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The local market soared 1.75% on Friday on the back of the US markets sharp rebound on Thursday, after US headline inflation came in below market expectations of a decline to 8.2% for the month of September, while core inflation jumped to 6.6%, which is a 40-year high. Investor sentiment locally was boosted by the US markets experiencing the biggest turnaround since 2020 from negative to sharply positive territory after CPI data was released. For the week, the ASX lost 0.06%.

Locally, the 2022 favourite energy sector led the charge again on Friday, adding 3.75%, while utilities stocks jumped 3.62% and Consumer Staple stocks rallied 2.04%. All 11-sectors of the ASX ended Friday’s session in positive territory. The winning stocks on Friday were Virgin Money UK (ASX:VUK), which lifted 9.525, Domino’s Pizza (ASX:DMP) added 7.6% and Liontown Resources (ASX:LTR) jumped 7.57%. On the losing end, Pilbara Minerals (ASX:PLS) fell 5.06%, St Barbara (ASX:SB) lost 3.31% and Ramelius Resources (ASX:RMS) ended the day down 3.1%.

The most traded stocks by Bell Direct clients on Friday were the BetaShares Australian Strong Bear Hedge Fund (ASX:BBOZ), Pilbara Minerals (ASX:PLS) and Whitehaven Coal (ASX:WHC).

Overseas on Friday, US markets closed lower across the key indices on Friday, following the release of big bank earnings reports. The Dow Jones fell 1.3%, the S&P500 lost 2.4% and the tech-heavy Nasdaq took the biggest hit, closing the day down 3%. Investors reacted to a mixed bag of earnings from the big banks with consensus across the big banks indicating the economy is strong now but outlook for the future is uncertain. JP Morgan Chase was one bank that impressed investors in its earnings results with the bank rallying 1.6% on the back of reporting stronger revenues amid higher consumer spending, high interest rates and strong performance on its trading desks. Morgan Stanley on the other hand fell 5% after its reports missed analysts’ expectations for both earnings and revenue.

Over in Europe and the UK, the key indices closed higher on Friday. The FTSE100 added 0.12%, the French CAC jumped 0.9% and Germany’s DAX added 0.67%. Markets in Europe and the UK turned higher after the UK government U-turned on some of its controversial fiscal policies and the country’s finance minister was fired. New UK Prime Minister Liz Truss said on Friday that the government would include a further reversal of tax-cutting plans laid out in the mini-budget on September 23.

What to watch today:

• ASX futures are expecting the local market to open sharply lower, down 1.51% to start the new trading week following on from the sell-off on Wall Street on Friday.
• In economic data, the RBA’s meeting minutes will be released on Tuesday, giving an insight into just how dovish the RBA are toward raising interest rates in future months, and the country’s unemployment rate is out on Thursday. Over in the US, it is a week for building and property market data with building permits and house starts data for September both out on Wednesday and existing home sales data for September out on Thursday.
• On the commodities front, it’s a red start to the week for commodities with Brent Crude oil trading 3.08% lower at US$91.65 per barrel, Gold is trading down 1.34% at US$1643 per ounce, and iron ore is trading flat at US$96.50 per ton.

Trading Ideas:

• Trading Central has identified a bullish signal on James Hardie Industries (ASX:JHX) following the formation of a pattern over a period of 7-days which is roughly the same amount of time the share price may rise from the close of $32.90 to the range of $37.50 to $ 38.50 according to standard principles of technical analysis.
• Trading Central has also identified a bearish signal on Euroz Hartleys Group (ASX:EZL) following the formation of a pattern over a period of 15-days which is roughly the same amount of time the share price may fall from the close of $1.27 to the range of $1.13 - $1.15 according to standard principles of technical analysis.

This morning the Australia dollar is trading sharply lower at 61.98 US cents, 55.09 British Pence, 92.27 Japanese Yen, and 1 dollar 12 cents New Zealand.