Market Wrap

ASX pre-market wrap: US stocks falter as omicron fears escalate

Tue 21 Dec 21, 9:15am (AEST)

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ASX SPI futures is currently pointing to a 3 point fall, down 0.04% to 7,192.

US stocks fell overnight as covid cases continue to surge globally. Stocks tied in with the economy fell the most including financials, materials and industrials.

LIVE DATA USED: Data shown in article tables is live and may not match data quoted in article at time of publication.

Overnight summary

Tue 21 Dec 21, 9:15am (AEST)

Name Value Chg %
US Indices
S&P 500
4649.23 +1.78%
Dow Jones
35,493 +1.60%
NASDAQ 100
15,341 +2.40%
Russell 2000
2,203 +2.95%
Country Indices
Canada
0 0.00%
China
0 0.00%
Germany
15,447 +1.36%
Hong Kong
0 0.00%
India
0 0.00%
Japan
0 0.00%
United Kingdom
0 0.00%
Name Value Chg %
Commodities (USD)
Gold
1,801.60 +0.77%
Iron Ore
112.54 -
Copper
4.39 +1.19%
WTI Oil
72.76 +2.31%
Currency
AUD/USD
0.7153 +0.54%
Cryptocurrency
Bitcoin
0 0.00%
Ethereum
0 0.00%
Miscellaneous
U.S. 10 Year Treasury
1.487 +4.79%
VIX
21 -8.13%

Major US averages closed sharply lower overnight, with the Dow Jones down by more than 400 points for a second consecutive session. Investors continued to worry about the resurgence of covid cases and its implications for the global economy. 

The World Health Organisation said last Friday that there is “consistent evidence that Omicron has a substantial growth advantage over Delta.” 

“It is spreading significantly faster than the Delta variant in countries with documented community transmission, with a doubling time between 1.5–3 days,” the report said, adding that “... it is likely that Omicron will outpace Delta where community transmission occurs.” 

US Sectors

Tuesday, 21 December 2021

Sector Chg %
Communication Services 0.00
Consumer Discretionary 0.00
Consumer Staples 0.00
Energy 0.00
Financials 0.00
Health Care 0.00
Sector Chg %
Industrials 0.00
Information Technology 0.00
Materials 0.00
Real Estate 0.00
Utilities 0.00

Sectors tied in with the economy fell the most, led by sharp declines in financials, materials, industrials and energy.

Financials were in the deep red with Wells Fargo down 2.3% to a 2-month low, Citi sliding 2.1% to a 9-month low and Bank of America closing 1.6% lower. 

Material stocks were also long, but as far as the ASX is concerned, the US-listed counterparts of BHP Group (ASX: BHP) and Rio Tinto (ASX: RIO) held up relatively well, down just 0.1% and 0.9% respectively. 

Technology stocks continued to falter with mega cap names including Tesla sliding 3.5%, Facebook down 2.5% and Amazon closing 1.7% lower.

Industry ETFs

Tuesday, 21 December 2021

Description Last Chg %
Commodities
Aluminum 58.01 +3.88%
Copper Miners 35.76 +2.88%
Gold 167.02 -0.04%
Lithium & Battery Tech 82.26 +1.34%
Nickel 25.81 +1.89%
Strategic Metals 104.65 +1.22%
Steel 52.05 +2.24%
Silver 20.77 +0.97%
Uranium 24.41 +6.13%
Industrials
Aerospace & Defense 100.72 +3.79%
Global Jets 21.04 +5.25%
Healthcare
Biotechnology 153.95 +0.61%
Cannabis 6.39 +2.73%
Description Last Chg %
Cryptocurrency
Bitcoin 30.84 +3.56%
Renewables
CleanTech 17.69 +4.86%
Hydrogen 20.62 +3.41%
Solar 77.94 +5.67%
Technology
Cloud Computing 27.35 +3.30%
Cybersecurity 31.67 +2.23%
E-commerce 27.23 +4.17%
Electric Vehicles 0 0.00%
FinTech 42.07 +4.42%
Robotics & AI 35.69 +2.91%
Semiconductor 530.12 +3.61%
Sports Betting/Gaming 24.22 +4.58%
Video Games/eSports 66.66 +4.38%

ASX Sectors to watch

ETF LOSERS 

The Lithium & Battery Tech ETF plunged 5.3% on heavy volumes with 1.87m shares traded compared to a 20-day average of 1.2m. 

  • ASX lithium shares have been holding up relatively well amid recent market volatility. Large cap players like Pilbara Minerals (ASX: PLS) pushed to an all-time high on Monday, while Allkem (ASX: AKE) continues to trade in a range bound fashion 

  • The overnight move could flag headwinds for the bullish sector

Likewise, the Rare Earth/Strategic Metals ETF dipped to a 2-month low. The ETF’s largest holding, China’s Ganfeng Lithium plunged 8.5% to a 5-month low. 

  • This could serve as a major blow for the bullish lithium and rare earth space 

  • Leading ASX names like Lynas Rare Earths (ASX: LYC) and Australian Strategic Metals (ASX: ASM) could suffer on Tuesday

The Hydrogen ETF hit a fresh all-time low overnight. Its major constituents Plug Power, Bloom Energy and Ballard Power Systems all fell more than 6% as investors continue to flee from risky investments. 

  • This could flag more negative flow for beaten names like Hazer Group (ASX: HZR), Lion Energy (ASX: LIO) and Pure Hydrogen (ASX: PH2)

The Steel ETF fell 3.4% to a 9-month low. China’s debt-ridden property sector has had major repercussions for steel demand. 

“We normally stockpile steel products in winter at relatively lower prices and sell them after the new year holidays when consumption resumes. But we are holding off this year,” a Beijing-based steel trader told Reuters. 

Last week, major US steelmaker Nucor, issued a profit warning amid “lower volumes caused by year-end seasonality.” 

  • The sudden reversal could flag weakness for ASX steel plays like BlueScope Steel (ASX: BSL

The FinTech ETF hit a 13-month low overnight, weighed down by a 5.2% decline in Block (formerly Square). 

  • ASX companies like Xero (ASX: XRO), EML Payments (ASX: EML) and Tyro Payments (ASX: TYR) could be at risk 

  • Afterpay (ASX: APT) is expected to log a sharp decline, given its Block takeover


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Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University and was Vice President of the University Network for Investing and Trading (UNIT). He is an avid swing trader, and drawn to breakouts and technical set ups. Outside of writing and trading, Kerry is a huge UFC fan, loves poker and bouldering.

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