Market Wraps

Morning Wrap: ASX 200 to rise, more sideways trade for S&P 500 + Oil hits 5-month low

Wed 06 Dec 23, 8:35am (AEDT)

ASX 200 futures are trading 27 points higher, up 0.38% as of 8:20 am AEST.

US stocks were mixed overnight after job openings hit levels not seen in more than two-and-a-half years, oil prices fell for a fourth straight session to a 5-month low, US bond yields continue to grind lower towards 4-6 month lows, Piper Sandler flags a "substantial deterioration" in global lithium markets and a few charts of interest.

Let's dive in.

Overnight Summary

Wed 06 Dec 23, 8:31am (AEDT)

Name Value % Chg
Major Indices
S&P 500 4,567 -0.06%
Dow Jones 36,125 -0.22%
NASDAQ Comp 14,230 +0.31%
Russell 2000 1,856 -1.38%
Country Indices
Canada 20,376 -0.17%
China 2,972 -1.67%
Germany 16,533 +0.78%
Hong Kong 16,328 -1.91%
India 69,296 +0.63%
Japan 32,776 -1.37%
United Kingdom 7,490 -0.31%
Name Value % Chg
Commodities (USD)
Gold 2,037.4 -0.47%
Iron Ore 130.46 -
Copper 3.786 -1.11%
WTI Oil 72.41 -1.25%
Currency
AUD/USD 0.6552 -1.00%
Cryptocurrency
Bitcoin (AUD) 66,877 +4.78%
Ethereum (AUD) 3,468 +1.92%
Miscellaneous
US 10 Yr T-bond 4.171 -2.73%
VIX 12.85 -1.76%

US Sectors

Wed 06 Dec 23, 8:31am (AEDT)

SECTOR % CHG
Information Technology +0.82%
Consumer Discretionary +0.32%
Communication Services +0.22%
Health Care -0.17%
Real Estate -0.45%
Financials -0.51%
SECTOR % CHG
Consumer Staples -0.79%
Utilities -0.81%
Industrials -0.86%
Materials -1.37%
Energy -1.70%

S&P 500 SESSION CHART

S&P 500 intraday
S&P 500 breakeven in a relatively uneventful session (Source: TradingView)

MARKETS

  • S&P 500 closed around breakeven in a relatively uneventful session

  • Almost a third of the S&P 500 has RSIs over 70, according to Goldman Sachs

  • Bond yields continue to grind lower, with the US 2-year close to a 6-month low and 10-year at a 4-month low 

  • Crude oil fell for a 4th straight session to lowest level since July 7

  • Market narratives remains unchanged and focused on disinflation momentum, peak Fed, growing soft landing expectations, a rotation from the Magnificent Seven to laggards (small caps, unprofitable tech and growth), big systematic fund buying and a sizeable swing in sentiment

STOCKS

  • Birkenstock and other new IPOs finally close above listing price (Bloomberg)

  • Apple supplier Foxconn raises growth outlook (Reuters)

  • Nio shares climb on smaller-than-expected Q3 loss (CNBC)

  • Albemarle downgraded by Piper Sandler to Underweight, citing a ‘“substantial deterioration” in global lithium markets (CNBC)

  • Eli Lilly rolls outs weight-loss drug Zepbound at pharmacies while Wegovy faces shortages (CNBC)

CENTRAL BANKS

  • Fed cuts possible in 1Q24 on falling inflation and easing job market (Axios)

  • RBA keeps rate on hold but conditions further tightening on data and potential risks (Bloomberg)

  • ECB hawk Schnabel softens stance, says hikes are done (Reuters)

GEOPOLITICS

  • Israel continues to widen campaign against Hamas (NY Times)

  • Israel touts high-tech evacuation plan amid rising Gaza death toll (FT)

  • Ukraine expects large risk of losing war if US congress delays aid (Reuters)

CHINA

  • China services activity rises to 3-month high (Reuters)

  • China seen targeting 'ambitious' 2024 growth target of about 5% (FT)

  • Moody's downgrades China's credit rating to "negative" to "stable", cites costs to bail out local government and state firms and control its property crisis would weigh on the economy (AFR)

ECONOMY

  • US job openings hit near three year low, well below consensus (Reuters)

  • US service sector picks up in November (Reuters)

  • BofA says signs US economy is slowing, remains positive in outlook (Bloomberg)

  • Japan service activity grows at slowest pace in a year in November (Reuters)

  • Tokyo core inflation eases but services inflation hits 29 year high (Bloomberg)

  • South Korean inflation slows to 3.3%, more than expected (Bloomberg)

  • UK services sector expanding at fastest rate since July (Reuters)

  • Eurozone PMI stabilises at weak levels and marks the best print in four months (Reuters)


Industry ETFs

Wed 06 Dec 23, 8:31am (AEDT)

Name Value % Chg
Commodities
Silver 22.12 -1.51%
Steel 69.25 -1.55%
Gold Miners 30.48 -1.74%
Lithium & Battery Tech 45.87 -2.05%
Uranium 28.76 -2.14%
Copper Miners 34.33 -2.17%
Strategic Metals 54.01 -4.17%
Industrials
Agriculture 22.01 +0.14%
Construction 56.63 -0.46%
Aerospace & Defense 121.19 -0.86%
Global Jets 17.78 -1.55%
Healthcare
Biotechnology 122.9 -0.40%
Cannabis 5.84 -2.83%
Name Value % Chg
Cryptocurrency
Bitcoin 21.78 +4.96%
Renewables
Solar 47.23 -1.07%
CleanTech 9.96 -1.39%
Hydrogen 6.7 -2.62%
Technology
Cybersecurity 27.5 +0.33%
Cloud Computing 21.21 -0.47%
Robotics & AI 26.57 -0.56%
Semiconductor 507.38 -0.57%
FinTech 23.02 -0.60%
Electric Vehicles 22.99 -0.61%
Video Games/eSports 54.52 -0.94%
E-commerce 19.88 -1.14%
Sports Betting/Gaming 16.01 -1.36%

Be Careful What You Wish For

US job openings came in at 8.7 million, well below consensus expectations of 9.3 million and down substantially from September 9.5 million. This marked a third straight month of declines and the lowest reading since March 2021.

Sectors that flagged the largest decline in job openings include: Healthcare and Social Assistance (-236,000), Finance and Insurance (-168,000) and Real Estate (-49,000).

The underwhelming jobs data continues to feed into Peak Fed and rate cut hopes. But be a little careful for what you wish for.

SPX 2023-12-06 08-11-35
S&P 500 (Blue) vs. JOLTs Job Openings (Red) indexed to 100 (Source: TradingView)

The Fakeout

The gold chart went from an epic breakout to all-time highs to an equally epic fakeout in a matter of hours on Monday. The spike occurred during an illiquid time period on Monday morning and may reflect a melting pot of stop loss orders and fresh longs.

GOLD 2023-12-06 08-13-34
Gold weekly chart (Source: TradingView)

Copper also experienced a brief trendline break to a 4-month high before whipping back.

HG1! 2023-12-06 08-15-39
Copper weekly chart (Source: TradingView)

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: None

  • Dividends paid: None

  • Listing: None

Economic calendar (AEDT):

  • 9:00 am: AI Group Industry Index (Nov)

  • 11:30 am: Australia GDP Growth (Q3)

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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