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Market wraps 1st August 2023

Morning Bell - Sam Kanaan

Wall St ended a strong month with a rise in stocks on Monday ahead of a busy earnings week. The Dow Jones finished the trading day up 0.28%, the S&P 500 rose 0.15% and the tech heavy Nasdaq added 0.21%.

The S&P 500 had 5 months of consecutive growth for the first time since August 2021, finishing the month up 3.1%. The Dow made a 13-day advance during July, it’s longest streak of gains going back to 1987.

In recent weeks, investors have been growing more optimistic about a soft landing in the US on the back of favorable economic data and resilience in both the job market and on a GDP front. Earnings season has also proven to show better than expected results thus far.

Thursday is looking to be a big day of earnings season news with both Amazon and Apple’s set to release results, which could “set the tone” for the remainder of the month.

What to watch today:

  • The Australian share market is set to open higher, with the SPI futures suggesting a 0.34% rise at the open this morning.
  • In terms of economic data, the RBA interest rate decision will be announced at 2:30pm today with a consensus of 4.35% or 25 basis points, up from the previous 4.1%.
  • Looking now at commodities,
    • Crude oil has jumped 1.43%, trading at US$81.74 a barrel after a tightening global supply and an increased demand increasing prices.
    • The price of gold is slightly higher, up 0.31% trading at US$1,965.34 an ounce.
    • And iron ore has finished the day 0.87% lower as the idea of Chinese economy stabilization slows.
  • AU$1.00 is buying US$0.68, 95.58 Japanese Yen, 51.63 British Pence and NZ$1.09.

Trading Ideas:

  • Bell Potter has slightly decreased the price target on AMA Group (ASX:AMA) from 28 cents per share to 26 cents per share and maintain a buy rating on Australia’s largest accident repair group following the release of the company’s fourth quarter update including underlying cashflows continuing to improve and closing cash up $8.4m to $28.9m as at 30th June. The reason for the 12-month price target decrease is due to increased uncertainty around the company’s capital SMART repricing.
  • And trading central has identified a bullish signal on Infratil Ltd (ASX:IFT), following the formation of a pattern over a period of 15-days which is roughly the same amount of time the share price may rise from the close of $9.36 to the range of $9.70-$9.85 according to the standard principles of technical analysis.