Market Wraps

Morning Wrap: ASX 200 to ease, S&P 500 and Nasdaq fall as yields soar to nine month high

Wed 08 Jan 25, 8:49am (AEDT)

ASX 200 futures are trading 10 points lower, down 0.12%, as of 8:30 am AEDT.

Yields are too damn high! Major US benchmarks dipped overnight as bond yields continued to climb into worrisome territory, Nvidia releases its latest gaming chips for PCs which use the same architecture as its AI processes for data centres, oil prices ticked higher overnight on Middle East tensions and Aussie inflation data is due at 10:30 am AEDT.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 intraday
S&P 500 lower, finished near worst levels (Source: TradingView)

OVERNIGHT MARKETS

Our data tables are experiencing some issues this Morning. We will look to re-add them shortly.

  • S&P 500 -1.11%, Nasdaq -1.79%, Dow -0.42%, Russell 2000 -0.72%

  • Major US benchmarks finished lower and near worst levels

  • Technology stocks led to the downside amid soaring yields, yesterday's winners turned to today's losers (Nvidia -6.2%, Tesla -4.0%, Amazon -2.4%)

  • Today’s big story – US 10-year Treasury yield jumps to 4.68%, the highest level since last April and up 110 bps since last September

  • Treasury yield curve has experienced six straight weeks of steepening (or 17 of the last 22 trading days) as longer-term rates are pulling up the curve – This tells us that the bond market is worried about inflation expectations

  • Spread between the S&P 500’s forward earnings yield and the US 10-year yield has reached a fresh 23-year low

  • Bottom line – A new leg up for equities seems unlikely without the support of falling  yields

  • Gold pares gains as US data affirm Fed’s cautious rate-cut path, China’s central bank added to gold reserves for a second month (BBG)

STOCKS

  • Getty Images and Shutterstock shares surge more than 20% on definitive merger agreement, creating a premier visual content company (RT)

  • Nvidia releases gaming chips for PCs that use the same Blackwell architecture underpinning its fastest AI processes for data centres (CNBC)

  • Moderna shares surge 14% after US confirmed its first human death relating to bird flu (FT)

  • Tesla shares ease on BofA downgrade, citing high valuation and risks to EV maker’s strategy (CNBC)

CENTRAL BANKS

  • Major central banks in December delivered the biggest annual policy easing push in 15 years (RT)

  • Fed’s Bostic expects inflation to decline but warns Fed to be cautious, may have to keep rates higher for longer to quell inflation (BBG)

ECONOMY

  • Eurozone inflation accelerates to 2.4% in December but in-line with market expectations amid higher energy costs and stubbornly high services (RT)

  • UK 30-year borrowing costs rise to the highest since 1998 (RT)

  • US ISM services PMI accelerated in December to 54.1, up from 52.1 in November and above 53.3 consensus amid strong demand, however the prices paid measure hit the highest since February 2023 (RT)

  • US job openings unexpectedly increased in November, up to 8.09m vs. 7.83m in October and well-above market forecasts of 7.7m (RT)

ASX TODAY

  • ASX 200 set to snap a four-day winning streak after a heavy overnight session

  • Australian inflation data due at 10:30 am AEDT. The market is expecting the monthly CPI indicator to tick up to 2.2% in November, from 2.1% in October

WHAT TO WATCH TODAY

  • Technology was a big winner on Tuesday, up 1.46% but likely to lead to the downside as soaring yields dampens appetite for risk-assets and growthy pockets of the market

  • Iron ore stocks were under significant pressure on Tuesday, with Fortescue down 4.4% to a fresh four-month low. While iron ore prices held up overnight (+0.15% to US$97.7) other commodities (and related ETFs) such as nickel, uranium and copper continued to falter

  • Energy was a slight bright spot amid escalating tensions in the Middle East, Trump said "if those hostages are not back by the time I get into office, all hell will break out in the Middle East."

BROKER MOVES

We're still smoothing out some gaps in our broker data. Thanks for hanging in there while we get everything sorted.

Key Events

Stocks trading ex-dividend: 

  • Wed 8 Jan: Katana Capital (KAT) – 0.40%

  • Thu 9 Jan: Turners Automotive Group (TRA) – 1.32%

  • Fri 10 Jan: None

Other ASX corporate actions today: 

  • Dividends paid: Premier Investments (PMV)

  • Listing: None

  • Earnings: None

  • AGMs: None

Economic calendar (AEDT):

  • 10:30 am: Australia Monthly CPI Indicator (Nov)

  • 5:00 am: US FOMC Minutes 

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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