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The market was closed yesterday for the Queen’s Birthday public holiday, so before we jump into today’s trading session, let’s have a quick look at what happened last Friday.

Our local market experienced its worst week since 2020, dipping below 7,000 points, as markets digested the RBA’s second rate hike, which worried investors over the impact on the big banks’ bottom lines. All sectors were in the red, with the real estate, consumer discretionary and energy sectors down the most.

Looking at the ASX200 leaderboard, the top performer was accounting software business, Xero (ASX:XRO), after Citi reiterated its Buy rating and $108 price target. Meanwhile the worst performers included Pointsbet (ASX:PBH), Sims (ASX:SGM) and Lynas Rare Earths (ASX:LYC).

The most traded stocks by Bell Direct clients last Friday included all four of the big banks, CSL (ASX:CSL) as well as Lake Resources (ASX:LKE).

Moving to the US, on Friday, the highly anticipated inflation report showed a faster-than-expected rise in prices, which took a toll on the share market. CPI came in at its highest level since 1981, rising 8.6% year-over-year. And on Monday’s session, the US market continued to come under pressure, as recession fears intensified ahead of this week’s key Federal Reserve meeting. This saw the S&P500 fall 3.9% to 3,749 points, its lowest level since March 2021, bringing its losses down more than 20% from its January record, therefore entering into bear market territory.

What to watch today:

• Following two consecutive negative sessions in the US, our local market is set to fall 2.7% this morning if you go by the SPI futures.
• Economic news wise, today we’ll get an update on business confidence for May. In April, the index dropped to 10, from a 5-month high of 16 in March, and today’s reading is expected to come in at 12 points.
• In commodities, the oil price rose as tight supplies outweighed demand worries. The gold price slumped over 2%, as the US dollar strengthened ahead of steep interest rate hikes expected by the US Federal Reserve, and the spot iron ore price is trading 2.4% lower at US$141 a tonne.
• Kingsland Minerals will begin trading on the ASX today, under the ticker code KNG. Kingsland is a mineral exploration and development company focusing on high-grade uranium, copper, and gold projects across Australia.
• Stocks going ex-dividend today include Cimic Group (ASX:CIM) and KMD Brands (ASX:KMD), which was formerly Kathmandu Holdings.
• If you hold Amcor (ASX:ABC) or investment company, Whitefield (ASX:WHF), you will receive your dividend payment today.

Trading Ideas:

• Citi have maintained its Buy rating on Domino’s Pizza (ASX:DMP), however have reduced its price target from $108.42 to $100.95. Citi’s analysis of high frequency data suggests that Domino’s website traffic in key markets (Europe and Japan) is under increasing pressure, likely further intensified by inflationary pressures and labour shortages. Citi does however see upside from potential merger and acquisition activity and expect sales momentum to rebound later in calendar year 2022. At its current share price of $62.41, this implies about 62% share price growth in a year.
• Trading Central has a bearish signal on Charter Hall Retail REIT (ASX:CQR) indicating that the stock price may fall from the close of $3.95 to the range of $3.25 – $3.40 in the next 141 days according to standard principals of technical analysis.