BPO TV

Our local market yesterday started the week in the green, closing 0.14% higher with technology, consumer discretionary and energy in the lead. Overnight, Wall Street saw technology stocks improve. The Nasdaq closed at records to kick off the first trading day of December, up 0.97%. The S&P500 briefly hit an all-time high before closing 0.24% in the green, while the Dow Jones was just under, closing 0.29% lower. Intel was in focus, making strong gains before sharply falling before the close, after announcing its CEO Pat Gelsinger will be retiring. Super Micro Computer (NASDAQ:SMCI) jumped after announcing the search of a new finance chief – this also follows the announcement that the business found no evidence of fraud or misconduct. It’d share price has been on a rollercoaster ride this year due to claims of accounting manipulation. And retail stocks also did quite well, off the back of the Black Friday and Cyber Monday sales, which saw strong gains from Macy’s and Lululemon, among others.

What to watch today:

• The SPI futures are pointing to an improvement, suggesting our local market will open 0.73% higher this morning.
• In commodities,
  • The iron ore price should be supported today, with recent data showing that China’s factory activity expanded at its fasted pace in 5 months. This was above expectations, signalling an expansion in activity. Now note, the rate of change is still modest, however it is a pickup in activity for China.
  • Gold is trading lower, therefore sector worth watching in early trade today.
  • And crude oil is also trading lower, as investors monitor the bullish economic data from China and await the upcoming OPEC+ meeting.
• The US dollar continued its unstoppable run, which has seen the Aussie dollar is back to the bottom end of its recent rage at US$0.65. And buying 96.85 Japanese Yen, 0.51 British pence and NZ$1.10.

Trading Ideas:

• Bell Potter maintains their BUY rating on Northern Star Resources (ASX:NST), a large-scale Australian gold producer with projects in Western Australia and North America. Northern Star Resources and DeGrey Mining (ASX:DEG) announced that they have agreed that NST would acquire DEG by Scheme of Arrangement. Their price target is $19.55 and at NST’s current share price of $16.59, this implies 17.8% share price growth in a year. Bell Potter also have a Speculative Buy rating on DEG with a valuation of $2.15 per share.
• Also in the gold sector, Bell Potter maintains a Buy rating on Gold Road Resources (ASX:GOR), off the back of the Northern Star Resources and DeGrey Mining acquisition announcement. Gold Road Resources are the largest shareholder of DeGrey Mining. Bell Potter’s increased their [roce target from $2.40 to $2.55, and at it’s current share price of $2.04, this implies 25% share price growth in a year.