, making it the largest company on the ASX.

What to watch today:

  • Ahead of the first trading session of the new trading week the SPI futures are anticipating the ASX to open the day up 0.64% on the back of Wall Street’s strength on Friday.
  • On the commodities front this morning oil is trading 0.15% higher at 82.34 per barrel, gold is down 0.16% at US$2,407 an ounce and iron ore is flat at US$109.58 per tonne.
  • The Aussie dollar has strengthened again to buy 68 US cents, 107.14 Japanese Yen, 53.04 British Pence and 1 New Zealand dollar and 11 cents.

Trading Ideas:

  • Bell Potter has increased the 12-month price target on Coventry Group (ASX:CYG) from $1.80 to $2.00 and maintain a buy rating on the industrial supplies and services group following the release of a strong trading update out of the company for Q4 including group sales growth of 4% and the outlook for FY24 EBITDA of 22% growth on FY23.
  • Trading Central has identified a bullish signal on IGO Ltd (ASX:IGO) following the formation of a pattern over a period of 16-days which is roughly the same amount of time the share price may rise from the close of $6.07 to the range of $6.47 to $6.57 according to standard principles of technical analysis.