Market Wraps

Morning Wrap: ASX 200 flat, S&P 500 closes above 5,000 for first time + Audinate, Carsales results

Mon 12 Feb 24, 8:34am (AEDT)

ASX 200 futures are trading flat as of 8:20 am AEDT.

The S&P 500 closed above the key 5000 level for the first time, Nvidia shares rally another 3.6% (up 32% in the past month), oil prices are on a five-day win streak, leading US-listed BNPL company Affirm sold off on solid results and keep an eye out for first-half FY24 results from Audinate, Beach Energy and Car Group.

Let's dive in.

Overnight Summary

Mon 12 Feb 24, 8:24am (AEDT)

Name Value % Chg
Major Indices
S&P 500 5,027 +0.57%
Dow Jones 38,672 -0.14%
NASDAQ Comp 15,991 +1.25%
Russell 2000 2,010 +1.53%
Country Indices
Canada 21,010 +0.43%
China 2,866 +1.28%
Germany 16,927 -0.22%
Hong Kong 15,747 -0.83%
India 71,595 +0.23%
Japan 36,897 +0.09%
United Kingdom 7,573 -0.30%
Name Value % Chg
Commodities (USD)
Gold 2,038.7 -0.45%
Iron Ore 128.75 +1.35%
Copper 3.6815 -0.70%
WTI Oil 76.84 +0.55%
Currency
AUD/USD 0.6524 +0.52%
Cryptocurrency
Bitcoin (AUD) 73,832 +0.25%
Ethereum (AUD) 3,838 -0.37%
Miscellaneous
US 10 Yr T-bond 4.187 +0.41%
VIX 12.93 +1.09%

US Sectors

Mon 12 Feb 24, 8:24am (AEDT)

SECTOR % CHG
Information Technology +1.50%
Consumer Discretionary +0.99%
Communication Services +0.74%
Utilities +0.42%
Financials +0.32%
Real Estate +0.28%
SECTOR % CHG
Materials +0.26%
Industrials +0.12%
Health Care -0.05%
Consumer Staples -0.85%
Energy -1.56%

S&P 500 SESSION CHART

S&P 500 intraday
S&P 500 higher and finished at best levels (Source: TradingView)

ASX TODAY

  • ASX 200 futures point towards another flattish open

  • Stocks due to report on Monday include: Audinate, Aurizon, Beach Energy, Car Group and JB Hi-Fi

  • Breville consensus for 1H24 earnings include $944m revenue and $85.5m NPAT

  • Seek consensus for 1H24 earnings include $615m revenue and $121.5m NPAT (cont ops)

  • Boral smashed earnings expectations last Friday, analysts from Jarden and CSLA have mixed ratings but upgrade the share price to $5.80 and $6.40 respectively

  • Liontown Resources rallied 10.4% last Friday after minimum bid requirements expired in regards to Rinehart's acquisition of a 19.9% stake (The Australian)

  • Myer looking to sell Sass & Bide, Marcs and David Lawrence (AFR)

  • Carlyle, Hibiscus Petroleum and Jadestone Energy are the final contenders to acquire Woodside’s Macedon oil and gas assets, valued at around $500m (The Australian)

MARKETS

  • S&P 500 higher, finished at best levels and closed above the 5000 for the first time in history

  • S&P 500 and Nasdaq both higher last week, up for a 14th week in the past 15

  • Russell 2000 outperformed but remains a big year-to-date laggard

  • Oil staging a comeback after logging a five-day win streak, up 5.9%

  • Bullish focus points for the week – Resilient US growth backdrop with Atlanta Fed GDPNow estimate for 1Q24 at 3.4%, AI proliferation, restructuring and cost cutting announcements attracting a positive view for margins and renewed China bounce

  • Bearish focus points for the week – Yields continue to grind higher, Fedspeak continues to tilt towards hawkish, market breadth concerns, regional banks under pressure and China deflation 

  • S&P 500's forward PE ratio looking lofty, raising doubts over the market rally (Reuters)

  • Historical trends suggest S&P could see double-digit returns (FT)

  • Global buybacks rebounding amid improving profit growth (Bloomberg)

  • Record cash piles at big tech firms paves way for capital return (Bloomberg)

EARNINGS

S&P 500 Q4 EPS growth currently sits at 2.9% compared to the 1.5% expected at the beginning of earnings season. Here are some aggregated numbers for the 67% of S&P 500 companies that have reported:

  • 75% have beaten consensus EPS expectations, below the five-year average of 77%

  • 65% have beaten consensus revenue expectations, below the five-year average of 68%

  • Earnings beats are 3.8% above expectations, below the five-year average of 8.5%

  • Revenue beats are 1.2% above expectations, below the five-year average of 2.0% 

CENTRAL BANKS

  • Fed still set to cut rates this year despite strong labor market, immigration-led GDP tailwind (FT)

  • ECB's Kazaks says hopes for cuts at one of the next two meetings might be too aggressive (Bloomberg)

  • ECB's Villeroy says will likely lower interest rates in 2024 as the pace of price increases eases toward 2% by next year (Bloomberg)

  • BoE's Haskel wants more evidence of waning inflation before voting for a cut (Reuters)

  • RBA Governor Bullock not ruling out more hikes, but leaves door open to cut (Reuters)

GEOPOLITICS

  • Biden eyes ban on Chinese smart cars, citing data security fears (Bloomberg)

  • Biden seeks to crack down on Iranian crude without disrupting global markets (Bloomberg)

  • US lawmakers urge commerce department to add Tiktok owner ByteDance to an export control list (Reuters)

CHINA

  • China's real estate crisis starts to ripple across the world (Bloomberg)

  • China equity flows turn positive but likely driven by state-backed offshore arms (FT)

  • China unleashes loan flood to rescue sputtering economy, January sees record high borrowing (Reuters)

  • PBOC says it will keep policy support flexible and precise (Reuters)

Industry ETFs

Mon 12 Feb 24, 8:25am (AEDT)

Name Value % Chg
Commodities
Strategic Metals 48.09 +1.35%
Lithium & Battery Tech 41.84 +0.36%
Steel 69.8842 +0.33%
Silver 20.68 +0.15%
Uranium 29.77 -0.77%
Gold Miners 26.97 -1.21%
Copper Miners 34.61 -1.23%
Industrials
Construction 64.9844 +0.42%
Agriculture 22.14 +0.36%
Global Jets 19.7 +0.36%
Aerospace & Defense 124.66 +0.17%
Healthcare
Biotechnology 134.59 +0.25%
Cannabis 5.11 -0.39%
Name Value % Chg
Cryptocurrency
Bitcoin 22.54 +4.45%
Renewables
Solar 45.49 +3.15%
CleanTech 9.45 +1.18%
Hydrogen 5.92 +0.51%
Technology
Cybersecurity 31.64 +2.43%
Cloud Computing 23.47 +2.35%
Semiconductor 629.43 +1.99%
Robotics & AI 29.91 +1.84%
Sports Betting/Gaming 18.5 +1.54%
Electric Vehicles 23.85 +1.19%
FinTech 25.15 +1.04%
E-commerce 21.39 +0.71%
Video Games/eSports 60.29 +0.45%

Sectors to Watch

The overnight session was rather uneventful in terms of its impact on the ASX.

Buy now, pay later: The BNPL sector has been on a tear in recent months but the US-listed Affirm hit a wall last Friday. The company's quarterly reported topped revenue and earnings expectations though transaction costs were higher-than-expected. Analysts were cautious on the guidance (which was also a beat). The stock finished the session down 10.9%. Block also down 2.8%. Could this see some negative flow for names like Zip and Humm?

Tech: Tech was the best performing sector on Wall Street thanks to gains from Nvidia (+3.6%), Amazon (+2.7%) and Alphabet (+2.0%). Local names are starting to push out, including Wisetech (near 6-month high), Altium (near all-time highs) and Life360 (near 3-month high).

Resources: Pretty heavy session for resource-related ETFs, notably Uranium (-0.77%), Gold Miners (-1.2%) and Copper Miners (-1.2%). SPDR Energy and Materials also down -1.5% and -0.1% respectively.


Why We're Far From a Bubble

"At this point, valuations at the top are no where near as frothy as they were at the height of the Dot Com Bubble. The 5 largest stocks traded at 43x Fwd PE in March ‘00, a 59% premium to the Mag 7’s current multiple of 27x," says Goldman Sachs.


Happy Lunar New Year!

Carson Investment Group has grabbed the average annual S&P 500 return based on The Chinese Zodiac Signs. Dragons appear to have relatively average returns but higher 83.3% of the time! I'll try run the numbers for the ASX today.

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Source: Carson Investment Research

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Bailador Technology Investments (BTI) – $0.035 

  • Dividends paid: None

  • Listing: None

Economic calendar (AEDT):

No major economic announcements. 

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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