Market Wraps

Evening Wrap: ASX 200 in a sea of red, Woolworths slides on trading update

Thu 03 Nov 22, 4:41pm (AEST)

The S&P/ASX 200 closed 129 points lower, down -1.84%.

The local sharemarket was handballed a depressing session after the Fed reinforced its 'hike until the job is done' rhetoric, Australian service sector growth slumped into contraction and tech stock stage a surprising turnaround.

Let's dive in.

Today in Review

Thu 03 Nov 22, 4:19pm (AEST)

Name Value % Chg
Major Indices
ASX 200 6,857.9 -1.84%
All Ords 7,050.6 -1.77%
Small Ords 2,779.3 -2.16%
All Tech 2,062.7 -1.47%
Emerging Companies 2,097.8 -1.15%
AUD/USD 0.6367 +0.27%
US Futures
S&P 500 3,778.25 +0.25%
Dow Jones 32,243.0 +0.20%
Nasdaq 10,983.0 +0.35%
Name Value % Chg
Communication Services 1,418.9 +0.14%
Industrials 6,271.7 -0.55%
Energy 11,437.1 -1.18%
Information Technology 1,429.4 -1.18%
Financials 6,501.3 -1.48%
Health Care 40,537.3 -1.75%
Consumer Staples 12,113.6 -2.08%
Real Estate 2,967.1 -2.13%
Utilities 7,069.6 -2.25%
Consumer Discretionary 2,831.2 -2.55%
Materials 15,341.0 -2.96%

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The ASX 200 sold off sharply after Powell reiterated his unwavering hawkishness at the Fed's press conference. His message crushed recent hopes of a pivot and sent the Fed's terminal rate to now 5.0% for May 2023, up from 4.75%.

  • Telcos was the only green sector thanks to a 1.7% gain from Telstra

  • Energy held up relatively well thanks to higher oil prices

  • Tech was another relative outperformer as heavyweight names managed to reverse steep losses, contrary to the Nasdaq's underperformance overnight

  • Staples was not a safe-haven after Woolworths shares dipped -3.5%

    • The supermarket giant's Q3 results said "We continue to see early signs of customer purchasing habits changing, but it remains unclear how much of this relates to cost-of-living pressures compared to COVID normalisation."

  • Materials led to the downside despite Chinese iron ore futures trading slightly higher


Australia services PMI slumped to 49.3 in October from 50.6 in September.

  • Service sector growth hits contraction for the first time in nine months

  • Business activity shrank, work outstanding fell at a faster rate and new orders declined at levels not seen since September 2021

  • Still, employment levels continued to rise and business confidence improved

Australia balance of trade was $12.44bn in September from $8.66bn in August.

  • Export earnings rose 7% while imports were little changed

  • Westpac analyst was expecting flat exports growth, “coal was not as weak as we anticipated, despite floods disrupting shipments, down by only $0.1bn. Fuels rose by $1.8bn. Metal ores rose by more than we anticipated, up by $1.2bn, up on higher volumes.” 

Australia dwelling approvals fell -5.8% month-on-month in September from -9.4% in August.

  • “Overall, the September report suggests that dwelling approvals are beginning to more broadly weaken, reflecting the harsh set of circumstances facing the housing market,” said Westpac Economics 

China services PMI declined to 48.4 in October from 49.3 in September. 

  •  “October saw a sustained slowdown in activity across the Chinese service sector, as ongoing efforts to stop the spread of COVID-19 disrupted business operations and weighed on demand,” Caixin Global said in a statement


"Commodity markets were mixed as signs of tightness via lower inventories was weighed against the gloomy economic backdrop. Sentiment in China’s markets remains positive amid ongoing rumours of an easing in COVID-19 restrictions," said ANZ senior commodity analyst, Daniel Hynes.

  • Iron ore futures on the Dalian Commodity Exchange rose 1.4%

Latest news

Post market brief

The ASX 200 managed to bounce slightly from session lows of -2.34%, which was also the previous area of resistance (~6,820) that we were trading to break out of.

The most important takeaway from the Fed was: "If we overtighten, then we have the ability with our tools - which are powerful - as we showed at the beginning of the pandemic episode, to support economic activity strongly - if that happens."

Basically, we keep going until something breaks and then patch that mess up with QE and rate cuts. The Fed is finding it difficult to be dovish because a) core inflation continues to accelerate and b) the labour market is far too strong.

So now we're back to square one. The Fed is hawkish. Terminal rates are now up to 5.0% for May 2023 (from 4.75%). The 2-year Treasury yield rallied back up to new 15 year high. The US dollar is trending higher. But the S&P 500 is still 6.7% above its 13 October low.

Does this mean we see the US market re-test recent lows in the absence of a pivot? And as we all know, if Wall Street sneezes, our markets tend to get a cold too.

US unemployment data is due on Friday night, which could be another catalyst for global markets.

Index charts

S&P/ASX 200: Found a little bounce from ~6,820. Let's see if this area and the 50-day can provide some support.

XJO chart
XJO chart (Source: TradingView)

S&P/ASX 200 Energy: One of the better performing sectors thanks to higher oil prices. US gasoline inventories fell to their lowest level since 2014, according to EIA data. US domestic production was also lower.

XEJ chart
XEJ chart (Source: TradingView)

S&P/ASX 200 Tech: Rather surprising to see the tech index hold up relatively well given the Nasdaq's underperformance, down -3.4% last night. Names like Wisetech, Altium and Xero, while still closing red, managed to reverse rather sizeable losses.

XIJ chart
XIJ chart (Source: TradingView)

Major announcements

Large caps (>$1bn)

  • Perpetual (ASX: PPT) +7.1% received an unsolicited, non-binding indicative proposal for the company at $30.00 cash per share  

  • New Hope (ASX: NHC) +5.9% plans to undertake an on-market buy-back of up to $300m shares, commencing 17 November 2022

  • A2 Milk (ASX: A2M) +4.2% was granted temporary FDA approval to sell its a2 Platinum infant formula product in the US through to 6 January 2023 

  • AUB (ASX: AUB) +0.2% upgraded its FY23 profit guidance from $86-91m to $90-92m, representing 21.6-24.3% growth over FY22 

  • Woolworths (ASX: WOW) -3.5% posted 1.8% YoY sales growth to $16.4bn and noted “early signs of customer purchasing habits changing” 

  • Ingenia Communities (ASX: INA) -4.1% acquired development projects in Melbourne and Cairns, with the potential for a combined 425 additional land lease homes 

  • Lendlease (ASX: LLC) -8.7% said it expects FY23 return on invested capital to be at the lower end of its guidance range across its investments, development and construction segments 

Mid-to-small caps

  • MA Financial (ASX: MAF) +5.8% posted $733m in fund inflows in 2H22, up 36% compared to the prior period and reaffirmed its FY22 guidance of 30-40% EPS growth  

  • Talga Group (ASX: TLG) +4.5% advises its hearing with the Swedish Land and Environment Court for its Vittangi Graphite Project mine environmental permit will take place on 30 January 2023 

  • Neometals (ASX: NMT) +3.1% successfully trialed commercial-scale smelting of mineral concentrate from its Barrambie Project to produce a premium quality chloride grade titanium slag

  • Estia Health (ASX: EHE) -0.5% notes that spot occupancy for its mature home portfolio was 92.3% at 31 October compared to 90.6% in 2H22 

  • Leo Lithium (ASX: LLL) -6.5% hit high grade spodumene pegmatite intercepts as part of its 2022 resource drilling program at the Goulamina Lithium Project 

  • Bravura Solutions (ASX: BVS) -52.1% downgraded its FY23 earnings guidance to $10-15m compared to analyst expectations of $49m 

Broker updates 





Target price


Aristocrat Leisure



$42.70 from $40.20


Domino's Pizza


Neutral from Buy






$16.70 from $17


Goodman Group

Credit Suisse




Rio Tinto

Morgan Stanley




Top Gainers

Code Company Last % Chg
NFL Norfolk Metals Ltd $0.32 +137.04%
HIQ HITIQ Ltd $0.048 +60.00%
BGE Bridge Saas Ltd $0.17 +36.00%
HVM Happy Valley Nutr... $0.085 +32.81%
EMT Emetals Ltd $0.017 +21.43%
View all top gainers

Top Fallers

Code Company Last % Chg
BVS Bravura Solutions... $0.618 -53.04%
WA1 WA1 Resources Ltd $1.45 -27.14%
BRX Belararox Ltd $0.305 -26.51%
IVZ Invictus Energy Ltd $0.105 -22.22%
NSM North Stawell Min... $0.091 -20.87%
View all top fallers

52 Week Highs

Code Company Last % Chg
NFL Norfolk Metals Ltd $0.325 +140.74%
OD6 OD6 Metals Ltd $0.24 +14.29%
GMTL Global X Green Me... $10.14 +2.94%
ISLM HEJAZ Equities Fu... $0.91 +2.25%
PBL Parabellum Resour... $0.515 +1.98%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
BVS Bravura Solutions... $0.618 -53.04%
IVZ Invictus Energy Ltd $0.105 -22.22%
NSM North Stawell Min... $0.091 -20.87%
RBD Restaurant Brands... $7.00 -19.91%
G50 Gold 50 Ltd $0.10 -16.67%
View all 52 week lows

Near Highs

Code Company Last % Chg
VVLU Vanguard Global V... $60.04 -1.86%
NEA Nearmap Ltd $2.07 -0.48%
OBL Omni Bridgeway Ltd $4.555 -0.55%
BILL Ishares Core Cash... $100.51 +0.01%
GLN Galan Lithium Ltd $1.595 +0.95%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
EGH Eureka Group Hold... $0.46 0.00%
CDA Codan Ltd $4.02 +1.77%
FEX FENIX Resources Ltd $0.21 +2.44%
AIS Aeris Resources Ltd $0.30 -3.23%
EZL EUROZ Hartleys Gr... $1.165 -0.85%
View all RSI oversold

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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