Market Wraps

Morning Wrap: ASX 200 to fall, led by miners + Fitch flags further downgrades to US banks

Wed 16 Aug 23, 8:34am (AEST)

ASX 200 futures are trading 75 points lower, down -1.05% as of 8:20 am AEST.

Major US benchmarks sold off on disappointing Chinese economic data and the prospect of more downgrades for US banks, Bank of America's latest Fund Manager Survey says investors are the least bearish since February 2022, Home Depot tops earnings expectations but flags pressure in certain big-ticket categories and REIT positioning falls to levels not seen since the Global Financial Crisis.

Let's dive in.

Overnight Summary

Wed 16 Aug 23, 8:34am (AEST)

Name Value Chg %
Major Indices
S&P 500 4,438 -1.16%
Dow Jones 34,946 -1.02%
NASDAQ Comp 13,631 -1.14%
Russell 2000 1,896 -1.29%
Country Indices
Canada 19,900 -1.93%
China 3,176 -0.07%
Germany 15,767 -0.86%
Hong Kong 18,581 -1.03%
India 65,402 +0.12%
Japan 32,239 +0.56%
United Kingdom 7,390 -1.57%
Name Value Chg %
Commodities (USD)
Gold 1,933.30 -0.55%
Iron Ore 104.80 -
Copper 3.659 -1.79%
WTI Oil 81.08 -1.73%
AUD/USD 0.6456 +0.00%
Bitcoin (AUD) 45,224 -0.61%
Ethereum (AUD) 2,831 -0.90%
US 10 Yr T-bond 4.221 +0.88%
VIX 16 +11.07%

US Sectors

Wed 16 Aug 23, 8:34am (AEST)

Sector Chg %
Health Care -0.36%
Information Technology -0.91%
Communication Services -1.01%
Consumer Staples -1.02%
Real Estate -1.07%
Industrials -1.27%
Consumer Discretionary -1.37%
Materials -1.65%
Utilities -1.69%
Financials -1.80%
Energy -2.44%


S&P 500 intraday
S&P 500 sells off intraday to finish at worst levels (Source: TradingView)


  • Major US benchmarks lower and closed near worst levels

  • Every sector was red, resources and financials led to the downside on weak Chinese economic data and cautious comments from ratings agency Fitch

  • S&P 500 closed below its 50-day moving average for the first time since March 28

  • Fitch ratings analysts says US banking industry at risk of sweeping rating downgrades due to higher-for-longer Fed and rising loan defaults (CNBC)

  • BofA’s August Global Fund Manager Survey says respondents least bearish since February 2022, with cash allocations at a 21-month low and a majority looking for a soft-to-no landing scenario

  • BofA’s private clients have been dumping growth stocks, financials and tech but buying investment grade bonds and Japanese equities 

  • Fed's Kashkari says inflation rate too high, questions whether more is needed to curb price growth (Bloomberg)

  • Biggest Treasury ETF sees largest exodus since 2020 meltdown (Bloomberg)

  • Zero-day options trading surges to record levels as traders favour bearish contracts (Bloomberg)


Home Depot (+0.7%): The world’s largest home improvement retailer posted a double beat, reaffirmed guidance (full-year sales decline between 2-5%) and approved a US$15bn buyback program.

  • "While there was strength in categories associated with smaller projects, we did see continued pressure in certain big-ticket, discretionary categories.” – CEO Ted Decker

  • "The near-term story in housing is that with so many people locked in to the incredibly low mortgage rates that there just isn't a lot of inventory available for sale. So transactions are at certainly near-term lows.”  


  • Fed rate debate shifts to how long rates should stay high (Bloomberg)

  • RBA sees a 'credible path' to inflation target at 4.1% rate (Bloomberg)

  • Russia's central bank tries to stabilise currency with emergency 35 bp hike to 12% (Bloomberg)


  • PBOC unexpectedly cuts MLF rate by most since 2020 as economic activity weakened further in July (Bloomberg)

  • China stops reporting youth unemployment (FT)

  • China's $138bn shadow bank spirals at terrible time for Xi (Bloomberg)

  • US hedge funds bailed out of Chinese stocks in Q2 (Reuters)


  • US retail sales rise more than expected in July, up 0.7% MoM (Reuters)

  • US consumer more resilient than investors think, BofA says (Bloomberg)

  • US homebuilder sentiment falls for the first time this year (Bloomberg)

  • Canada inflation accelerates to 3.3% in July, above expectations (Reuters)

  • UK wages grew much more than expected and at a record annual pace in the three months to June (FT)

  • German investor ZEW survey shows unexpected jump in morale in August (Reuters)

  • Japan GDP growth exceeds forecasts (FT)

Industry ETFs

Wed 16 Aug 23, 8:34am (AEST)

Description Last Chg %
Silver 20.67 -0.24%
Steel 65.2992 -1.69%
Lithium & Battery Tech 58.37 -2.20%
Gold Miners 28.21 -2.56%
Uranium 22.05 -2.65%
Strategic Metals 74 -2.80%
Copper Miners 36.54 -3.51%
Construction 56.57 +0.39%
Agriculture 21.08 -0.80%
Aerospace & Defense 115.25 -1.40%
Global Jets 19.81 -2.17%
Biotechnology 128.01 -0.32%
Cannabis 6.7679 -2.29%
Description Last Chg %
Bitcoin 15.07 -0.59%
Hydrogen 8.91 -1.87%
CleanTech 12.7 -3.57%
Solar 59.58 -3.93%
Robotics & AI 26.29 -1.13%
Cybersecurity 23.67 -1.21%
Cloud Computing 19.72 -1.25%
Sports Betting/Gaming 17.3805 -1.36%
Semiconductor 492.37 -1.67%
Electric Vehicles 24.48 -1.81%
FinTech 22.06 -1.87%
Video Games/eSports 53.6 -2.05%
E-commerce 18.77 -3.15%

Sectors to Watch

What a heavy overnight session. An oversold bounce could be at play for the Nasdaq and S&P 500 as they hit their 50-day moving averages for the first time in about four months. However, there are plenty of reasons to be bearish (seasonality headwinds, yields pushing towards year-to-date highs, China's growth slowdown etc).

Today's session is expected to be a challenging one, with SPI futures currently down more than 1.0%. As for our overnight ETF watchlist, growth and resources led to the downside, especially those that are sensitive to China-related data. Notable losers include: Copper Miners (-3.5%), Rare Earths (-2.8%), Uranium (-2.65%) and Gold Miners (-2.56%).

Contrarian take on REITs

The latest Bank of America Fund Manager Survey shows a capitulation in positioning in REITs to levels not seen since the 2008 Global Financial Crisis as investors rotated into stocks and commodities.

Source: Bank of America

US real estate stocks are struggling amid fears of tighter lending standards and commercial real estate headwinds. But its positioning like this that creates a rather contrarian bullish thesis. (Unless things are worse this time)

In late July, BofA's Fund Manager Survey showed that investors were most Underweight commodities since May 2020 (this was when oil briefly hit negative prices).

Source: Bank of America

What happened next? WTI crude rallied around 20% from July to early August.

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Resmed (RMD) – $0.05, Dicker Data (DDR) – $0.10, Commonwealth Bank (CBA) – $2.40, Plato Income Maximiser (PL8) – $0.006 

  • Dividends paid: None

  • Listing: None

Economic calendar (AEST):

  • 4:00 pm: UK Inflation

  • 10:30 pm: US Building Permits

  • 4:00 am: 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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