Market Wraps

Morning Wrap: ASX 200 to fall, S&P 500 and Nasdaq pull back, Bitcoin tumbles from record high

Wed 06 Mar 24, 8:37am (AEST)

ASX 200 futures are trading 5 points higher, up 0.06% as of 8:30 am AEDT.

Major US benchmarks retreated overnight ahead of a slew of economic data and Powell's congressional testimony, Bitcoin sold off sharply after briefly tagging a fresh all-time high of US$69,210, Apple says its iPhone sales in China fell 24% in the first six weeks of this year, gold prices continued to push record levels but gold miners struggled for upside.

Let's dive in.

Overnight Summary

Wed 06 Mar 24, 8:24am (AEST)

Name Value % Chg
Major Indices
S&P 500 5,079 -1.02%
Dow Jones 38,585 -1.04%
NASDAQ Comp 15,940 -1.65%
Russell 2000 2,052 -1.07%
Country Indices
Canada 21,526 -0.02%
China 3,048 +0.28%
Germany 17,698 -0.10%
Hong Kong 16,163 -2.61%
India 73,677 -0.26%
Japan 40,098 -0.03%
United Kingdom 7,646 +0.08%
Name Value % Chg
Commodities (USD)
Gold 2,137.8 +0.57%
Iron Ore 116.94 +2.68%
Copper 3.843 -0.34%
WTI Oil 78.22 -0.67%
Currency
AUD/USD 0.6505 -0.06%
Cryptocurrency
Bitcoin (AUD) 95,684 -7.81%
Ethereum (AUD) 5,252 -4.90%
Miscellaneous
US 10 Yr T-bond 4.137 -1.94%
VIX 14.79 +9.64%

US Sectors

Wed 06 Mar 24, 8:24am (AEST)

SECTOR % CHG
Energy +0.74%
Consumer Staples +0.34%
Financials +0.13%
Utilities -0.26%
Materials -0.53%
Communication Services -0.77%
SECTOR % CHG
Health Care -0.80%
Industrials -0.83%
Real Estate -1.24%
Consumer Discretionary -1.31%
Information Technology -2.19%

S&P 500 SESSION CHART

SPX 2024-03-06 08-05-15
S&P 500 finished slight off worst levels (Source: TradingView)

ASX TODAY

  • ASX 200 set to open weaker on Wednesday following a tech, growth and momentum-focused pullback for US markets

  • AMA Group fielded an approach from Capital SMART founder (The Australian)

  • Dicker Data founder selling $200m worth of stock (AFR)

  • Eureka share trade prompts take of rival bidder (The Australian)

  • Iress denies PE takeover speculation (The Australian)

  • WA1 Resources holder Regal Funds Management raises stake to 10.59% from 8.49% 

  • Scentre Group Chairman Ilana discloses purchase of 100,000 shares 

  • Delta Lithium initiated Neutral at Barrenjoey with $0.30 target price

  • Sigma Healthcare initiated Overweight at Barrenjoey with $1.30 target price

  • Wildcat Resources initiated Overweight at Barrenjoey with $0.80 target price 

MARKETS

  • S&P 500 lower, finished a little off from worst levels

  • Nasdaq 100 marks largest decline since it fell 2.5% on 25 October 2023

  • Markets are on the defensive as pullback dynamics kick in and ahead of Powell's speech at Capitol Hill tomorrow

  • Strategists mixed on whether US markets are in bubble territory (Bloomberg)

  • JPMorgan says recent rally in US stocks and Bitcoin suggests a bubble, flagged risk that stocks holding record levels could continue to pressure Fed to hold rates (Bloomberg)

  • Morgan Stanley says global M&A volumes will rise by 50% this year (Reuters)

  • Gold hits record high as markets price in Fed rate cuts and growing demand for safe haven assets (FT)

  • Bitcoin hits record high with more than US$7.5bn flowing into Bitcoin ETFs since January launch (FT)

INTERNATIONAL STOCKS

  • Apple China iPhone sales down nearly 24% in first six weeks of 2024 (Bloomberg)

  • AMD runs into US regulatory roadblock on sale of AI chips designed for China (CNBC)

  • OpenAI expanding its communications function with addition of new product, policy and partnerships communication leads (Axios)

  • Eli Lilly accelerates race to boost capacity as it rolls out rival to Novo Nordisk weight-loss drug (FT)

  • Facebook, Instagram, Messenger, and Threads hit with mass outages (AP)

CENTRAL BANKS

  • Atlanta Fed President Bostic says first rate cut to be followed by pause (Bloomberg)

  • Sticky services inflation points ECB to resist calls for rate cuts (FT)

GEOPOLITICS

  • Ukraine military says it sunk a Russia patrol ship off the coast of Crimea (Reuters)

  • Israel-Gaza ceasefire talks in Cairo end with no breakthrough (Reuters)

  • Macron says France does not intend to send troops to Ukraine (APA)

  • China omits word "peaceful" in mention of Taiwan reunification (Reuters)

  • China set to increase defence spending by most in five years (Bloomberg)

ECONOMY

  • US services PMI slowed in February – 52.6 vs. 52.9 consensus – but prices paid sub-index eased as data for new orders accelerate (Reuters)

  • Tokyo core inflation rebounds above 2% target as energy subsidies end (Bloomberg)

  • China Caixin services PMI weakens amid slowdown in business activity (Reuters)

  • Japan Q4 GDP seen revised to expansion (Nikkei)

  • South Korea Q4 GDP growth maintains steady pace (Yonhap)

  • China sets 2024 growth target of around 5% (Bloomberg)

  • China signals more support for property sector (Bloomberg)

Industry ETFs

Wed 06 Mar 24, 8:24am (AEST)

Name Value % Chg
Commodities
Gold Miners 28.67 +0.56%
Uranium 27.555 -0.52%
Silver 21.66 -0.91%
Steel 69.76 -1.08%
Copper Miners 36.0 -1.59%
Lithium & Battery Tech 43.37 -5.24%
Strategic Metals 49.155 -6.97%
Industrials
Global Jets 20.05 +0.05%
Aerospace & Defense 128.7 -0.14%
Construction 69.35 -1.01%
Agriculture 22.2 -1.11%
Healthcare
Cannabis 5.15 +0.78%
Biotechnology 137.34 -0.84%
Name Value % Chg
Cryptocurrency
Bitcoin 28.45 -8.64%
Renewables
Solar 43.03 -0.83%
CleanTech 9.05 -1.63%
Hydrogen 5.44 -2.68%
Technology
Video Games/eSports 62.56 -0.56%
E-commerce 22.8199 -0.74%
Robotics & AI 31.7 -0.84%
Sports Betting/Gaming 17.504 -1.50%
Semiconductor 673.06 -1.96%
Electric Vehicles 23.81 -2.10%
Cybersecurity 29.4 -2.81%
FinTech 26.05 -2.83%
Cloud Computing 21.31 -3.18%

Overnight Weakness

It was a pretty heavy overnight session with a lot of sectors and sub-sectors pulling back sharply. This might call for some caution after such a powerful run up. Here are a few things to note from the overnight session:

  • Bitcoin: Bitcoin hit a brief all-time high of US$69,210 followed by a sharp 13% selloff to US$59,300. It's currently trading at US$63,000. Such a turn can often crush momentum.

  • Lithium: It was fun while it lasted. Chinese lithium carbonate futures tumbled 7.2% on Tuesday. Over the past five days, Chinese futures are up just 4.6% (up as much as 16% earlier this week). Pilbara Minerals (ASX: PLS) finished 7.0% lower on Tuesday. Let's see if this weakness persists on Wednesday (and how Chinese lithium futures open at 12:00 pm AEDT).

  • Tech: US mega caps and tech fell sharply overnight, notably Microsoft (-2.96%), Apple (-2.84%) and Amazon (-1.95%). Nvidia managed to eke out a small gain of 0.86%. You can also see this weakness from the Cloud, Fintech and Semis ETFs above. This could see some negative flows follow through for local names like Wisetech (ASX: WTC), Xero (ASX: XRO) and Life360 (ASX: 360).

  • Gold: Gold rallied as much as 1.3% overnight to US$2,141 an ounce (currently up 0.7% to US$2,128). Interestingly, gold miners struggled to capture more upside. The VanEck Gold Miners ETF finished the overnight session up 0.5%, down from session highs of 2.2%. It might be worth watching out such fading action (or a muted open) for local names.

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: 26 companies and ETFs are trading ex-dividend. See the full-list here

  • Dividends paid: Magellan Financial Group (MFG) – $0.294

  • Listing: None

Economic calendar (AEDT):

  • 9:00 am: Australia Ai Group Industry Index (Feb)

  • 11:30 am: Australia GDP (Q4)

  • 6:00 pm: Germany Balance of Trade (Jan)

  • 1:45 am: Canada Interest Rate Decision

  • 2:00 am: US Fed Chair Powell Testimony

  • 2:00 am: US JOLTs Job Openings (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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