Market Wraps

Morning Wrap: ASX 200 futures flat, S&P 500 highest since January 2022 + US inflation slows

Wed 13 Dec 23, 8:36am (AEDT)

ASX 200 futures are trading 3 points higher, up 0.04% as of 8:20 am AEDT.

The S&P 500 set a fresh year-to-date high and ended at its highest level since January 2022, US headline inflation edged lower while core inflation remained unchanged at 4.0% in November, WTI crude tumbles on oversupply fears and back below US$70 a barrel and Oracle shares sell off as cloud revenue growth misses expectations.

Let's dive in.

Overnight Summary

Wed 13 Dec 23, 8:26am (AEDT)

Name Value % Chg
Major Indices
S&P 500 4,644 +0.46%
Dow Jones 36,578 +0.48%
NASDAQ Comp 14,533 +0.70%
Russell 2000 1,881 -0.12%
Country Indices
Canada 20,234 -0.42%
China 3,003 +0.40%
Germany 16,792 -0.02%
Hong Kong 16,375 +1.07%
India 69,551 -0.54%
Japan 32,844 +0.16%
United Kingdom 7,543 -0.03%
Name Value % Chg
Commodities (USD)
Gold 1,995.4 -0.07%
Iron Ore 135.16 -0.21%
Copper 3.7945 +0.26%
WTI Oil 68.7 -3.85%
AUD/USD 0.6561 -0.09%
Bitcoin (AUD) 62,959 +0.90%
Ethereum (AUD) 3,337 -0.53%
US 10 Yr T-bond 4.206 -0.78%
VIX 12.08 -4.35%

US Sectors

Wed 13 Dec 23, 8:27am (AEDT)

Information Technology +0.83%
Financials +0.71%
Materials +0.57%
Health Care +0.47%
Industrials +0.46%
Consumer Discretionary +0.40%
Consumer Staples +0.31%
Communication Services +0.20%
Real Estate -0.05%
Utilities -0.41%
Energy -1.35%


S&P 500 intraday
S&P 500 higher, finished near best levels (Source: TradingView)


  • S&P 500 higher, finished near best levels and marks highest close since Jan 2022

  • Choppy session for yields, US 2-year 2 bps higher, up from session low of -7 bps

  • WTI crude settles 3.7% lower, undercuts recent low to fresh 5-month low

  • Wall Street eyes waning cash pile with anxiety after short-term financing markets saw three-day spike in interest rates (Reuters)

  • Big inflows into high-yield bond ETFs in November on improved risk appetite (FT)

  • Swap traders cut expectations for Fed to aggressively cut rates in 2024, now see 108 basis points of cuts in 2024 (Bloomberg)

  • 2023 IPOs delivered lacklustre returns but 2020-21 IPOs have slumped (Bloomberg)

  • January natural gas plummets below US$2.50 amid negative weather (NGI)

  • Copper supply looking scarce as Panama closure, Anglo American cuts have upended 2024 outlook (Bloomberg)


  • Oracle Q2 sales below expectations as cloud revenue growth slows (Bloomberg)

  • Ford cutting planned 2024 production of electric F-150 Lighting in half (CNBC)

  • Google loses antitrust lawsuit brought by Fortnite maker Epic (Reuters)

  • AstraZeneca to buy vaccine developer Icosavax for ~US$1.1bn (Reuters)

  • Hasbro announced plans to lay off 1,100 workers as the company struggles with soft sales into the holiday shopping period (CNBC)


  • Consensus looks for BOJ to remain on hold next week but expectations beginning to shift to a January move (Nikkei)

  • ECB must cement its QT plans to avoid confusing markets (Bloomberg)


  • US Commerce Secretary Raimondo vows "strongest possible" response to Huawei chip breakthrough (Bloomberg)

  • Geopolitical risk biggest market concern heading into 2024 (Bloomberg)

  • Biden alludes to disagreements with Israeli PM Netanyahu (Reuters)

  • Japan political crisis shaping up to be the biggest since 1988 (Nikkei)


  • US headline and core inflation remain unchanged year-on-year, in-line with market expectations, sustain Fed’s rate push (Bloomberg)

  • German investor morale up in December on ECB expectations (Reuters)

  • UK wage growth slowed at sharpest pace in almost two years (Bloomberg)

  • Japan wholesale inflation falls to lowest since early 2021 (Bloomberg)

  • Australian business confidence slides to pandemic lows, consumer sentiment edges higher (Bloomberg)

  • Global trade to drop ~5% this year as geopolitical headwinds mount (Bloomberg)

Industry ETFs

Wed 13 Dec 23, 8:27am (AEDT)

Name Value % Chg
Uranium 29.08 +1.22%
Silver 20.845 -0.31%
Steel 68.97 -0.61%
Copper Miners 34.67 -0.80%
Lithium & Battery Tech 47.065 -1.43%
Gold Miners 28.85 -2.37%
Strategic Metals 54.69 -2.74%
Global Jets 18.64 +1.08%
Agriculture 21.85 +0.64%
Construction 59.14 +0.56%
Aerospace & Defense 123.82 +0.28%
Biotechnology 126.13 +1.09%
Cannabis 5.465 -4.46%
Name Value % Chg
Bitcoin 20.38 +0.89%
Hydrogen 6.33 -1.86%
CleanTech 9.51 -2.26%
Solar 44.5299 -2.79%
Video Games/eSports 55.7 +0.87%
Cloud Computing 21.36 +0.75%
Semiconductor 543.55 +0.72%
Cybersecurity 28.46 +0.57%
Robotics & AI 26.98 +0.52%
Sports Betting/Gaming 16.4 +0.43%
FinTech 23.59 +0.43%
Electric Vehicles 23.37 -0.47%
E-commerce 19.9765 -0.56%

US November CPI: Good Ease, Services Stick

The November inflation print was largely in-line with market expectations:

  • Headline inflation eased to 3.1% year-on-year, in-line with expectations and down from 3.2% in October. This marks the lowest reading since June 2023

  • Headline inflation rose 0.1% month-on-month, above expectations of no change

  • Core inflation was unchanged at 4.0%, in-line with expectations

  • Core inflation rose 0.3% month-on-month, in-line with expectations

"The slightly stronger than expected headline growth in inflation largely reflected a softer-than-expected decline in energy prices. We had expected energy to fall 3.5% MoM but instead it fell by 2.3% MoM," said Bank of America.

"Core good prices fell 0.3% MoM, its six consecutive monthly decline. ... Excluding used cars, core goods fell by 0.6% MoM, its largest decline since April 2020."

Here are some of the key takeaways from the inflation print:

  • An unlikely pivot: Powell has often pointed to "core services ex-housing inflation" as the "most important category to watch. The data was up 5.3% year-on-year in November, well above headline numbers and more than double the Fed's inflation target.

  • Shelter momentum: Shelter accounts for more than a third of headline inflation. Its been falling on a year-on-year basis for eight consecutive months, from a peak of 8.2% in March to 6.5% in November. Given its lag vs. real-time data, it is widely forecast to move lower and lead to further declines in inflation.

  • Food prices are down: Food at home prices rose 1.7% year-on-year, marking the 15th consecutive month of deceleration to the lowest since June 2021.

  • Sticky services: Services inflation re-accelerated from 5.05% in October to 5.16% in November.

  • The bottom line: Inflation continues to cool in many areas, offset by sticky service prices. The economy remains on the path of lower inflation but as always, it's not going to be a straight line down.

Sectors to Watch

A bit of a quiet one for our ETF list. Here are a few sectors of interest.

Uranium: The US House of Representatives passed a ban on imports of low-enriched uranium from Russia on Tuesday. The only name this affects is Silex Systems (ASX: SLX), which I think is the only enrichment-related uranium play on the ASX.

Lithium: Lithium prices in China are falling again, with the most active Guangzhou futures down more than 8% to hit limit downs on Tuesday. A household name like Pilbara Minerals (ASX: PLS) finished 2.8% lower yesterday. If the recent rally was genuine, the market should defend current price levels. Otherwise, you might have to wonder ... is another low on the cards?

Oil: Oil forecasts have now flipped, with forecasts showing a significantly oversupplied market for 2024. Energy was the worst performing S&P 500 sector overnight. Does this spell more weakness for names like Woodside (ASX: WDS)?

Source: RBC Capital Markets

The Magnificent Rotation

Some food for though about yesterday's session. The S&P 500 managed to hit another fresh 52-week high despite:

  • All Magnificent 7 members falling more than 1%

  • Fed rate cut expectations being pushed back to May 2024

  • VIX edging slightly higher

It's an interesting rotation from the seven stocks that carried the market earlier this year to everywhere else.

Currently, approximately 65% of S&P 500 stocks are trading above their 200-day moving average compared to 74% in July. But the chart below shows a rather powerful breadth thrust from November lows. One way to interpret this data is that the rally has more upside to go as market participation broadens. But what'll happen when breadth reaches the previous tops?

S&P 500 price chart and breadth (Source: Barchart)

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: None

  • Dividends paid: Cobram Estate Olives (CBO) – $0.03

  • Listing: None

Economic calendar (AEDT):

  • 6:00 pm: UK GDP (Oct)

  • 12:30 am: US Producer Price Index (Nov)

  • 6:00 am: Fed Interest Rate Decision

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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