Desktop Broker TV

Market wraps 23rd February 2023

Morning Bell - Grady Wulff

Wall St closed mixed on Wednesday following the release of the Federal Reserve’s latest meeting minutes from earlier this month. The minutes outlined most Federal Reserve policymakers were in favour of slowing the pace of rate hikes in a bid to assess the economy’s progress, however policymakers also agreed unanimously that ongoing increases in the nation’s cash rate would be appropriate. This caused a mixed reaction across Wall St, and enhances fears of a global recession as the cost of living continues to rise.

The Dow Jones ended the midweek session down 0.26% and the S&P500 lost 0.16%, but the Nasdaq rose 0.13%.

Earlier on Wednesday, European stocks closed lower again on Thursday as investors awaited the release of the US Fed’s meeting minutes to gauge insight into whether the Fed will remain hawkish on its stance to tackle inflation. Investors in the region also sold out of markets across Europe also on the back of downbeat earnings reports including British bank Lloyds reporting flat profit growth on the prior year. The STOXX600 fell 0.3%, Germany’s DAX closed flat, the French CAC fell 0.13% and, in the UK, the FTSE100 shed 0.59%.

Taking a look at commodities, iron ore is again the only key commodity trading higher this morning, up 2.31% at US$133/tonne, while oil is down 3.4% at US$73.76/barrel and gold is down almost half a percent at US$1825/ounce.

What to watch today:

  • Ahead of the local trading session, the SPI futures are anticipating the ASX to open 0.3% lower, extending on yesterday’s losses and on the back of the continued global sell-off overnight.
  • Australian wages and construction data out yesterday add further support for the RBA to continue its steady rate hike path as opposed to considering any 50-bps hikes in future. Wages growth in Q4 showed growth of just 0.8% for the quarter, which was lower than expectations of 1%, while construction work done in the fourth quarter fell by 0.4% which was well below consensus expectations of a 1.5% increase.
  • Stocks trading ex-dividend today include Codan (ASX:CDA), Whitehaven Coal (ASX:WHC), IRESS (ASX:IRE) and JB Hi-Fi Group (ASX:JBH). If you’ve been thinking about these stocks, it might be worth considering buying in today as stocks trading ex-dividend generally trade lower on the ex-dividend date.

Trading Ideas: 

  • Bell Potter has downgraded its price target on Clean Seas Seafood (ASX:CSS) from $0.85 to $0.75 cents per share, but maintain a speculative buy rating on the company following the release of the company’s first half results which were weaker than expected including revenue down 22% YoY and higher feed costs, up 20% YoY. Production costs are also likely to run above previous targets for the near term however for the most part are mitigated by higher average selling prices.
  • Trading Central has identified a bullish signal on Xtek (ASX:XTE) following the formation of a pattern over a period of 21-days which is roughly the same amount of time the share price may rise from 73 cents to the range of 83 cents to 85 cents according to standard principles of technical analysis.