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Market wraps 20th June 2022

Morning Bell - Sophia Mavridis

It was the worst week for the Australian market since the beginning of the pandemic in 2020. Week-to-date the ASX200 is down 6.6%, led by losses on Wall Street on concerns around aggressive policy tightening.

On Friday, the ASX200 closed 1.8% lower, with materials, tech, financials and energy down the most.

Taking a closer look at the leaderboard, the worst performing stock was G.U.D Holdings (ASX:GUD). The company is a designer, manufacturer and distributor of automatic products and its share price crashed 20% on Friday, following a guidance update, where the company downgraded its guidance due to supply chain disruptions. And some big tech names were finally in the green, including EML Payments (ASX:EML) and Zip Co (ASX:ZIP), regaining some of those prior losses.

The most traded stocks by Bell Direct clients on Friday were CSL (ASX:CSL), Macquarie Group (ASX:MQG), Lake Resources (ASX:LKE), Westpac (ASX:WBC) and BHP Group (ASX:BHP).

On Wall Street, the major benchmarks closed mixed. The Dow Jones slipped 38 points or 0.13%. The S&P500 rose slightly higher, up 0.2%, however still had its worst week since 2020, down 5.8% for the week, with all 11 sectors finishing more than 15% below their recent highs. Meanwhile, the tech-heavy Nasdaq gained 1.4%.

What to watch today:

  • The Australian market is set to drop 0.3% at the open this morning, going by the SPI futures.
  • What may add to the decline in global markets is the collapse of cryptocurrencies. Bitcoin tumbled 15% over the weekend, its lowest level in 18 months.
  • In commodities, the price of oil has crashed 6.8%, pressured by the recent wave of aggressive rate hikes. Gold is also trading lower amid a rebound in the US dollar and Treasury yields. And iron ore has dropped to an over three-week low as COVID-19 outbreaks in China provoked fears of lockdowns. China is the world’s top steel producer.
  • Premier Investments Limited (ASX:PMV) is set to go ex-dividend.

Trading Ideas:

  • Bell Potter have a Speculative Buy rating on Lumos Diagnostics (ASX:LDX) and have reduced their valuation to $0.28 from $0.75. At its current share price of $0.14, this implies 95.5% share price growth in a year.
  • Trading Central have identified a bullish signal in Capricorn Metals (ASX:CMM), indicating that the stock price may rise from the close of $3.80 to the range of $5 to $5.30 over 43 days, according to the standard principles of technical analysis.