Market Wraps

Morning Wrap: ASX 200 to rise + the Federal Reserve signals a “skip”

Thu 15 Jun 23, 8:28am (AEST)

ASX 200 futures are trading 20 points higher, up 0.28% as of 8:20 am AEST.

The S&P 500 whipsawed on the hawkish Fed pause while the Nasdaq pushed higher and closed at best levels. Powell reiterated "somewhat" higher rates by year end, the Fed's economic projections upgraded its GDP outlook, US producer prices fell by more than expected, China readies more stimulus and Citi's take on coal stocks.

Let's dive in.

Overnight Summary

Thu 15 Jun 23, 8:28am (AEDT)

Name Value Chg %
Major Indices
S&P 500 4,373 +0.08%
Dow Jones 33,979 -0.68%
NASDAQ Comp 13,626 +0.39%
Russell 2000 1,874 -1.17%
Country Indices
Canada 20,015 +0.12%
China 3,229 -0.14%
Germany 16,311 +0.49%
Hong Kong 19,408 -0.58%
India 63,229 +0.14%
Japan 33,502 +1.47%
United Kingdom 7,603 +0.10%
Name Value Chg %
Commodities (USD)
Gold 1,955.60 -0.68%
Iron Ore 112.75 -
Copper 3.856 -0.36%
WTI Oil 68.64 +0.54%
AUD/USD 0.6798 +0.04%
Bitcoin (AUD) 36,927 -2.84%
Ethereum (AUD) 2,434 -4.80%
US 10 Yr T-bond 3.796 -1.12%
VIX 14 -5.00%

US Sectors

Thu 15 Jun 23, 8:28am (AEDT)

Sector Chg %
Information Technology +1.14%
Consumer Staples +0.56%
Real Estate +0.32%
Communication Services +0.13%
Utilities -0.07%
Consumer Discretionary -0.11%
Industrials -0.29%
Financials -0.37%
Materials -0.43%
Energy -1.12%
Health Care -1.12%


S&P 500 Intraday
S&P 500 choppy but finished around breakeven (Source: TradingView)


  • S&P 500 finishes around breakeven, traded between highs of 0.5% and lows of -0.7%

  • One of the best performing Fed days – The S&P 500 has averaged a one-day decline of more than 1% across the last six FOMC and Powell press conferences

  • Sector performance was mixed, largely focused towards tech and defensives

  • Fed leaves rates steady, sees two small hikes by year end (Reuters)

  • Analysts expect risk assets to remain buoyant in the short term (Reuters)

  • Traders position for a Fed pause, start unwinding cut wagers (Bloomberg)


  • Amazon Web Services considering using new AI chips from AMD (Reuters)

  • Logitech shares tumble as CEO Bracken Darrell steps down (Reuters)

  • UnitedHealth flags seniors are getting procedures they delayed during Covid (Reuters)

  • Toyota re-elects chairman Akio Toyoda and outlines EV strategy (Reuters)

  • Advanced Micro Devices reveals its largest artificial intelligence chips (CNBC)


  • US producer inflation subsides as energy, food prices fall (Reuters)

  • China seeks measures to reduce business costs like VAT, lower rates loans (Reuters)

  • China readies for stimulus as recovery slows (FT)

  • China's PBOC may cut key policy rate Thursday (Reuters)

  • Generative AI to add up to US$4.4tn pa of value to global economy (NY Times)

  • Eurozone industrial production rebounds in April, beats expectations (Reuters)

  • South Korea import and export prices fall the most since 2020 (Yonhap)

  • US plans to purchase ~12m barrels of oil this year, begins to refill SPR (Bloomberg)

Industry ETFs

Thu 15 Jun 23, 8:28am (AEDT)

Description Last Chg %
Copper Miners 39.27 +2.45%
Nickel 28.4 +1.65%
Silver 21.97 +1.06%
Aluminum 45.875 +0.44%
Steel 62.84 +0.06%
Gold 180.64 +0.06%
Lithium & Battery Tech 64.96 -0.47%
Strategic Metals 85.28 -0.54%
Uranium 22.23 -1.29%
Global Jets 20.37 +0.69%
Aerospace & Defense 114.5 -1.09%
Biotechnology 130.3 -0.80%
Cannabis 7.16 -2.19%
Description Last Chg %
Bitcoin 14.48 0.00%
CleanTech 15.07 -0.20%
Solar 71.62 -0.95%
Hydrogen 9.8 -2.58%
Semiconductor 516.5 +1.42%
Video Games/eSports 57.16 +1.28%
E-commerce 18.245 +0.69%
Robotics & AI 29.42 +0.41%
Cloud Computing 20.21 +0.30%
Cybersecurity 24.63 +0.29%
Electric Vehicles 26.18 +0.04%
FinTech 21.79 -0.09%
Sports Betting/Gaming 17.3951 -1.36%

Deeper Dive

The Fed: A Hawkish Pause

The Fed kept rates steady at 5.0% to 5.25% after 10 consecutive hikes, in-line with consensus expectations. The press release noted "holding the target range steady at this meeting allows the Committee to assess additional information and its implications for monetary policy."

The main takeaways from the Fed's economic projections included:

  • Dot plot terminal rate jumps to 5.6%

  • The above implies two more rate hikes

  • GDP growth outlook upgraded from 0.4% to 1.0%

  • Unemployment expected to stay low at 4.1% by year end (3.7% now)

  • Core inflation expectations higher at 3.9% by year end (from March projection of 3.6%)

Powell's post-FOMC press conference highlights:

  • More hikes to come: "Nearly all Committee participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year, but at this meeting, considering how far and how fast we've moved, we judged it prudent to hold the target range steady."

  • Inflation risks: "I still think ... that the risks to inflation are to the upside still. So we don't think we're there with inflation yet ... what we'd like to see is credible evidence that inflation is topping out."

  • Tricky core inflation: "If you look at core PCE inflation overall, over the last six months, you're not seeing a lot of progress. It's running at a level over 4.5%, far above our target and not really, you know, moving down. We want to see it moving down decisively, that's all."

  • No cuts: "Not a single person on the Committee wrote down a rate cut this year, nor do I think it is at all likely to be appropriate."

Other things you should know:

  • The market is no longer pricing a cut this year but it's also not yet pricing in a second hike, according to CME's Fedwatch Tool

  • Rate hikes tend to hit company earnings with an approximate 17 month lag. The most aggressive tightening cycle should begin to follow through in the second half of 2023

  • Then again, stocks tend to bottom out before earnings

  • One of the reasons why the Fed can't hike too aggressively is that unrealised losses at FDIC-insured banks totaled around US$500bn in the first quarter of 2023

Coal Stocks: Growing downside risks

Nothing says a bear market in commodities quite like a call from Citigroup which suggests global gas prices could fall 50%. That also spells trouble for thermal coal prices, which could trade at just 1/4 of its December 2022 levels in the coming three months.

The ASX has two major thermal coal plays - Whitehaven Coal (ASX: WHC) and New Hope Coal (ASX: NHC). And although both companies play in the same commodity, Citi has reached two very different valuations on those companies.

Provided its forecasts are right, Citi's Whitehaven FY23 EBITDA forecasts have been slashed by 49% and FY24 EBITDA could be down by as much as 43% on top of that. And yet ... Whitehaven is a high-risk BUY at Citi with a $7.80 target price.

New Hope Coal's EBITDA forecasts are slashed by 25 and 24% respectively for FY23 and FY24. And yet, it moves to a SELL rating with a $4.0 target price.

Quote of the Day: Tech > Oil

Today's top investor quote comes from Chris Iggo of AXA Investment Management. Iggo is not always the first to jump on a bullish trend but he is one to know a trend when he sees it.In a recent note sent to clients, he noted that the huge rally in the NASDAQ means more than just a 40% surge since October 2022's lows.

It may actually be more a symbol of American exceptionalism.

For anyone that's short the US market, that's rough."There are always storm clouds for markets. Yet maybe we are in a period of reassessment ... The pain trade, as I discussed with a good contact at one of the investment banks last week, might be that markets keep performing. If you are short, that hurts."

It will not surprise you then when I tell you what the note was called - Better Tech than Oil.

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Incitec Pivot (IPL) – $0.10

  • Dividends paid: ResMed (RMD) – $0.044, Dalrymple Bay Infrastructure (DBI) – $0.05, Waterco (WAT) – $0.05

  • Listing: None

Economic calendar (AEST):

  • 11:30 am: Australia Unemployment Rate

  • 12:00 pm: China Industrial Production

  • 12:00 pm: China Fixed Asset Investment

  • 12:00 pm: China Retail Sales

  • 10:15 pm: ECB Interest Rate Decision 

Written By

Hans Lee

Content Editor

Hans is a Content Editor at Livewire Markets and Market Index. He created Signal or Noise and helps write the LW-MI Morning Wrap on Tuesdays and Thursdays.

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