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Morning Bell 31 July

Bell Direct
July 31, 2020

The Aussie share market is eyeing a fall of 0.5% at the open, following a mixed session on overnight markets with the Dow falling 0.9%, the S&P500 down 0.4%, while the Nasdaq pumped up 0.4%. But what’s noteworthy is the Nasdaq futures are suggesting a 1% gain on Friday. So in afterhours trade, the ETF tracking the Nasdaq 100 (QQQ) rose 1% and the ETF tracking the S&P500 (SPY) rose 0.9%. So keep an eye on their Aussie counterparts today, the ETF on the ASX that tracks the Nasdaq 100 is (ASX:NDQ).

Overnight, the U.S. officially entered a recession with second quarter GDP falling 32.9%, following the 5% drop in Q1. The fall was not as bad as the expected 34.1% drop however, it was the worst fall in history. This saw people reshuffle their portfolios, chasing companies upgrading their earnings.

What else to watch today:

  • On the economic side, private sector borrowing known as private sector credit is out today.

Local trading ideas:

  • Bell Potter reiterated CBA (ASX:CBA) as a buy with a price target of $78.00, implying 7% share price growth from yesterday’s close price of $73.01.
  • Janus Henderson (ASX:JHG) delivered a solid June quarter update, Bell Potter reiterated JHG’s buy rating and increased its target to $42.50. That implies 36% growth from yesterday’s close of $31.21. Bell Potter also upgraded its earnings per share estimates by 2-3% with June quarter profit hitting US$104.1 million, smashing through expectations.
  • Following IOOF Holdings’ (ASX:IFL) disappointing quarterly report that raised a number of issues that were not properly addressed in the update, Bell Potter reiterated IOOF as a sell, dropping its target price to $4.20.th

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