Market Wraps

Morning Wrap: ASX 200 set to fall, iron ore hits 9-month high, BHP and Coles earnings preview

Tue 21 Feb 23, 8:26am (AEST)

ASX 200 futures are trading 29 points lower, down -0.40% as of 8:20 am AEDT.

The US market was closed for President's Day, China leaves interest rates unchanged but signals more economic support, iron ore rallies to levels not seen since June 2022, sell-side analysts remain bearish and market expectations for BHP and Coles' half-year results.

Let's dive in.

Overnight Summary

Tue 21 Feb 23, 8:26am (AEST)

Name Value Chg %
Major Indices
S&P 500 4,079 -0.28%
Dow Jones 33,827 +0.39%
NASDAQ Comp 11,787 -0.58%
Russell 2000 1,946 +0.21%
Country Indices
Canada 20,515 -0.44%
China 3,290 +2.06%
Germany 15,478 -0.03%
Hong Kong 20,720 -1.28%
India 60,692 -0.51%
Japan 27,513 0.00%
United Kingdom 8,014 +0.12%
Name Value Chg %
Commodities (USD)
Gold 1,840.40 -0.09%
Iron Ore 124.94 -
Copper 4.114 -1.24%
WTI Oil 76.34 -2.74%
AUD/USD 0.6912 +0.49%
Bitcoin (AUD) 35,885 +0.41%
Ethereum (AUD) 2,466 +0.49%
US 10 Yr T-bond 3.828 -0.39%
VIX 21 +5.26%


  • US markets were closed in observance of President’s Day

  • JPMorgan says stock market rally will fade (Bloomberg)

  • Goldman strategists see 24% jump in China stocks by year-end (Bloomberg)

  • Oil gains after weekly loss as China recovery competes with Fed (Bloomberg)


  • Meta launches paid subscription service for Facebook, Instagram (FT)


  • UK data suggests recession to be better than feared (FT)

  • PBOC leaves rates unchanged, analysts bet on more easing (Bloomberg)

  • Taiwan export orders fall softened by rebound in phone demand (Bloomberg)

  • RBNZ set to lift cash rate to 4.75% and signal more hikes (AFR)

  • Riksbank says further rate hikes very desirable (Minutes)

  • China's mortgage rate cuts spur pre-payment rush (Reuters)

Deeper Dive

Our ETF table consists of US-listed ETFs, so it won't be appearing in today's Wrap.

Iron ore powers ahead

Iron ore has powered to levels not seen since June 2022.

Data from China is not yet bullish but showing signs of stabilisation, after home prices in January increased for the first time in 16 months. Investors are optimistic that the Chinese government will unleash further stimulus measures, most notably at its National People's Congress meeting in early March.

Iron ore futures
Singapore iron ore futures weekly chart (Source: TradingView)

Still, iron ore miners have been relatively reserved after the massive November to January resurgence. Names like BHP, Rio Tinto and Fortescue have mostly been trading sideways for the past month. Are they setting up for a breakout?

FMG chart
Fortescue daily chart (Source: TradingView)

Earnings preview

Heavyweights BHP (ASX: BHP) and Coles (ASX: COL) are due to report their half-year results today, so here's a preview of what the market expects from them.


  • Revenue of $21.4 billion

  • EBIT of $1.02 billion

  • Net profit of $571 million

  • Dividend of 34 cents per share


  • Revenue of $25.6 billion

  • Underlying EBITDA of $13.9 billion

  • Net income (ex items) of $6.8 billion

  • Total dividend per share of 88 cents per share

  • Net debt of $5.2 billion

Research Highlights

It's been a year (so far) of sell-side analysts being left bruised and spooked by the equity market's falls in 2022. The ultimate bull of 2022, Marko Kolanovic of JP Morgan, has conceded he sees a 5-10% correction in the NASDAQ for 2023. Morgan Stanley's Mike Wilson, who was the ultimate bear of 2022, keeps his title as he calls for a 20% correction in the S&P 500.

Then, there's Michael Hartnett of Bank of America who now believes we could see a 400-point drop in the S&P 500 over the next two weeks. The biggest pain, in his view, will be felt by home-building/property-linked stocks, banks, and the semiconductors. If Hartnett is right, that will validate Warren Buffett's "trade" on TSMC.

Reporting Season (So Far)

Most of the major houses are still sticking to their guns. For instance, Macquarie continues to undercut the consensus believing there is a very slim chance of a new bull market for stocks given all this central bank tightening.

But Richard Schellbach of UBS had a different view, arguing we are seeing signs of earnings "exhaustion" which explains all those downgrades.

"The downward skew to revisions is clearly observable for both FY23 and FY24, and reflects an analyst community that sees an economy past its peak and signs of earnings exhaustion."

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Challenger (CGF) – $0.12, Endeavour Group (EDV) – $0.143, US Student Housing REIT (USQ) – $0.016, Computershare (CPU) – $0.30, IPH (IPH) – $0.155, Magellan Financial Group (MFG) – $0.469

  • Dividends paid: None

  • Listing: None

Economic calendar (AEDT):

  • 9:00 am: Australia Manufacturing and Services PMI

  • 11:30 am: RBA Meeting Minutes

  • 9:00 pm: Germany Economic Sentiment Index

  • 12:30 am: Canada Inflation Rate

Written By

Hans Lee

Senior Editor

Hans is one of the Senior Editors at Livewire Markets and Market Index. He created Signal or Noise and leads the team's coverage of the global economy and fixed income markets.

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