Market Wraps

Morning Wrap: ASX 200 to fall, S&P 500 slips ahead of jobs data + 4 charts to watch

Fri 01 Sep 23, 8:24am (AEDT)

ASX 200 futures are trading 38 points lower, down -0.53% as of 8:20 am AEST.

The S&P 500 snapped a four day winning streak ahead of key US jobs data, oil continues to power ahead as OPEC+ announces further production cuts, cannabis stocks are set to rally after the US Department of Health and Human Services recommended easing restrictions on marijuana, Eurozone inflation comes in hotter-than-expected while core eased in-line with expectations and four interesting stock charts to watch.

Let's dive in.

Overnight Summary

Fri 01 Sep 23, 8:24am (AEDT)

Name Value Chg %
Major Indices
S&P 500 4,508 -0.16%
Dow Jones 34,722 -0.48%
NASDAQ Comp 14,035 +0.11%
Russell 2000 1,900 -0.19%
Country Indices
Canada 20,293 -0.19%
China 3,120 -0.55%
Germany 15,947 +0.35%
Hong Kong 18,382 -0.55%
India 64,831 -0.39%
Japan 32,619 +0.88%
United Kingdom 7,439 -0.46%
Name Value Chg %
Commodities (USD)
Gold 1,966.60 -0.32%
Iron Ore 115.85 -
Copper 3.793 +0.20%
WTI Oil 83.58 +2.39%
Currency
AUD/USD 0.6484 0.00%
Cryptocurrency
Bitcoin (AUD) 40,081 -4.68%
Ethereum (AUD) 2,540 -3.36%
Miscellaneous
US 10 Yr T-bond 4.093 -0.61%
VIX 14 -2.23%

US Sectors

Fri 01 Sep 23, 8:24am (AEDT)

Sector Chg %
Consumer Discretionary +0.51%
Information Technology +0.37%
Energy +0.15%
Communication Services +0.11%
Materials -0.05%
Financials -0.40%
Industrials -0.51%
Consumer Staples -0.54%
Real Estate -0.76%
Utilities -1.03%
Health Care -1.21%

S&P 500 SESSION CHART

S&P 500 intraday chart
S&P 500 lower and finishes near session lows (Source: TradingView) 

MARKETS

  • S&P 500 lower, off session highs of 0.38%, snapped a four day winning streak

  • Nasdaq up for a fifth straight session but off best levels

  • S&P 500 and Nasdaq finish August down a respective 1.8% and 2.2%, marking their first monthly declines since February

  • Relatively uneventful session ahead of US nonfarm payrolls, unemployment and ISM manufacturing data

  • Recent bounce has been fuelled by a retreat in bond yields, disinflation momentum, a dovish lean from central banks, positioning dynamics with funds flipping back to the buy side, renewed AI hype and China stimulus

  • Oil posts third monthly gain as OPEC+ announces further cuts (Bloomberg)

  • Too early to make call on turning point for weak dollar, says SocGen (Bloomberg)

STOCKS & EARNINGS

  • Cannabis stocks rallied after the US Department of Health and Human Services recommended easing restrictions on marijuana and classifying it as a lower-risk drug (CNBC)

  • Salesforce lifts annual forecast, says software demand stays strong (Reuters)

  • Okta forecasts quarterly revenue above expectations, shares surge (Reuters)

  • CrowdStrike lifts annual profit forecast on resilient cybersecurity demand (Reuters)

  • UBS signals most of Credit Suisse Investment bank to shut (Bloomberg)

CENTRAL BANKS

  • Fed's Bostic says policy is appropriately restrictive (Bloomberg)

  • Fed’s preferred inflation gauge rises modestly, spending jobs (Bloomberg)

  • ECB's Schnabel sees worsened growth outlook as prices stick (Bloomberg)

CHINA

  • PBOC vows to improve financing for private firms (Reuters)

  • Chinese mega cities relax mortgage rules to shore up housing (Bloomberg)

  • China's home sales drop for a third month as slowdown deepens (Bloomberg)

  • China local governments speed up issuance of infrastructure bonds (Bloomberg)

  • Property developer Country Garden posts $7bn loss in first half (FT)

  • Country Garden delays yuan bondholder voting deadline again (Bloomberg)

ECONOMY

  • US consumer spending accelerates, declining savings a red flag (Reuters)

  • US core PCE inflation gauge gains in July, in-line with consensus (Bloomberg

  • Eurozone headline inflation comes in hotter and above 5.0% but core reading eases in line with expectations (Bloomberg)

  • China factory activity shrinks for a fifth month but at a slower pace (Bloomberg)

  • French inflation accelerates above expectations in August (Bloomberg)

  • Japan industrial production contracts but retail sales beat (Bloomberg)

  • South Korea flags longest stretch of factory output declines (Bloomberg)

  • Australia Q2 business investment hits highest in almost 8 years (Reuters)

Industry ETFs

Fri 01 Sep 23, 8:24am (AEDT)

Description Last Chg %
Commodities
Copper Miners 37.86 -0.16%
Uranium 24.01 -0.17%
Lithium & Battery Tech 59.26 -0.22%
Steel 67.36 -0.68%
Silver 22.39 -0.80%
Gold Miners 29.26 -0.88%
Strategic Metals 70.64 -0.94%
Industrials
Construction 55.64 +0.34%
Global Jets 19.25 -0.26%
Aerospace & Defense 116.17 -0.47%
Agriculture 21.74 -0.50%
Healthcare
Cannabis 7.46 +8.91%
Biotechnology 128.71 -0.88%
Description Last Chg %
Cryptocurrency
Bitcoin 13.44 -3.66%
Renewables
Solar 58.23 -0.09%
CleanTech 12.33 -0.56%
Hydrogen 8.63 -0.69%
Technology
Cybersecurity 25.09 +2.66%
Cloud Computing 20.51 +1.43%
Semiconductor 510.67 +0.69%
E-commerce 19.0664 +0.27%
Sports Betting/Gaming 17.539 +0.19%
Video Games/eSports 54.19 +0.06%
Electric Vehicles 24.91 -0.16%
Robotics & AI 26.73 -0.37%
FinTech 21.71 -0.55%

Charts of the Week

Chris is away this week so I'll be taking care of this segment as always, the charts are for illustrative and educational purposes only. Always do your own research.

Bapcor (ASX: BAP) – Post earnings gap up

BAP 2023-09-01 07-51-58
Bapcor daily chart (Source: TradingView)

Bapcor's chart may serve as a case study for a technical set up known as the 'Buyable gap up'. Here are the key characteristics of this set ups, outlined by William O'Neil:

  • A buyable gap up is a point at which the bulls have decisively won the argument over the bears

  • The move should be significant

  • You want to see volume of at least 150% of the 50-day average volume (the more volume, the more significant the gap)

  • You can use the intraday low (of the gap up day) as the stop

Bapcor rallied 5.5% on the day of its FY23 results, with volume of almost 4 million (vs. 50-day average of ~740,000) and managed to hold the intraday low of the gap up day. So let's see if it can kick on from here.

Emerald Resources (ASX: EMR) – A gold leader

EMR 2023-09-01 07-58-57
Emerald Resources daily chart (Source: TradingView)

I refer to 'leader' in the context of share price performance. Gold has been a rather difficult sector two years and very few stocks have managed to trend higher. Emerald Resources is one of them, up 100% year-to-date. The company must be doing something that's fundamentally in the right direction.

From a technical perspective, the stock has been trending higher for most of the year. It's beginning to stall around the $2.30 level. Can it tighten up and push out from here?

Gentrack (ASX: GTK) – Consolidation

GTK 2023-09-01 08-10-00
Gentrack daily chart (Source: TradingView)

Gentrack experienced a 29% gap up on 22 May, the day of its half-year results. It's been trading mostly sideways for the past three months, in a relatively constructive manner (aka not giving back the gap up). The $4.10 area continues to be an area of resistance as the stock approaches this level, can it muster up a breakout?

Stanmore (ASX: SMR) – Moving out

SMR
Stanmore daily chart (Source: TradingView)

Stanmore is starting to break out of a one month base. The stock bottomed in late July after an almost 40% fall from February highs (due to lower coal prices).

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Iluka Resources (ILU) – $0.03, Ampol (ALD) – $0.95, Orora (ORA) – $0.09, Coles (COL) – $0.30, Johns Lyng Group (JLG) – $0.045, Eagers Automotive (APE) – $0.24,

    • See full list of ASX stocks and ETFs trading ex-dividend here

  • Dividends paid: Euroz Hartleys (EZL) – $0.035, Dicker Data (DDR) – $0.10, Hotel Property Investments (HPI) – $0.09

  • Listing: None

Economic calendar (AEST):

  • 11:30 am: Australia Home Loans 

  • 11:45 am: China Caixin Manufacturing PMI

  • 10:30 pm: Canada GDP

  • 10:30 pm: US Unemployment

  • 12:00 am: US ISM Manufacturing PMI

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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