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In New York overnight, we saw quite a major reversal in intraday trading. The Dow Jones rose 2.8% or more than 800 points, after being down more than 500 points earlier in the day. It was an impressive rebound, following US inflation data coming in; CPI jumped to a 40-year high and higher than expected, while the country’s headline inflation declined to 8.2%, in line with market expectations. This saw stocks fall to their lowest levels since 2020, before rebounding. The S&P500 posted its widest trading range since March 2020, and closed 2.6% higher, while the Nasdaq closed 2.2% higher. It was the fifth largest intraday reversal from a low in the history of the S&P500, and the fourth largest for the Nasdaq.

What to watch today:

• The Australian market is set jump 1.66% at the open this morning, following Wall Street’s strong lead.
• In commodities:
  • The price is oil has jumped over 2%, halting three sessions of declines.
  • Gold has dropped to an over two-week low as the US dollar jumped.
  • Iron ore has fallen more than 1%, the lowest in nearly 11 months as the looming threats of fresh lockdowns in China’s major cities kept demand for industrial inputs low.
• Harvey Norman (ASX:HVN) is set to go ex-dividend today.

Trading Ideas:

• Bell Potter maintain a Buy recommendation on DroneShield (ASX:DRO), after the company released September Quarter results in-line with expectations. Their price target is $0.24 and at its current share price of $0.17, this implies 40% share price growth in a year.
• And Trading central have identified a bullish signal in West African Resources (ASX:WAF) indicating that the stock price may rise from the close of $1.06 to the range of $1.20 to $1.24 over 20 days according to the standard principles of technical analysis.