Market Wraps

Morning Wrap: ASX 200 futures flat, US markets closed + BHP, Mader and Hub24 results

Tue 20 Feb 24, 8:39am (AEST)

ASX 200 futures are trading 2 points higher, up 0.02% as of 8:30 am AEDT.

The US market was closed overnight for Presidents Day, the Pan-European STOXX 600 hit its highest in over two years, Goldman Sachs upgrades its S&P 500 target a second time, commodity prices ease as China returns from a week-long holiday, a lithium squeeze fails to take off, Citi's first take on Westpac's bumper first quarter update and a long list of companies are due to report this morning.

Let's dive in.

Overnight Summary

Tue 20 Feb 24, 8:32am (AEDT)

Name Value % Chg
Major Indices
S&P 500 5,006 -0.48%
Dow Jones 38,628 -0.37%
NASDAQ Comp 15,776 -0.82%
Russell 2000 2,033 -1.39%
Country Indices
Canada 21,256 +0.16%
China 2,911 +1.56%
Germany 17,092 -0.15%
Hong Kong 16,156 -1.13%
India 72,708 +0.39%
Japan 38,470 -0.04%
United Kingdom 7,729 +0.22%
Name Value % Chg
Commodities (USD)
Gold 2,029.4 +0.26%
Iron Ore 129.29 -
Copper 3.813 -0.66%
WTI Oil 79.29 +0.13%
AUD/USD 0.654 +0.12%
Bitcoin (AUD) 79,180 -0.01%
Ethereum (AUD) 4,490 +3.85%
US 10 Yr T-bond 4.295 -
VIX 14.71 +3.30%


STOXX Intraday
STOXX 600 picks up the pace to finish at best levels (Source: TradingView)


Note: The US market was closed overnight for Presidents Day. All US-related data (major benchmarks, yields) refer to last Friday's session.

  • ASX 200 futures pointing to a flat start

  • Companies due to report today include Ansell, ARB Corp, BHP, Charter Hall, Coronado Global, Hub24, Judo Capital, Link Group, McMillan Shakespeare, Monadelphous Group, Megaport, Northern Star and more

  • BHP reports 1H24 adjusted EBITDA of $13.2bn ($14.0bn consensus), EPS of $1.27 ($1.31 consensus) and interim dividend of $0.72 per share (Macquarie est of $0.68)

  • A2 Milk smashed earnings expectations on Monday but brokers including CLSA, Morgans, Wilsons and Citi downgraded their ratings (but raised target prices)

  • Bendigo & Adelaide Bank downgraded to Hold from Buy at Jefferies but target price unchanged at $10.00 

  • Bluescope Steel downgraded to Neutral from Overweight at JPMorgan and target price cut to $23.00 from $24.00

  • Chalice Mining initiated Speculative Buy at Argonaut Securities with a $2.2 target price

  • GWA Group downgraded to Neutral from Overweight at JPMorgan but target price increased to $2.70 from $2.65

  • Lendlease downgraded to Neutral from Outperform at JPMorgan and target price cut to $7.50 from $9.00

  • Reliance Worldwide upgraded to Overweight from Neutral at Jarden and target price increased to $5.30 from $4.10 

  • Westpac Bank upgraded to Overweight from Neutral at Barrenjoey and target price increased to $26.00 from $22.00 


  • Europe’s benchmark stock index hit a two-year high on strength in healthcare stocks

  • Pan-European STOXX 600 finished near best levels and up for a fourth straight session

  • Trading volumes in most overnight markets were light as the US markets shut for a public holiday

  • European Basic Resources sector fell 1.0% amid a broad-based pullback across key commodities (copper, iron ore etc.) after China held key rates on medium-term loans steady

  • S&P 500 reclaimed record high but companies increasingly striking cautious tone on profit outlooks (Bloomberg)

  • Easy financial conditions, bullish options activity and waning hedging prompting 'peak euphoria' talk (Bloomberg)

  • Goldman Sachs raises year-end S&P 500 target to 5200, citing increased profit estimates (Bloomberg)

  • Hedge funds reap big gains after ramping up bets on Nvidia (FT)

  • Investors shun riskiest US corporate bonds on default fears (FT)

  • US natural gas prices fall to lowest in almost three decades (FT)


  • BoE's Chief Economist Pill wants more evidence of fading prices (Reuters)

  • RBA Board Member says bank could cut rates before inflation hits target (The Australian)


  • NATO members talk privately about a Russian attack on one of them as doubts over US role grow (Bloomberg)

  • Biden pins blame for Russian battlefield victory on Congress inaction (FT)

  • US says it will act if China tries to ease its industrial overcapacity problem by dumping goods on global markets (FT)

  • China's foreign minister Wang tells Blinken US should lift sanctions on Chinese firms (Reuters)

  • Russian opposition leader Alexei Nalvany dies in prison, Biden mulling possible further actions against Moscow (NY Times)


  • China Lunar New Year spending surpasses pre-pandemic levels (Reuters)

  • PBOC leaves medium-term lending facility rate unchanged as expected and makes little change to liquidity (Bloomberg)

  • Foreign direct investment in China fell to 30-year low in 2023 as lockdowns, weak growth and geopolitical tensions deter global capital inflows (Bloomberg


  • Stronger than expected US January economic data challenges soft landing narrative (Yahoo Finance)

  • German companies flock to US with record pledges of capital investment (FT)

  • Japan machinery orders rise in December but Q4 negative again (Reuters)

Not So Squeezy

Yesterday's Morning Wrap noted speculation that Chinese battery maker CATL had closed its Jianxiawo mine that produces approximately 3% of global supply.

Barrenjoey analysts noted that CATL is reluctant to continue production below 95,000 yuan (US$13,000) a tonne, which would move the market from a 1% surplus to a 2% deficit in 2024.

"If confirmed that Jianxiawo has shut, and that the shut is on economic grounds rather than temporarily for Chinese New Year, it's an important step in the necessary market rebalancing that we are looking for," said Melbourne-based Shaw, Reuters reported.

Chinese markets reopened on Monday after a week-long holiday. Given the above, lithium prices should have soared.

Instead, Chinese lithium carbonate prices on the Guanzhou Futures Exchange fell 2.5% to 94,750 yuan a tonne. This suggests the above news was already priced in or simply fake news.

A bellwether name like Pilbara Minerals (ASX: PLS) rallied 4.3% in early trade but finished the session 2.4% lower.

PLS 2024-02-20 08-00-40
Pilbara Minerals intraday chart for Monday, 19 February (Source: TradingView)

Citi's take on Westpac

Citi's first take on Westpac (ASX: WBC) was mentioned in yesterday's Evening Wrap. But we'll highlight this again as it was pretty extraordinary to see a $85 billion market cap bank rally 2.7% on a first quarter update.

  • "The strong quarterly net profit, ex notables, has been largely driven by strong Markets & Treasury revenue which appears to be ~12% higher compared to 2H23 quarterly average."

  • "Investors should also be pleased with the core NIM at 1.80%, down only 1 bp as mortgage pricing headwinds ease," this was also viewed as better than consensus

  • Resilient NIM plies a decline in the spread between front-book and back-book mortgage pricing and/or that deposit headwinds are not as strong in the December quarter compared to peers

  • "WBC’s 1Q24 CET 1 of ~12.3% was ~25bpts better than Citi’s expectations (12.06%), driven by an unexpected fall in both credit and IRRBB RWAs."

  • "After a weak 2H23 result, a better than expected 1Q24 profit, ex notables, is likely to be reassuring for investors ... WBC’s underlying performance has stablised and arguably has marginally improved in the current challenging market conditions."

Imdex Earnings Call Q&A

Imdex (ASX: IMD) specialises in drilling, data analytics and software solutions for the mining industry. The stock rallied 17.5% after reporting better-than-expected first-half revenue and earnings. Numbers aside, here are some of the interesting highlights from its earnings call Q&A.

  • Demand expected to remain steady on a pcp basis for the next 6-12 months

  • Improvement seen in being down 9% to now only being down 5%, but it does remain down on pcp

  • Cobalt, nickel and lithium collectively are less than 15% of business; no significant adverse impact expected from shifts in these markets

  • Strong cash conversion due to unwind of inventory build and product rationalisation; supply chains better positioned today than two years ago

  • Expectation for digital business revenues to become meaningful enough for separate reporting by FY25, potentially around when they constitute ~5% of revenue

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Wesfarmers (WES) – $0.91, Challenger (CGF) – $0.13, Vicinity Centres (VCX) – $0.058, Computershare (CPU) – $0.40, Magellan Financial (MFG) – $0.29, Domain Holdings (DHG) – $0.02

  • Dividends paid: Centuria Capital (CNI) – $0.05 

  • Listing: Metals Acquisition (MAC) at 12:00 pm

Economic calendar (AEDT):

  • 11:30 am: RBA Meeting Minutes

  • 12:30 am: Canada Inflation Rate (Jan)

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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