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The Australian market is down 1% week-to-date and closed 0.7% lower on Friday, weighed down by the materials sector. Materials dropped more than 3% on Friday and just over 6% in the week. This was mostly driven by a pullback in iron ore prices, with concerns about weak demand from China, with recurring COVID-19 outbreaks, as well as low profitability at Chinese steel mills. On top of this, there are also concerns over the Chinese property market and banking sectors, so these reports pushed iron ore prices into a bear market, and overshadowed reports of large stimulus packages in China. Rio Tinto (ASX:RIO)’s share price dropped on Friday with the fall in iron ore and the release of its quarterly update. The miner provided a bearish outlook, describing some difficulties facing China’s recovery from the pandemic lockdowns, as well as the impacts of the Fed’s rate hikes on demand. Goldman Sachs retain their Buy rating on RIO, so keep watch of its share price today. The broker says its share price could be great value and have slightly trimmed their price target to $124.10.

Materials stocks fell across the board on Friday, however the worst performer was investment manager Pendal (ASX:PDL) after the group reported worse-than-expected outflows in the June quarter from its managed funds.

The most traded stocks by Bell Direct clients on Friday were Whitehaven Coal (ASX:WHC), Rio, Mineral Resources (ASX:MIN) and BHP.

China’s GDP growth missed expectations in the second quarter, sending Chinese markets lower. Despite this, European markets gained, with the Stoxx-600 up 1.8% by the close. And in New York, US equities rallied, following a round of major banks reporting their earnings results. The Dow Jones gained more than 600 points or 2.2%, the S&P500 up 1.9% and the Nasdaq gained 1.8%.

What to watch today:

• The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.88% at the open this morning.
• Keep watch of ANZ’s share price movements today, with reports that ANZ will acquire accounting software MYOB, as well as interest in acquiring Suncorp Group (ASX:SUN). A capital raising to fund the deal is expected to be announced this morning.
• In commodities, oil is trading 2% higher, so look out for energy producers such as Woodside Energy (ASX:WDS). Gold has fallen slightly, while iron ore is currently trading 4% lower. So also watch the major mining stocks today.

Trading Ideas:

• Citi have released their latest research report on the major banks: They rate ANZ Bank as a Buy with a price target of $30.75, while Commonwealth Bank (ASX:CBA) they rate as a Sell, with a price target of $90.75. Citi rate NAB as Neutral with a price target of $32.25, and they rate Westpac (ASX:WBC) as a Buy with a $29 price target.
• Trading Central have identified a bullish signal in Steadfast (ASX:SDF) indicating that the stock price may rise from the close of $5.10 to the range of $5.55 to $5.65 over 14 days, according to the standard principles of technical analysis.