Market Wraps

Morning Wrap: ASX 200 to rise, Resource stocks to bounce, S&P 500 edges higher

Wed 07 Feb 24, 8:36am (AEDT)

ASX 200 futures are trading 55 points higher, up 0.73% as of 8:30 am AEDT.

The S&P 500 is bouncing from a Fed induced selloff in the previous two sessions, yields and rate cut expectations begin to stabilise after recent Fed and data-induced volatility, China's stock market surges as Beijing intensifies support efforts, BP tops earnings expectations and plans to return 80% of surplus cash to investors and why the resource sector is set to have a solid day on Wednesday.

Let's dive in.

Overnight Summary

Wed 07 Feb 24, 8:24am (AEDT)

Name Value % Chg
Major Indices
S&P 500 4,954 +0.23%
Dow Jones 38,521 +0.37%
NASDAQ Comp 15,609 +0.07%
Russell 2000 1,951 +0.71%
Country Indices
Canada 20,958 +0.41%
China 2,789 +3.23%
Germany 17,033 +0.76%
Hong Kong 16,137 +4.04%
India 72,186 +0.63%
Japan 36,161 -0.53%
United Kingdom 7,681 +0.90%
Name Value % Chg
Commodities (USD)
Gold 2,052.3999 +0.52%
Iron Ore 128.94 +0.24%
Copper 3.7835 +0.29%
WTI Oil 73.47 +0.91%
AUD/USD 0.6523 +0.62%
Bitcoin (AUD) 66,058 +1.71%
Ethereum (AUD) 3,648 +3.91%
US 10 Yr T-bond 4.09 -1.78%
VIX 13.2 -3.44%

US Sectors

Wed 07 Feb 24, 8:25am (AEDT)

Materials +1.71%
Real Estate +1.49%
Health Care +1.09%
Industrials +0.89%
Consumer Discretionary +0.37%
Energy +0.32%
Utilities +0.31%
Financials +0.28%
Consumer Staples +0.23%
Communication Services -0.21%
Information Technology -0.48%


S&P 500 slightly higher in relatively uneventful trade (Source: TradingView)


  • ASX 200 set to bounce on Wednesday after falling 1.5% over the last two sessions

  • US bond yields eased following a ~30 bp rally for the 10-year yield over the prior two sessions, the largest two-day jump since June 2022

  • Easing yields and a weaker US dollar should see sectors such as Materials and Real Estate lead to the upside

  • S&P 500 higher overnight, staging a bit of a rally towards close after spending most of the session around breakeven

  • Relatively uneventful session, the main focus was on rate/yield stabilisation following the latest bout of Fed pivot repricing, Powell pushback and strong economic data

  • Market rate cut expectations have eased to 4-5 cuts from current midpoint, with the first cut fully priced in for May (FT)

  • NYCB sells off again but broader regional bank space holding up (Bloomberg)

  • Chinese’s CSI 1000 Index rallies 7%, its biggest on record as Beijing intensifies efforts to stem rout (Bloomberg)


  • NYCB's chief risk officer departed shortly before it revealed CRE losses (FT)

  • Toyota will boost US EV spending by $1.3bn to produce an all-electric SUV (Bloomberg)

  • DocuSign announced it would lay off 6% of its workforce (CNBC)


BP (+6.3%) – Double beat, Q4 underlying profit of US$3bn on the back of strong natural gas trading results, accelerated the pace of buybacks to US$1.75bn for 1Q24 (up from US$1.5bn), management outlined intentions to be more pragmatic in its investment decisions, plans to return 80% of surplus cash generated to investors.  

Spotify (+3.9%, down from session high of 11.4%) – Double miss, Q4 monthly active users rose 23% year-on-year to 602m (1 million above guidance), guidance for next quarter was also light across both revenue and MAUs. 

Eli Lilly (-0.2%, down from session high of 5.1%) – Double beat, Q4 revenue up 28%, earnings included first sales from Zepbound – which some analysts believe could post more than a billion dollars in sales in its first year and eventually become the biggest drug of all time, issued its full-year forecast for 2024 which was in-line with expectations. 

UBS (-5.5%) – Double miss, reported second-straight quarter of losses, raised dividend and announced plans it would resume share buybacks of up to US$1bn in the second half of 2024.


  • BoJ on track for policy shift by April, helped by wage outlook (Reuters)

  • ECB rate-cut timing tricky call, easing pace and end point up for debate (Bloomberg)

  • BoE Pill clarifies policy message, as markets evaluate rate cut timing (FT)

  • RBA leaves cash rate unchanged, says further rate hikes cannot be ruled out (Bloomberg)


  • US Treasury officials to meet with Chinese counterparts in Beijing (Bloomberg)

  • SMIC and Huawei expect to produce next-gen 5nm chips as soon as this year (FT)

  • Pentagon says not planning long-term campaign against Iran-backed militias in Iraq and Syria (Politico)

  • Blinken in Saudi Arabia as part of US push for enduring Middle East peace deal (FT)


  • Regulators to brief President Xi on China market as soon as Tuesday as rescue bets build (Reuters)

  • China sovereign fund vows to increase ETF holdings, as Beijing stepped up efforts to stem a rout with policy steps (Bloomberg)


  • German factory orders boosted by major orders but underlying trend weak (Bloomberg)

  • UK retail sales slowed in January as consumers tightened spending (Bloomberg)

  • EIA says US crude output will be flat for most of 2024 and won't reach new record until early 2025 (Bloomberg)

Industry ETFs

Wed 07 Feb 24, 8:24am (AEDT)

Name Value % Chg
Strategic Metals 46.265 +4.60%
Lithium & Battery Tech 41.06 +4.08%
Copper Miners 35.65 +1.57%
Gold Miners 27.72 +1.32%
Steel 68.7982 +0.89%
Silver 20.515 +0.22%
Uranium 30.94 -0.23%
Global Jets 19.43 +3.41%
Aerospace & Defense 124.14 +0.78%
Construction 62.735 +0.30%
Agriculture 21.74 +0.14%
Biotechnology 136.14 +0.96%
Cannabis 5.1757 +0.89%
Name Value % Chg
Bitcoin 20.425 +1.87%
Solar 42.32 +2.97%
CleanTech 8.95 +1.70%
Hydrogen 5.92 +0.51%
E-commerce 21.1 +2.23%
Electric Vehicles 23.24 +2.15%
Cybersecurity 29.88 +1.15%
Video Games/eSports 59.72 +1.07%
FinTech 24.2 +0.71%
Sports Betting/Gaming 17.96 +0.56%
Cloud Computing 22.46 +0.40%
Robotics & AI 29.07 -0.78%
Semiconductor 597.57 -1.17%

Sectors to Watch

Lithium: Lithium-related ETFs from the above watchlist (VanEck Rare Earth/Strategic Metals and Global X Lithium & Battery Tech) rallied more than 4% overnight. Lithium prices remain depressed, with spodumene concentrate prices unchanged at US$938 a tonne on the Shanghai Metals Market. My hunch is that the overnight strength was driven by a number of factors including:

  • Oversold bounce – The ETFs sold off around 6% in the previous two sessions to 25 month lows

  • Yield stabilisation and weaker US dollar – Which is generally a positive for commodity prices and the resource sector. Materials was the best performing sector on the S&P 500

  • China stock market rescue – Major Chinese benchmarks surged overnight after Chinese President Xi discussed stabilising markets with regulators. Top Chinese lithium names like Ganfeng and Tianqi rallied 7.8% and 7.0% respectively on Tuesday. The strength was a little less pronounced outside of China, with SQM and Albemarle up 2.9% and 3.95% respectively.

Materials: The above points also indicate a solid sessions for the broader resource sector. US-listed BHP and Rio Tinto shares finished 1.4% and 1.2% higher respectively. Gold miners should feel some reprieve from a pullback in yields.

Travel: I like to use the Global Jets ETF as a barometer for the airline industry, and to a lessor extent, the travel sector. The ETF holds mostly US airlines but also has some exposure to various other carriers including Qantas. The ETF rallied 3.4% overnight to a fresh 6-month high, which could see some positive flow for local travel names.

JETS 2024-02-07 08-09-12
US Global Jets ETF (Source: TradingView)

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Resmed (RMD) – $0.051

  • Dividends paid: None

  • Listing: None

Economic calendar (AEDT):

  • 9:00 am: Australia Group Industry Index (Jan)

  • 12:30 am: Canada Balance of Trade (Dec)

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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