Market Wraps

Morning Wrap: ASX 200 to fall, iron ore slumps to US$100, Microsoft and Alphabet jump on earnings

Wed 26 Apr 23, 8:31am (AEST)

ASX 200 futures are trading 38 points lower, down -0.52% as of 8:20 am AEDT.

Major US benchmarks slumped on weak earnings and fears of an economic slowdown, Alphabet and Microsoft shares surge after hours on better-than-expected earnings, First Republic shares almost halve amid US$100bn worth of deposit outflows, iron ore prices fell for a sixth straight session to US$100 a tonne, lithium stocks continued to sell off after a bounce on Monday and how does the ASX 200 historically perform in the month of April?

Let's dive in.

Overnight Summary

Wed 26 Apr 23, 8:31am (AEST)

Name Value Chg %
Major Indices
S&P 500 4,072 -1.58%
Dow Jones 33,531 -1.02%
NASDAQ Comp 11,799 -1.98%
Russell 2000 1,746 -2.40%
Country Indices
Canada 20,440 -1.15%
China 3,265 -0.32%
Germany 15,872 +0.05%
Hong Kong 19,618 -1.71%
India 60,131 +0.12%
Japan 28,620 +0.09%
United Kingdom 7,891 -0.27%
Name Value Chg %
Commodities (USD)
Gold 2,007.10 +0.13%
Iron Ore 117.60 -
Copper 3.854 +0.16%
WTI Oil 77.19 +0.16%
AUD/USD 0.6627 +0.00%
Bitcoin (AUD) 42,668 +3.30%
Ethereum (AUD) 2,821 +2.06%
US 10 Yr T-bond 3.396 -3.39%
VIX 19 +11.07%

US Sectors

Wed 26 Apr 23, 8:31am (AEST)

Sector Chg %
Utilities -0.10%
Consumer Staples -0.12%
Real Estate -0.92%
Health Care -1.05%
Communication Services -1.58%
Financials -1.76%
Industrials -1.84%
Energy -1.84%
Consumer Discretionary -2.05%
Information Technology -2.09%
Materials -2.15%


SPX intraday
S&P 500 was flat on Monday but sold off on Tuesday (Source: TradingView) 


Welcome back – Today's Wrap will mainly recap some of the key US earnings that have come through in the last 24 hours.

  • S&P 500 was unchanged on Monday but fell sharply on Tuesday, closing at worst levels

  • Benchmarks were weighed down by earnings from names including logistics (UPS), banks (First Republic) and packaging (Packaging Corp)

  • US 2-year yield falls sharply over the last two sessions, down 23 bps  to 3.95%

  • US stocks face near-term risks of further Fed hikes and weakening earnings (Bloomberg)

  • US retail investors snap up new Treasury bills at a record pace (FT)

  • Hedge funds most short S&P 500 futures since October 2011 (Reuters)

  • Hedge funds placing biggest ever short on benchmark Treasuries (Bloomberg)

  • US debt ceiling seen as an increasing risk for markets with many GOP seemingly prepared to let US default without spending cuts or policy changes (Washington Post)


  • Apple wins appeals court ruling, affirms App Store isn't a monopoly (Bloomberg)

  • Disney begins a second round of layoffs (Reuters)

  • 3M to cut headcount by 6,000 (CNN)

  • Microsoft agrees to stop bundling Teams with Office in Europe (FT)


Note: After hour prices subject to change

Pepsi (+2.3%): Beat both EPS and revenue expectations, net sales rose 10.2% but overall volumes were down 2% across all categories (offset by a 16% increase in prices). 

  • “Organic revenue increased 14.3% and represents our sixth consecutive quarter of double-digit organic revenue growth. Our top-line performance was broad-based across geographies ..." – CEO Ramon Laguarta

Visa (-1.4%): Double beat, net revenues rose 12% amid “stable payment volumes and processed transactions growth” and returned US$bn to shareholders. 

Alphabet (-2.0%, after hours +2.0%): Announced earnings after hours, double beat as advertising sales recover, plans to buy back up to US$70bn of Class A & C shares.

  • On ads: "In Google advertising search and other revenues grew 2% YoY reflecting an increase in the travel and retail verticals offset partially by a decline in finance as well as in media and entertainment.”

  • On Youtube ads: “We saw signs of stabilisation and performance while in network there wasn't incremental pull back in advertising spend.”

  • On cloud spend: "In Q1, we continued to see slower growth of consumption as customers optimised GCP costs, reflecting the macro backdrop, which remains uncertain"

Microsoft (-2.3%, after hours +8.6%): Also released earnings after hours, double beat, all three major segments (PC, software and Azure) beat expectations. 

General Motors (-4.0%): Double beat, raised full year earnings expectations but lowered its guidance for net income attributable to shareholders due to US$875m in special charges related to a previously announced employee buyout program.

UPS (-10.0%): Net income fell 17.7%, revenue was down 6% – both of which missed earnings expectations. 

  • On volumes: “In the first quarter, deceleration in U.S. retail sales resulted in lower volume than we anticipated, and we faced ongoing demand weakness in Asia.” – CEO Carol Tome

  • “Given current macro conditions, we expect volume to remain under pressure.” 

First Republic (-49.4%): The regional bank lost more than US$100bn or 40% in deposits in the March quarter.

  • “With the closure of several banks in March, we experienced unprecedented deposit outflows. We moved swiftly and leveraged our high-quality loan and securities portfolios to secure additional liquidity. We are working to restructure our balance sheet and reduce our expenses and short-term borrowings." – CFO Neal Holland


As of Monday, 88 S&P 500 companies had reported first quarter results. 68% beat EPS expectations, down from a record 90% last week but still above the historical post-Week 2 average of 63%. 

Overnight, approximately 60 earnings results have come through, with 77% beating EPS and 73% beating sales expectations. 5 companies raised guidance while 2 lowered. 


  • South Korea economy grows 0.3% in the first quarter, risks remain (Bloomberg)

  • US consumer confidence slips to 9-month low in April (Reuters)

  • German Ifo survey shows further improvement in business conditions (Bloomberg)

  • Sources say China pushes banks this month to cut deposit interest rates further (Reuters)

Industry ETFs

Wed 26 Apr 23, 8:31am (AEST)

Description Last Chg %
Gold 184.81 +0.51%
Uranium 19.16 +0.37%
Silver 23.08 -0.39%
Aluminum 49.8199 -1.04%
Copper Miners 40.03 -3.62%
Strategic Metals 80.01 -3.77%
Lithium & Battery Tech 60.43 -3.81%
Steel 61.9317 -3.81%
Nickel 32.2799 -4.96%
Aerospace & Defense 115.62 -1.17%
Global Jets 18.18 -2.26%
Cannabis 8.18 -1.71%
Biotechnology 133.05 -1.92%
Description Last Chg %
Bitcoin 16.28 +0.86%
Solar 77.68 -2.65%
CleanTech 15.39 -3.12%
Hydrogen 9.75 -3.79%
Sports Betting/Gaming 16.69 -1.80%
Robotics & AI 25.11 -1.95%
Video Games/eSports 51.1 -2.11%
FinTech 20.52 -2.39%
Electric Vehicles 22.38 -2.52%
E-commerce 17.26 -2.71%
Semiconductor 414.94 -3.36%
Cloud Computing 17.13 -3.79%
Cybersecurity 22.59 -5.44%

Deeper Dive

Sectors to Watch

Tech: The Nasdaq fell almost 2% overnight. But at the same time, heavyweights Microsoft and Alphabet are up 2-8% in after hours. So what will it be? Its also worth noting that Alphabet's positive commentary about the ads market. Can that help out a name like Appen?

Lithium: The Global X Lithium ETF fell 3.8% overnight after a bounce on Monday. Heavyweight names like Albemarle and SQM closed a respective 4% and 1.4% lower. This could see some more negative flow follow through for local names. That said, Chile's nationalisation plans has helped boost several Australia-based producers, notably Pilbara Minerals, which is up 8.7% in the last two sessions. Does the shift towards ex-Chile (and perhaps South America) continue?

Iron ore and copper: US-listed BHP shares fell 3.4% overnight. Singapore iron ore futures are down 14.8% in the last six sessions to US$100.35 a tonne. Likewise, copper prices are down 5.95% in the last five to US$3.85/lb. So a rather heavy session for materials can be expected.

Market ramblings: Technicals and seasonality

The S&P 500 fell 1.58% overnight, which represents its first decline of more than 1% in 22 days, the longest streak since November 2021 (37 days).

From a technical perspective, the S&P 500 has been sitting around the 4,100 area for the past few weeks. An inflection point is brewing and the key earnings over the next few days might be the catalyst to drive a directional move for markets.

SPX weekly chart
S&P 500 weekly chart

I've been working on a little data project that's looks at historical ASX 200 performance. The data averages daily performance between June 1992 and March 2023. The numbers running along the bottom refer to the day of the year (e.g. April 26 would be day 116).

ASX 200 seasonality
Source: Market Index

April and December have historically been the strongest months of the year. Both average gains of 0.11%. But as we head into May and June, things tend to get a little bit choppy. Both months average declines of 0.02%.

Of course, these are just historical and seasonal performances. But something to be mindful of.

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: None

  • Dividends paid: Australian Clinical Labs (ACL) – $0.07, Adacel Technologies (ADA) – $0.015 

  • Listing: None

Economic calendar (AEST):

  • 11:30 am: Australia Inflation Rate

  • 4:00 pm: Germany Consumer Confidence

  • 10:30 pm: US Durable Goods Orders

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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