Market Wraps

Morning Wrap: ASX 200 to rise + Alphabet and Microsoft beat earnings expectations

Wed 26 Jul 23, 8:36am (AEST)

ASX 200 futures are trading 19 points higher, up 0.26% as of 8:20 am AEST.

The Dow Jones extends its wining streak to 12, Microsoft shares pull back despite beating revenue and earnings expectations while Alphabet shares surge, US consumer confidence climbs to levels not seen since mid-2021, Morgan Stanley's Mike Wilson admits he's been too bearish and a closer look at the recent surge in Resource stocks.

Let's dive in.


S&P 500 intraday
S&P 500 higher but off best levels (Source: TradingView)


Dow weekly chart
Dow weekly chart (Source: TradingView)


Note: We're currently experiencing some difficulties retrieving overnight data from our vendor. This means the Morning Wrap will have no Overnight Summary, US Sector Performance and ETF tables. The team is working on a new solution which will take up to 2-3 weeks.

  • S&P 500 +0.28%, Nasdaq +0.61%, Dow +0.08%, Russell 2000 +0.02%

  • S&P 500 higher but sold off in the last hour of trade

  • Dow higher for the 12th day in a row, there have only been four other occurrences since World War II

  • Gold snaps a four-day losing streak, up 0.5% to US$1,963

  • Copper rallies 1.6% to US$3.9/lb

  • Oil up for a fourth straight session, WTI crude settles 0.5% higher to US$79.3 a barrel

  • Fed expected to hike rates by another 25 bps on Thursday morning, expected to be the last one of the cycle

  • Lots of conflicting debates: Peak fed viewed as a positive for markets but central banks adamant on higher for longer, disinflation momentum but increasingly flagged as an earnings headwind as businesses lose pricing lower, guidance trends strongest in nearly two years but forward-looking earnings revision breadth is rolling over

  • JPMorgan's Kolanovic sticks with bearish call on US stocks, citing S&P 500 concentration 'could be indicative of a bubble' (Bloomberg)

  • Morgan Stanley’s Mike Wilson admits he’s been bearish for too long as the S&P 500 recouped its entire 2022 decline but left his year-end price target at 3,900 (Bloomberg)


  • US dividend stocks back in favour as investors bet on peak Fed (Reuters)


Almost 25% of the S&P 500 has reported second quarter results (as at Tuesday open). 

  • 79% of reporters have topped EPS estimates, above the 77% five-year average

  • Earnings are beating expectations by 6.8%, below the 8.4% five-year average

To keep things crisp, we’ll be skipping a few result recaps including: 3M (+5.3%), General Electric (+6.3%), General Motors (-3.5%). Also note that after hours performance is subject to change. 

Microsoft (+1.7%, after hours -0.5%): Double beat, quarterly revenues up 8% to a record US$56bn, Microsoft Cloud revenues up 21% to US$30.3bn.

  • "Organisations are asking not only how – but how fast – they can apply this next generation of AI to address the biggest opportunities and challenges they face – safely and responsibly.” – CEO Satya  Nadella

Alphabet (+0.75%, after hours +5.1%): Double beat, revenue for the quarter was up 7% to US$74.6bn (US$72.8 expected), Google Cloud revenue jumped 28% to US$8bn.

  • "The momentum across the company drove our results this quarter. We delivered solid performance in search and Youtube and ongoing strong growth in Cloud." – CEO Sundar Pichai

  • "We are particularly excited about the customer interest in our AI-optimised infrastructure..At the same time, we continued to experience headwinds in the second quarter for moderation in consumption growth as customers optimise their spend.” – CFO Ruth Porat 

  • "We expect elevated levels of investment in our technical infrastructure, increasing through the back half of 2023 and continuing to grow in 2024. The primary driver is to support the opportunities we see in AI …” 

Visa (-0.85%, after hours -0.6%): Double beat, revenue for the quarter up 12% to US$8.1bn, net income up 22% to US$4.2bn, payments volume up 9%. 

  • “Consumer spending remained resilient, driving growth in payments volume and processed transactions … cross-border volume continued to be a tailwind, fueled by travel growth from the ongoing recovery and summer tourism.” – CEO Ryan McInerney

Spotify (-14.3%): Revenue, EPS and average revenue per user miss, monthly active users rose 27% year-on-year to 551 million subscribers, third quarter revenue guidance was lighter than expected. 


  • US consumer confidence rise in July to highest level since mid-2021 (Bloomberg)

  • German Ifo business climate survey sees further deterioration (Bloomberg)

  • South Korean GDP growth expands in Q2, consumption and exports weak (Reuters)

  • IMF raises 2023 global-growth forecast but notes challenging outlook (IMF)

  • Halted Black Sea grain deal could cause 15% rise in grain prices, IMF says (Bloomberg)

Deeper Dive: A Commodity Breakout?

The Resource sector made a lot of big moves yesterday, many of which rallied towards or past key levels.

  • Fortescue (ASX: FMG) +4.6%, almost at levels not seen since August 2021

  • BHP (ASX: BHP) ADRs rallied 4.4% overnight to a 5-month high

  • Woodside (ASX: WDS) +1.2% to a 5-month high

(I said FMG hit an all-time high last night but realised the chart I was looking at was adjusted for dividends)

From a technical perspective, a lot of these Resource majors are pushing out of a prolonged base. Is this a part of a powerful, sector wide breakout?

Fortescue chart
Fortescue weekly chart (Source: TradingView)
Woodside weekly
Woodside weekly chart (Source: TradingView)

At the beginning of the year, everyone was talking about a 'commodity supercycle'. But now, no one's really talking about it. Even as Resource stocks move out, oil bounces back to US$80 a barrel and copper takes another crack at US$4/lb.

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Mayfield Group (MYG) – $0.01 

  • Dividends paid: Premier Investments (PMV) – $0.54

  • Listing: None

Economic calendar (AEST):

  • 11:30 am: Australia Inflation

  • 4:00 am: Fed Interest Rate Decision

  • 4:30 am: Fed Press Conference

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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