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Market wraps 6th December 2021

Morning Bell - Sophia Mavridis

The Aussie market ended last week with gains, with the energy sector rising the most, up 1.6%. The energy sector was led by Oil Search (ASX:OSL), Whitehaven Coal (ASX:WHC), BlueScope Steel (ASX:BSL) and Nickel Mines (ASX:NIC), which all ended the week higher. The financials also performed well on Friday after a volatile week. Meanwhile healthcare declined.

Imaging software company Pro Medicus (ASX:PME) made the most gains on Friday, however its share price is still down the past month. Aussie investment company, Washington Soul Pattinson (ASX:SOL) gained 3.3%, partly due to its exposure to energy investments. While, TPG Telcom (ASX:TPG) dropped 8.6%, off the back of news that its founder was selling a $335 million stake in the company.

In US equities, all three major benchmarks closed lower, wrapping up a volatile week. The Omicron variant has had investors concerned, and the US also delivered a disappointing jobs report, with slower than expected job creation last month. The Dow was down 0.2% and the S&P500 down 0.8%. The tech-heavy Nasdaq dropped 1.9%, with Tesla falling over 6% and Zoom falling over 4%.

There was however a late rally on Wall Street, and the ASX200 is set to open higher this morning. The SPI futures are suggesting a rise of 0.15% at the open.

Citing concerns on the Omicron strain, Goldman Sachs cut its forecast for US economic growth in 2022 from 4.2% to 3.8%. They say a downside scenario is the most likely outcome, where the virus spreads quicker, but immunity against hospitalisations falls slightly more.

What to watch today:

  • Oil is trading lower at US$66 a barrel. Watch Santos (ASX:STO) and Woodside Petroleum (ASX:WPL).
  • Gold is currently higher, however has fluctuated around $1,770 an ounce, after the disappointing US jobs report.  
  • The seaborne iron ore price is lower, trading at US$101.49 a tonne.
  • Metcash (ASX:MTS) is set to release its half-year results today. Ord Minnett analysts expect the company to report a net profit of $141 million for the past 6 months, allowing for an interim dividend of 10.5 cps.

Trading ideas:

  • Bell Potter have maintained their BUY rating on chemical manufacturing company DGL Group (ASX:DGL) and have decreased their price target from $3.05 to $3, after the company held its AGM. DGL last closed at $2.40, implying 25% share price growth in a year.
  • Goldman Sachs have a BUY rating on Healthco Healthcare and Wellness (ASX:HCW), with a $2.56 price target. The broker says that the healthcare real estate sector in Australia is in its infancy, with potential for growth through acquisitions and ground up development.
  • Trading Central’s analysts have flagged a bullish signal in Hastings Technology Metals (ASX:HAS). This bullish signal indicates that the stock price may rise from the close of $0.25 to the range of $0.30 to $0.32, within 28 days.