Morning Bell 26 August

Between the Bells

Wall Street ended Friday’s session higher after Fed Chair Jerome Powell indicated rate cuts are on the horizon at his Jackson Hole Economic Symposium speech on Friday. The Dow Jones added 1.14% on Friday while the S&P500 rose 1.15% and the tech-heavy Nasdaq ended the day up 1.47%. Powell said ‘the time has come for policy to adjust’ which was music to all investor ears after over a year of an aggressively high interest rate strategy to tame inflation in the world’s largest economy.

Friday’s rally in the US boosted the major averages to gains for the week with the Dow adding 1.3%, the S&P500 rising 1.45% and the Nasdaq climbing 1.4%.

Uranium miners in the states rallied on Friday after Kazakhstan’s national uranium miner cut its production output for 2025 due to delays in ramping up production at some sites and limited access to sulfuric acid. This output decline places pressure on the global supply of uranium, which is growing in demand due to the global increase in nuclear power.

Positive rate cut sentiment out of the Fed boosted European markets on Friday as a lower US interest rate weakens the USD and increases the attractiveness of trade with Europe and other export-oriented countries. The STOXX 600 rose 0.5% while Germany’s DAX added 0.76%, the French CAC rose 0.7% and, in the UK, the FTSE100 ended the day up 0.48%.

Across the Asia region on Friday, markets closed mostly lower as investors awaited Fed Chair Jerome Powell’s speech of Jackson Hole on Friday. Japan’s Nikkei rose 0.4% as inflation came in at 2.8%, a flat reading on the prior month, while China’s CSI index rose 0.42%, Hong Kong’s Hang Seng lost 0.14% and South Korea’s Kospi Index lost 0.22%.

Locally on Friday the ASX200 ended the day down just 0.04% as the utilities and energy sectors weighed on market gains. For the week though, the ASX200 rose 0.66% to sit above 8000 points again for the first time since the early August mass-equity sell off.

What to watch today:

• Tech sector heavy weight WiseTech Global led the winning stocks for the week with a 28% climb which paved the foundations for the tech sector to soar over 8% last week. The WTC rally was on the back of strong FY24 results and growth momentum expected to continue into FY25.
• Telix Pharmaceuticals shares fell 9% on Friday despite the radiopharmaceuticals company posting very strong first half results. For the first half, Telix reported total revenue rose 65% to $364m, gross margin increased to 66% from 63%, the company reported NPAT of $29.7m up from a loss of $14.3m and Telix reaffirmed its guidance for FY24.
• Ahead of the first local trading session of the last week for August, the SPI futures are anticipating the ASX to open the day up 0.51% on the back of the Fed’s rate cut outlook boosting global sentiment late last week.
• On the commodities front this morning, oil is trading 2.5% higher at US$74.83/barrel, gold is up 0.9% at US$2509/ounce, and iron ore is down 0.14% at US$98.05/tonne.
• The Aussie dollar has strengthened to buy 67.97 US cents, 98.26 Japanese Yen, 51.21 British Pence and 1 New Zealand dollar and 9 cents.

Trading Ideas:

• Bell Potter has maintained a buy rating on Rural Funds Group (ASX:RFF) and has raised the 12-month price target on the agricultural property management company from $2.40 to $2.50 following the release of RFF’s FY24 results. For the last financial year, RFF reported AFFO above Bell Potter’s forecasts, 18% revenue growth and strong operating cash flows. The analysts also noted material improvement in the profitability indicators in recent months including cattle, almond and macadamia prices rallying off lows in recent times, with RFF also having a history of delivering net asset value growth through investment, with the next macadamia pillar.
• Trading Central has identified a bullish signal on Nick Scali (ASX:NCK) following the formati