Market Wraps

Morning Wrap: ASX 200 to fall, Wall Street sinks on rate worries, Gold and oil prices trend higher

Wed 03 Apr 24, 8:34am (AEST)

ASX 200 futures are trading 30 points lower, down -0.38% as of 8:30 am AEDT.

Major US benchmarks sold off as bond yields continued to push higher, gold prices hit another all-time high of US$2,280 an ounce, oil prices hit levels not seen since late October amid rising geopolitical tensions and EV deliveries from Tesla, Rivian and GM paint a bearish view for demand.

Let's dive in.

Overnight Summary

Wed 03 Apr 24, 8:24am (AEDT)

Name Value % Chg
Major Indices
S&P 500 5,206 -0.72%
Dow Jones 39,170 -1.00%
NASDAQ Comp 16,240 -0.95%
Russell 2000 2,065 -1.80%
Country Indices
Canada 22,075 -0.50%
China 3,075 -0.08%
Germany 18,283 -1.13%
Hong Kong 16,932 +2.36%
India 73,904 -0.15%
Japan 39,839 +0.09%
United Kingdom 7,935 -0.22%
Name Value % Chg
Commodities (USD)
Gold 2,300.2 +1.31%
Iron Ore 102.91 +0.57%
Copper 4.082 +0.59%
WTI Oil 85.42 +1.70%
Currency
AUD/USD 0.6518 +0.45%
Cryptocurrency
Bitcoin (AUD) 100,912 -5.54%
Ethereum (AUD) 5,024 -6.23%
Miscellaneous
US 10 Yr T-bond 4.365 +0.83%
VIX 14.61 +7.03%

US Sectors

Wed 03 Apr 24, 8:24am (AEDT)

SECTOR % CHG
Energy +1.37%
Utilities +0.17%
Communication Services +0.09%
Materials -0.41%
Financials -0.44%
Industrials -0.52%
SECTOR % CHG
Consumer Staples -0.57%
Information Technology -0.97%
Real Estate -1.12%
Consumer Discretionary -1.28%
Health Care -1.62%

S&P 500 SESSION CHART

S&P 500 intraday
S&P 500 gaps down to finish lower for a second consecutive session (Source: TradingView)

ASX TODAY

  • ASX 200 set to fall for a second consecutive session as rising bond yields place downward pressure on equity markets

  • Boss Energy passes final technical milestone in Honeymoon re-start strategy

  • Coronado Global CFO discloses sale of 8,100 shares

  • Westgold Resources cuts FY gold production guidance and hikes up cost guidance

  • Virgin Money UK announces full cancellation of remaining buyback program with immediate effect 

  • Austal's long-serving chairman weighs retirement as bids land (AFR)

  • HMC-managed HealthCo and Wellness REIT circles Aussie healthcare assets (The Australian)

BROKER NOTES

  • Bellevue Gold downgraded to Neutral from Overweight but target increased to $1.85 from $1.80 (Barrenjoey) 

  • Capricorn Metals upgraded to Overweight from Neutral and target increased to $5.60 from $5.00 (Barrenjoey)

  • Emerald Resources upgraded to Neutral from Underweight and target increased to $3.0 from $2.90 (Barrenjoey)

  • Gold Road Resources downgraded to Neutral from Outperform but target remains $1.70 (Macquarie)

  • Orora downgraded to Neutral from Positive with $2.61 target (E&P)

  • Whitehaven Coal upgraded to Overweight from Neutral and target increased to $7.70 from $7.15 (Barrenjoey)

MARKETS

  • S&P 500 gaps down 0.75% at the open but remained relatively rangebound for the session

  • Gold set another record high of US$2,280 an ounce and finished the session at best levels

  • WTI crude settled 1.8% higher and hit its highest levels since late October amid Iran-Israel and Ukraine-Russia headlines

  • Growing inflation risk from recent commodity upswing – Bloomberg Commodity Index is up more than 3% in the past month while oil is breaking out to year-to-date highs

  • Markets facing a number of early headwinds heading into the second quarter – Bond yield resurgence with 10-year yields hitting four-month highs, worries the Fed won’t cut in 2024, stretched positioning and sentiment indicators, cracks in the consumer resilience theme and EV weakness

  • Copper rallies back above US$9,000 a tonne on rising optimism around Chinese economy (Bloomberg)

  • Investors are turning away from 'buy India, sell China' strategy as Chinese valuations become more attractive (Bloomberg)

INTERNATIONAL STOCKS

  • PVH full-year sales guidance missed citing difficult macro backdrop and EU weakness (Bloomberg)

  • UBS to commence new share buyback program of up to $2bn (Bloomberg)

  • GM reports a 1.5% decline in vehicle sales during first quarter of 2024 (CNBC)

  • Rivian Q1 vehicle production comes in below consensus at 13,980 (Reuters)

  • Tesla reports an 8.5% year-on-year decline in deliveries in the first quarter (CNBC)

  • GE Vernova started trading on the NYSE, following its spinoff from General Electric (CNBC)

CENTRAL BANKS

  • Cleveland Fed President Mester says she still expects a rate cut this year but cited the need for more confidence (Fed)

  • RBA minutes show no discussion on hiking (Bloomberg)

  • Xi's call to increase trading of government bonds suggests China moving into line with other major central banks (Bloomberg)

  • BOJ JGB purchases confirm lower FY24 trajectory (Nikkei)

ECONOMY

  • US job openings rise slightly, in-line with expectations and little changed month-on-month at 8.75 million (Reuters)

  • ECB says consumer inflation expectations fall to lowest since Ukraine war as officials prepare to cut rates in June (Bloomberg)

  • Eurozone manufacturing downturn deepened again in March, PMI shows (Reuters)

  • UK store inflation hits 2-year low as supermarket price wars cool things down (Bloomberg)

  • South Korea inflation unchanged against forecasts for fall, clouding BOK rate cut prospects (Bloomberg)

  • Indian manufacturing activity expands at quickest pace in 16 years, underpinned by strong domestic and external demand (Reuters)

Industry ETFs

Wed 03 Apr 24, 8:23am (AEDT)

Name Value % Chg
Commodities
Silver 23.84 +4.29%
Gold Miners 32.44 +1.28%
Copper Miners 43.27 +1.26%
Uranium 30.39 +0.90%
Strategic Metals 51.96 -0.08%
Lithium & Battery Tech 45.36 -0.48%
Steel 72.1 -0.72%
Industrials
Aerospace & Defense 130.23 -0.50%
Agriculture 24.76 -1.24%
Construction 72.27 -2.18%
Global Jets 20.35 -2.40%
Healthcare
Cannabis 5.15 +0.78%
Biotechnology 133.89 -2.13%
Name Value % Chg
Cryptocurrency
Bitcoin 28.91 -5.65%
Renewables
Hydrogen 5.59 -2.78%
CleanTech 9.33 -2.94%
Solar 43.39 -3.73%
Technology
Cybersecurity 29.49 -0.57%
Video Games/eSports 61.59 -0.85%
E-commerce 23.6 -1.26%
FinTech 26.95 -1.28%
Cloud Computing 21.46 -1.38%
Sports Betting/Gaming 17.5 -1.46%
Semiconductor 224.78 -1.54%
Electric Vehicles 24.34 -1.58%
Robotics & AI 31.05 -1.83%

Sectors to Watch: Oil and Gold

Markets are in the midst of a pullback as yields push higher (which has also stoked some upward pressure on bond volatility – otherwise known as the MOVE index). This is placing downward pressure on a number of sectors including growth (tech and discretionary), yield sensitive sectors (e.g. real estate) and risk (e.g. Bitcoin down 5.9% overnight). The good thing is that we're coming off a pretty big run – So let's see if the market can muster up a calm and collective 3-5% pullback. As for sectors to watch today:

Oil: WTI crude has pushed above US$85 a barrel for the first time since October 2023 on rising geopolitical tensions. Energy was the best performing S&P 500 sector overnight, up 1.37% (vs. S&P 500 -0.72%). While local names like Beach Energy (ASX: BPT) and Karoon Energy (ASX: KAR) have managed to capture some upside, the largest and most obvious beneficiary – Woodside (ASX: WDS) – has struggled. Woodside's adjusted NPAT is expected to slump from US$3.3 billion in FY23 to US$1.15bn in 2026 due to falling energy prices and its focus on decarbonisation, according to Macquarie.

Gold: Gold continued to power ahead overnight, up 1.26% to US$2,279 an ounce and closing near best levels. The VanEck Gold Miners ETF added 1.28% overnight to close at its highest level since July 2023. Most ASX-listed gold names were up 2-8% on Tuesday. Let's see if they can continue trending higher.

Key Events

Companies trading ex-dividend: 

  • Wednesday, 4 April: Lindsay Australia (LAU) – $0.021, Clime Capital (CAM) – $0.014, Eureka Group (EGH) – $0.007, ARB Corp (ARB) – $0.34

  • Thursday, 5 April: None

  • Friday, 6 April: None

  • Monday, 9 April: Brickworks (BKW) – $0.24

  • Tuesday, 10 April: None

  • Wednesday, 11 April: Cosol (COS) – $0.01, Duxton Water (D20) – $0.036

Other ASX corporate actions today: 

  • Dividends paid: Lycopodium (LYL) – $0.37, Lifestyle Communities (LIC) – $0.055, Generation Development Group (GDG) – $0.01, Bega Cheese (BGA) – $0.04, AMP (AMP) – $0.02, Servcorp (SRV) – $0.12

  • Listing: None

Economic calendar (AEDT):

  • 9:00 am: Australia AI Group Industrial Index (Mar)

  • 8:00 pm: Eurozone Inflation (Mar)

  • 1:00 am: US ISM Services PMI (Mar)

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