ASX 200 Pre-market wrap: Wall Street climbs after Pfizer said vaccine offers omicron protection

Before the bell

KEY POINTS

ASX SPI futures is currently pointing to a 27 point fall, down 0.3% to 7,390.  

Wall Street climbed after Pfizer and BioNTech said initial lab studies show a third dose of their covid vaccine neutralises the omicron variant. The S&P 500 remains within 1% of all-time highs. 

On the US economic front, the number of workers who left their jobs fell 4.7% from 4.36m to 4.16m in October, according to the Labor Department. While quit rates dropped, the level of job openings increased 4.1%, just below all-time highs. Economists have dubbed the term “The Great Resignation” to describe the abnormal number of people leaving jobs in recent months. 

Global markets have turned optimistic this week about the impact of omicron, further bolstered by China’s move to lower banks’ reserve requirements to boost liquidity and lending. 

US Congress has taken the first step towards preventing a possible default on debt. The House passed a bill that would allow the Senate to raise the debt ceiling with a simple vote. The US is expected to hit its existing debt ceiling around 15 December.

US sector breakdown

KEY POINTS

US sectors were relatively quiet overnight with no gains or losses of more than 1%.

Technology stocks posted moderate gains as investors returned to risk assets. Most mega cap tech stocks closed in positive territory.

Meta Platforms (Facebook) climbed 2% after the company gave its employees the option to delay returning to offices. Apple shares also closed 2% higher after UBS retained its buy rating despite concerns about slowing sales for the iPhone 13.

Financials underperformed as most major US banks including Citi, JPMorgan, Bank of America and Wells Fargo finished the session lower.

ASX Sectors in play

MAJOR ETFS

ETF GAINERS

The Airlines ETF topped the leaderboards as the vaccine news encouraged investors to place bets on reopening stocks. The Global Jets ETF trailed closely behind as well. United Airlines gained 4% and Delta Air Lines closed 2.3% higher. Elsewhere, Norwegian Cruise Line jumped 7.8% and Booking Holdings added 2.7%. 

• ASX travel-related stocks like Qantas (ASX: QAN), Flight Centre (ASX: FLT) and Webjet (ASX: WEB), Corporate Travel (ASX: CTD) had mixed results on Wednesday, many of which closed slightly lower 

• The overnight optimism could provide a much needed kick for ASX players

The Lithium & Battery ETF rallied following a harsh 10% correction that took place between 22 November and 6 December. Benchmark Mineral Intelligence reported that spodumene prices climbed 17.3% in November to US$1,525/t free-on-board. 

• The Lithium ETF remains 5% away from all-time highs 

• Large cap names like Allkem (ASX: AKE) and Pilbara Minerals (ASX: PLS) have remained range bound for the last 4 months 

• Eyes on Vulcan Energy (ASX: VUL) after it signed a binding offtake agreement Volkswagen 

The Rare Earth/Strategic Metals ETF has largely been range bound, trading between US$115 and US$125 since August. China is set to merge several rare earth assets in a move to strengthen its advantages in the industry. 

• Lynas Rare Earths (ASX: LYC) cracked a fresh all-time high on Wednesday, even after the company advised its CEO sold 200,000 shares on Monday 

• Australian Strategic Metals (ASX: ASM) is down almost 20% this week after announcing the optimisation study for its Dubbo Project. The study results might have sparked questions about its valuation and project economics 

The Sports Betting & iGaming ETF climbed for a third-straight session following strong gains from names like DraftKings, Rush Street Interactive and Penn National Gaming. Most of these stocks remain 30% below January highs. Tough competition, high valuations and ballooning losses have weighed. 

• The rebound could drive positive flow for beaten up ASX names like PointsBet (ASX: PBH), BlueBet (ASX: BBT) and BetMakers Technology (ASX: BET) 

Upcoming events

CORPORATE CALENDAR

ECONOMIC CALENDAR

LISTINGS