Morning Bell 27 October

Wall Street closed in record territory on Friday after cooler-than-expected inflation data in the U.S. boosted investor optimism that the Fed can continue on its rate cutting journey. The Dow Jones rose 1.01% to close at a record over 47,000 for the first time, while the S&P500 added 0.8% also at a fresh record and the Nasdaq rounded out the trifecta of records closing the day up 1.15%. September CPI in the U.S. came in at a rise of 0.3% taking annual inflation to 3%, below the 0.4% and 3.1% readings economists were expecting.

In Europe on Friday markets closed higher as U.S. inflation came in lower than expected. The STOXX 600 rose 0.2%, Germany’s DAX added 0.13%, the French CAC closed flat, and in the UK, the FTSE100 ended the day up 0.7%.

Across the Asia region on Friday, markets closed higher as reports surfaced that trade negotiations between the U.S. and China will resume this week. Japan’s Nikkei rose 1.35%, South Korea’s Kospi Index added 0.11%, and Hong Kong’s Hang Seng gained 0.74%.

The ASX200 posted a 0.15% loss on Friday as President Trump ended trade talks with Canada and negotiations with China failed to progress on Friday especially over rare earth supplies, causing investors to remain concerned over the instability of the global trade landscape.

Mount Gibson Iron tanked over 25% on Friday after the Australian iron ore producer announced a significant rockfall event at the company’s Koolan Island operations has forced the halt of production at the operation of the 80-year-old mine. 

What to watch today:

• On the commodities front this morning oil is trading 0.5% lower at US$61.50/barrel, gold is down 0.34% at US$4111.89/ounce and iron ore is flat at US$105.55/tonne.
• The Aussie dollar has strengthened against the greenback to buy 65.47 US cents, 100.02 Japanese yen, 48.84 British pence and 1 New Zealand dollar and 14 cents.
• Ahead of Monday’s trading session here in Australia the SPI futures are anticipating the ASX will open the day up 0.3%.

Trading ideas:

• Bell Potter has initiated coverage of Elsight (ASX:ELS) with a buy rating and a 12-month price target of $1.90 on the tech company that specialises in creating secure, continuous, and reliable communication solutions for unmanned systems like drones and robotics. Elsight is a buy  from Bell Potter’s analyst because it provides a mission-critical communication platform for unmanned systems, positioning it as a pure-play enabler of the rapidly expanding global drone and defence markets. With strong validation from repeat OEM orders, accelerating sales investment, and a scalable, recurring-revenue model, ELS offers compelling growth and valuation upside.
• Trading Central has identified a bullish signal on New Hope Corporation (ASX:NHC) following the formation of a pattern over a period of 28-days which is roughly the same amount of time the share price may rise from the close of $4.00 to the range of $4.80 to $4.95 according to standard principles of technical analysis.