Market Wraps

Morning Wrap: ASX 200 to rise, energy stocks rally + Earnings, the Fed and GDP in focus

Tue 25 Jul 23, 8:28am (AEST)

ASX 200 futures are trading 41 points higher, up 0.56% as of 8:20 am AEST.

Major US benchmarks finished higher overnight in a relatively quiet session, energy stocks are breaking out as oil prices hit a three-month high, PMIs from the US, Eurozone and Australia disappoint as services soften and a preview of the market moving stuff this week: Australian GDP, the Fed's interest rate decision, ECB meeting and US earnings.

Let's dive in.

Note: We're currently experiencing some difficulties retrieving overnight data from our vendor. The team is working on a new solution which will take up to 2-3 weeks.


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


S&P 500 weekly chart
(Source: TradingView)


  • S&P 500 +0.40%, Dow +0.29%, Nasdaq +0.19%, Russell 2000 +0.28%

  • US equities finished higher, ending off best levels

  • S&P 500 gained for an 8th time in last 11 sessions while Dow posted its 11th straight gain – The longest streak since February 2017

  • Energy was the best performing S&P 500 sector, up 1.66% as oil prices climbed another 2.8% to a three-month high

  • Relatively quiet session with no real changes to current narratives

  • The market’s path of least resistance continues to ride on disinflation traction, rising soft landing expectations and peak Fed

  • Stock market's 2023 rally faces Fed test ahead of massive week of earnings (Bloomberg)

  • Trough in earnings revisions seen as positive signal for stocks (Bloomberg)

  • BofA notes 57% more above than below consensus earnings guidances, the strongest since October 2021


  • AMC Entertainment (+33.0%): Delaware court blocked a lawsuit settlement that would have authorised the issuance of more common stock (CNBC)

  • Zoom (-3.2%): Downgraded from Outperform to Sector Perform at RBC, analysts flagged competitive pressures and cautious on implications from the raise in AI

  • Gilead Sciences (-3.7%): Discounting late-stage trial of blood cancer treatment after disappointing analysis, FY23 guidance did not anticipate any revenue from the treatment (CNBC)

  • Spotify (-4.7%): Announced plans to increase individual subscription plans in the US by up to $1.00 to $10.99 per month (CNBC)


Chevron (+2.0%): Preliminary revenue and earnings beat – second quarter earnings of US$6bn, slightly ahead of consensus but down 48% year-on-year, long-time veteran Eimear Bonner to become CFO next year, CEO Mike Wirth says the company remains open to more acquisitions and to increasing shareholder distributions this year.   

Domino’s Pizza (+0.1%): Revenue miss but earnings beat, global retail sales rose 5.8% but US same-store sales increased just 0.1%, CEO Russell Weiner says the company will benefit from recent deal with Uber – Where over two-thirds of stores globally will have access to Uber Eats 


  • US manufacturing PMI beats but services soften (Reuters)

  • Eurozone manufacturing PMIs post 13th straight contraction (FT)

  • UK economy close to stalling after PMI shows drop in services sector activity (Reuters)

  • Japan's PMI shows output rising but new orders deteriorating (S&P)

  • Australia PMI sees first fall in business activity since March, services contract (S&P)

  • China's Politburo signal easing property policies (Bloomberg)

  • Demand for US homes continues to outpace supply, lifting prices (Bloomberg)

Deeper Dive: Looking Ahead

Your week ahead in economics

Let's be honest. The week really starts tomorrow so let's get you set for what's going to be an enormous week in the world of macro.

  • Australian Q2 CPI drops tomorrow at 11:30 am AEST. The current headline estimate is for 1% quarter-on-quarter growth, making for a 6.2% year-on-year figure. The highest estimate so far in the Bloomberg survey is 6.7% and the lowest estimate is 5.8%. A step down was always in the cards but the question is the pace. After tomorrow's figure, the question turns to the RBA's "pain threshold" - how high will it tolerate inflation at the quarterly level before it decides it's done enough work? Some would argue that inflation with a low-6 or high-5 handle will be enough to warrant one more hike. Others say we could see as many as three more hikes if the RBA cannot stand inflation not having a 3-handle at least in front of it. We'll find out how they feel on August 1st at 2:30pm.

  • The US Federal Reserve hands down its latest decision on Thursday morning. Every human and their dog expects the Fed will hike one more time. Where they differ is if they will go again after this upcoming hike. The current read from the CME Group FedWatch tool suggests this is the last one with cuts starting in Q1 2024. (See chart below)

  • The ECB also meets this week and it's widely expected to increase rates by 25 basis points as well. The data has not fundamentally rocked the boat so this hike is also baked in. The bigger problem for the Eurozone is the stagnation question. Core inflation is actually on the way back up and the German economy - Europe's largest - is in recession.

  • Finally, the Bank of Japan meets on Friday and .... well, they're not going to move the dial on yield curve control so let's just move on.

Your week ahead in earnings

Rio Tinto (ASX: RIO) is the major warm up act this week ahead of a humongous reporting season which starts in earnest next Tuesday. While most of the sell-side has Rio Tinto on a buy/outperform rating, UBS doesn't share that view. It remains cautious about iron ore and believes the risk/reward is skewed to the downside. The broker's price target is $95/share - well off the ~$115 price it currently has.

In the US, quarterly earnings really kicks it up a notch (to quote Emeril Lagasse) with 173 S&P 500 companies reporting this week. Some of the ones you should watch include:

  • Tonight before the open: General Motors (NYSE: GM), 3M (NYSE: MMM)

  • Tomorrow morning after the close: Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), Snap Inc. (NASDAQ: SNAP), Visa (NYSE: V)

  • Wednesday: AT&T (NYSE: T), Coca Cola (NYSE: KO), Meta (NASDAQ: META), eBay (NASDAQ: EBAY)

  • Thursday: McDonalds (NYSE: MCD), Mastercard (NYSE: MA), Southwest Airlines (NYSE: LUV), Ford (NYSE: F), Intel (NASDAQ: INTC)

  • Friday: ExxonMobil (NYSE: XOM), Chevron (NYSE: CVX)

Get some rest, folks. It's going to be HUGE.

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Blackmores (BKL) – $3.29

  • Dividends paid: None

  • Listing: None

Economic calendar (AEST):

  • 9:00 am: Korea GDP

  • 6:00 pm: Germany IFO Business Climate Index

Written By

Hans Lee

Senior Editor

Hans is one of the Senior Editors at Livewire Markets and Market Index. He created Signal or Noise and leads the team's coverage of the global economy and fixed income markets.

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