Market Wraps

Morning Wrap: ASX 200 to rise, Dow up for 10th straight day + Are miners poised to break out?

Mon 24 Jul 23, 8:38am (AEST)

ASX 200 futures are trading 29 points higher, up 0.39% as of 8:20 am AEST.

S&P 500 and Dow finished around breakeven, the market is gearing up for a massive week of corporate earnings and macro data, second quarter earnings for S&P 500 companies that have reported results currently sit at -9.0% vs. the -7.0% expected, the Nasdaq rebalance lowers megacap weightings from 56% to 44% and closer look at a few local resource names.

Let's dive in.


S&P 500 intraday
S&P 500 closes around breakeven despite a strong open (Source: TradingView)


S&P 500 daily chart
S&P in the midst of a pullback after a massive run (Source: TradingView)


Note: We're currently experiencing some difficulties retrieving overnight data from our vendor. It's causing me a lot of grief. Our technical team is working on a new solution which might take 2-3 weeks. In the meantime, I will manually add index performance. Sorry guys :(

  • S&P 500 +0.03%, Nasdaq -0.22%, Dow +0.01%, Russell 200 -0.35%

  • S&P 500 finishes around breakeven from session highs of 0.4% and lodges weekly gain of 0.7%

  • Dow marks its 10th consecutive gain but starting to fatigue, up just 0.01% overnight

  • WTI crude settles 1.5% higher to US$76.7 a barrel, marking its fourth straight weekly gain

  • Market dealing with several headwinds heading into July FOMC meeting including overbought conditions, stretched sentiment indicators and mixed earnings

  • AAII bullish sentiment survey jumped to 51.4% last week from 41.0% in prior week – Marks the highest reading since April 2021 and longest above-average streak since May 2021

  • Market performance beginning to broaden to cyclicals and defensive sectors, the Dow Jones Transportation Index hit 52-week highs last week and the regional bank ETF rallied over 15% in July

  • Very busy week from a macro perspective – Feb and ECB both expected to raise rates by 25 bps as well as June PCE inflation, Q2 GDP and PMIs

  • Massive week for earnings as well with more than 160 companies representing almost 40% of the S&P 500’s market cap scheduled to report 


Following the second week of second quarter earnings season, 17.5% of the S&P 500 has now reported.

  • Blended earnings growth rate sits at -9.0% compared to the -7.0% expected

  • 75% of results have beaten expectations (vs. five-year average of 77%)

  • Only 6.5% of earnings are surprising to the upside (vs. five-year average of 8.4%)

  • Thematically we are seeing some positive themes around consumer resilience, travel demand and broad-based signs of disinflation

  • However, companies are flagging reduced pricing lower, heightened consumer selectivity, destocking pressure in select industries as well as a high bar for metacap tech companies after the massive first-half rally

American Express (-3.9%) – Revenue miss but earnings beat, flagged the slowest growth in spending since the first quarter of 2021, dining transactions surpassed airline spend, reaffirmed full-year revenue growth of 15-17%. 


  • Morgan Stanley raises US GDP forecast (CNBC)

  • UK consumers defy high inflation as June retail sales rise (Reuters)

  • Japan inflation rises in-line with forecasts (Reuters)

  • South Korea GDP likely slowed slightly in Q2 (Reuters)


Nasdaq Rebalance and Tech Inflows

The Nasdaq announced a 'special rebalance' on 24 July which seeks to reduce the weight of the seven largest stocks on the index. According to Goldman Sachs, this lowered their weighting by 12 percentage points from 56% to 44%.

Tech is one of the most overcrowded spaces in the market right now. Tech inflows have hit levels not seen since early 2021, according to Bank of America. The last time inflows were this high, it marked the peak of the Meme Stock Bubble (aka Gamestop) in the first quarter of 2021.

Source: BofA Global Investment Strategy

Last week, Bank of America also noted that investors were most underweight commodities since May 2020.

Source: BofA Global Investment Strategy

Are Commodities Poised to Breakout?

From a technical perspective, there are a lot of resource-related charts that are starting to get interesting. To name a few:

Woodside (ASX: WDS) closed at its highest level since November 2022 last Friday.

WDS weekly
Woodside weekly chart (Source: TradingView)

Fortescue (ASX: FMG) has been rangebound since January and now pushing recent highs.

Fortescue daily
Fortescue daily chart (Source: TradingView)

That said, the stocks are setting up at a time where there's a lot of macro turbulence. China has continued to underwhelm on policy support as the latest measures focused on currency and borrowing measures as opposed to direct cash. We also have US GDP data and the Fed's interest rate decision this week.

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: None

  • Dividends paid: None

  • Listing: None

Economic calendar (AEST):

  • 9:00 am: Australia Manufacturing PMI

  • 9:00 am: Australia Services PMI

  • 5:30 pm: Germany Manufacturing PMI

  • 11:45 pm: US Manufacturing PMI

  • 11:45 pm: US Services 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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