Market Wraps

Morning Wrap: ASX 200 to fall, S&P 500 tumbles, blowout US jobs data pushes back rate cuts

Mon 13 Jan 25, 8:33am (AEDT)

ASX 200 futures are down 71pts (-0.86%) as of 8:30 am AEDT.

In a nutshell:

  • The quick jump in yields is trouble for stocks

  • US 10-year yield almost never rallies with such strength and any further surges are bad news for fragile markets

  • This is driving a big risk-off episode, with three US sectors tumbling more than 2pc on Friday (real estate, financials and tech)

Let's dive in.

Overnight Summary

Mon 13 Jan 25, 8:23am (AEDT)

Name Value % Chg
Major Indices
S&P 500 5,827 -1.54%
Dow Jones 41,938 -1.63%
NASDAQ Comp 19,162 -1.63%
Russell 2000 2,189 -2.22%
Country Indices
Canada 24,768 -1.22%
China 3,169 -1.33%
Germany 20,215 -0.50%
Hong Kong 19,064 -0.92%
India 77,379 -0.31%
Japan 39,190 -1.05%
United Kingdom 8,248 -0.86%
Name Value % Chg
Commodities (USD)
Gold 2,715.0 +0.88%
Iron Ore 98.09 +0.36%
Copper 4.304 -0.37%
WTI Oil 76.57 +3.15%
Currency
AUD/USD 0.6146 -0.84%
Cryptocurrency
Bitcoin (USD) 94,623 +0.05%
Ethereum (AUD) 5,331 -0.65%
Miscellaneous
US 10 Yr T-bond 4.776 +1.77%
VIX 19.54 +8.14%

US Sectors

Mon 13 Jan 25, 8:23am (AEDT)

SECTOR % CHG
Energy +0.34%
Utilities -0.57%
Health Care -0.58%
Consumer Discretionary -0.97%
Materials -0.98%
Communication Services -1.00%
SECTOR % CHG
Industrials -1.11%
Consumer Staples -1.13%
Information Technology -2.23%
Financials -2.45%
Real Estate -2.46%

S&P 500 SESSION CHART

SPX 2025-01-13 07-59-51
S&P 500 lower, finished a little off worst levels (Source: TradingView)

OVERNIGHT MARKETS

  • Major US benchmarks finished lower and trading around the lowest level since late November 

  • US weekly recap – Russell 2000 (-3.49%), Nasdaq (-2.34%), S&P 500 (-1.94%) and Dow Jones (-1.86%)

  • Today’s big story – US unemployment and nonfarm payrolls well-ahead of consensus, raising concerns about stalling inflation progress

  • Bond yields soared on this data, the market is now expecting no rate cut at the Fed’s Jan-29 meeting and less than 30 bps of cuts for the year, according to CME’s FedWatch tool

  • US 10-year Treasury yield trading at the highest level since October 2023, recent move (up ~55  bps in one month) is more than two standard deviations on a one-month basis 

  • High bar for Q4 earnings season with focus on broadening earnings momentum, slowdown in big tech growth, Trump tariffs, elevated margins, dollar strength (BBG)

  • 10-year yields above 5% on deficit, policy uncertainty and sticky inflation concerns could signal more trouble for stocks (BBG)

  • New US sanctions on Russian energy industry will force Chinese and Indian refiners to source more oil elsewhere, boosting prices and freight costs (RT)

STOCKS

  • Apple's 2025 plans involve overhauled iPhone line, new AI features, smart home focus and updates to products it has not refreshed for some time (BBG)

  • Bank earnings kick off this week with annual outlooks and expectations for dealmaking and capital markets revival likely to overshadow Q4 results (BBG)

  • Delta shares soar on 4Q24 revenue and EPS beat, company survey showed 90% of companies expect to lift travel spend this year (CNBC)

  • Jefferies shares dip 10pc despite 4Q24 profit more than tripling year-on-year amid investment banking recovery (RT)

  • US insurance stocks like Allstate and Chubb dip 3-6% amid the devastation caused by the Los Angeles wildfires (CNBC)

ECONOMY

  • US December nonfarm payrolls up ~256,000 vs. 150-160,000 consensus, unemployment rate ticked lower month-on-month to 4.2% (RT)

  • US January consumer sentiment at 73.2, in-line with consensus and down from 74.0 in December, year-ahead inflation expectations soared from 2.8% last month to 3.3% and now the highest since May-24 (RT)

Industry ETFs

Mon 13 Jan 25, 8:23am (AEDT)

Name Value % Chg
Commodities
Silver 27.61 +0.77%
Gold Miners 35.97 +0.19%
Steel 57.59 -0.59%
Copper Miners 39.17 -0.68%
Strategic Metals 40.29 -1.30%
Lithium & Battery Tech 39.77 -2.12%
Uranium 27.17 -2.41%
Industrials
Global Jets 26.22 +1.75%
Agriculture 26.45 +0.34%
Aerospace & Defense 145.08 -0.63%
Construction 74.81 -1.63%
Healthcare
Biotechnology 132.73 -1.56%
Name Value % Chg
Cryptocurrency
Bitcoin 23.05 +0.92%
Renewables
Hydrogen 24.53 -0.08%
CleanTech 7.0 -2.23%
Solar 34.14 -3.29%
Technology
Cybersecurity 31.87 -0.65%
Sports Betting/Gaming 18.5978 -1.44%
Video Games/eSports 81.61 -1.58%
Robotics & AI 31.79 -1.85%
Cloud Computing 23.56 -2.08%
E-commerce 27.34 -2.11%
Electric Vehicles 22.86 -2.22%
Semiconductor 218.2 -2.39%
FinTech 30.76 -2.57%

ASX TODAY

  • ASX 200 futures pointing at a steep fall at the open, dragging the index to a one-week low

  • Markets path of least resistance has flipped to lower as recent data continues to flag rising inflation risks (US ISM services price paid index hit a 22-month high, Trump reaffirms tariff plan, oil prices hit four-month high etc)

  • Risk-off episode looks largely like a bond market tantrum, which makes upcoming data points like next week's US CPI and PPI a possible reversal catalyst

  • Bain Capital to match CC Capital’s $4.30 a share bid for Insignia Financial (AFR)

  • Vulcan Energy produces first battery quality lithium at its downstream optimisation plant (VUL)

WHAT TO WATCH TODAY

  • Relative resource strength: Commodity prices ticked higher overnight, led by oil (+3.1%), nickel (+1.5%) and gold (+0.7%). But related equities struggled to capture more upside amid broader market weakness (e.g. Gold Miners ETF up just 0.19%, down from session high of 2.79%).

  • Rate-sensitive sectors: The three worst performing US sectors were real estate (inverse relationship with yields), financials (weaker-than-expected earnings, also recently trading with strong correlation to yields) and tech.

BROKER MOVES

  • Flight Centre initiated Overweight with $22 target (MS)

  • Waypoint REIT initiated Overweight with $2.70 target (JARD)

Key Events

Stocks trading ex-dividend: 

  • Mon 13 – Tue 14 Jan: None

  • Wed 15 Jan: Tower (TWR) – 4.07%

  • Thu 16 – Fri 17 Jan: None

Other ASX corporate actions today: 

  • Dividends paid: Eumindi Group (EBG)

  • Listing: None

  • Earnings: None

  • AGMs: None

Economic calendar (AEDT):

  • 10:30 am: Australia ANZ-Indeed Jobs Ads (Dec)

  • 11:00 am: Australia TD-MI Inflation Gauge (Dec)

  • 1:00 pm: China Balance of Trade (Dec)

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.

Get the latest news and insights direct to your inbox

Subscribe free