Market Wraps

Morning Wrap: ASX 200 to tumble, Dow logs worst day since March 2023 + US CPI breakdown

Wed 14 Feb 24, 8:35am (AEST)

ASX 200 futures are trading 90 points lower, down 1.21% as of 8:30 am AEDT.

Major US benchmarks sold off sharp after inflation data came in hotter-than-expected, the Dow logged its worst day since March 2023, US bond yields up to 2-month highs as rate cut expectations are pushed out to July, the key nuggets from Bank of America's February Global Fund Manager Survey plus more 1H24 results from companies including Commonwealth Bank and IDP Education.

Let's dive in.

Overnight Summary

Wed 14 Feb 24, 8:24am (AEDT)

Name Value % Chg
Major Indices
S&P 500 4,953 -1.37%
Dow Jones 38,273 -1.35%
NASDAQ Comp 15,656 -1.80%
Russell 2000 1,961 -4.11%
Country Indices
Canada 20,585 -2.29%
China 2,866 +1.28%
Germany 16,881 -0.92%
Hong Kong 15,747 -0.83%
India 71,555 +0.68%
Japan 37,964 +2.89%
United Kingdom 7,512 -0.81%
Name Value % Chg
Commodities (USD)
Gold 2,005.5 -1.41%
Iron Ore 128.87 +0.09%
Copper 3.7075 -0.42%
WTI Oil 77.76 +0.91%
AUD/USD 0.6452 -1.19%
Bitcoin (AUD) 76,625 -1.39%
Ethereum (AUD) 4,080 -0.21%
US 10 Yr T-bond 4.316 +3.45%
VIX 16.54 +18.74%

US Sectors

Wed 14 Feb 24, 8:24am (AEDT)

Health Care -0.87%
Consumer Staples -0.98%
Industrials -1.01%
Energy -1.15%
Financials -1.28%
Communication Services -1.34%
Materials -1.41%
Information Technology -1.56%
Utilities -1.69%
Real Estate -1.83%
Consumer Discretionary -1.96%


SPX 2024-02-14 08-15-28
S&P 500 experiences a modest rebound in the last hour of trading but still closes substantially lower (Source: TradingView)


  • ASX 200 set to fall on hotter-than-expected US inflation data

  • Weakness to be driven by yield sensitive real estate and utilities stocks, US dollar sensitive resource sector as well as discretionary and tech sectors

  • Companies set to report today include Commonwealth Bank, Computershare, Domain Group, Downer EDI, Dexus, Evolution Mining, GUD Holdings and more

  • Consensus numbers for Commonwealth Bank include net interest income of $11.47bn, NIM of 2.00%, cash NPAT of $4.95bn and interim dividend of $2.10 per share

  • Consensus numbers for IDP Education include revenue of $562m and adjusted NPAT of $96.3m

  • Senex Energy remains interested in Incitec Pivot's fertiliser unit (AFR)


  • S&P 500 lower but closed well off session lows of -2.02%

  • Small-caps underperformed with Russell 2000 experiencing its worst session since Jun-22

  • Hot inflation data has more than halved the 170 bp of rate cuts expected earlier this year

  • Bond yields up, US 2-year up 18 bps to 2-month high

  • BofA survey shows big exposure to tech, lower cash levels and easing macro worries (Bloomberg)

  • US equities may be flashing sell signal for first time since late August (Bloomberg)

  • Money markets show impact of ECB's liquidity drain (Bloomberg)

  • US tech rally may be fueling FOMO in overall market (CNBC)


  • Morgan Stanley says earnings transcript mentions of “operational efficiency” are at historically elevated levels and more companies are investing in technologies that can drive future productivity like AI

  • Icahn takes nearly 10% stake in Jet Blue (CNBC)

  • Uber, Lyft and DoorDash drivers plan strike on Valentine's Day (NBCNews)

  • Standard Chartered mulls investment banking division restructure (Bloomberg)

  • Paramount Global to lay off 800 employees (Bloomberg)

  • Coca-Cola CEO says inflation is falling in most geographies (CNBC)

  • Krispy Kreme guides to higher prices this year due to soaring sugar prices (Bloomberg)


  • RBA's Kohler sees signs of easing wage pressure, service inflation to cool gradually (RBA)

  • RBA's Kohler reiterates central bank's focus on high services inflation (Bloomberg)

  • RBNZ rate hike calls facing pushback (Bloomberg)


  • CIA and Mossad chiefs to meet senior Egyptian and Qatari officials to revive peace talks as Biden presses for ceasefire (FT)

  • EU's top diplomat slams US for sending arms to Israel as Gaza deaths mount (Politico)

  • US Senate passes US$95bn aid package for Ukraine, Taiwan, and Israel; bill still faces uncertainty in the House (Reuters)


  • Resilient UK wage growth gives BoE new grounds for caution on rate cuts (FT)

  • Swiss CPI slows more than expected in January (Reuters)

  • Japan's economy set to slip to world's fourth largest on weak yen, aging demographics (Bloomberg)

  • Japan wholesale prices gain higher than expected 0.2% in January (Nikkei)

  • Australia business conditions remain subdued, consumer confidence rises (Bloomberg)

Industry ETFs

Wed 14 Feb 24, 8:24am (AEDT)

Name Value % Chg
Silver 20.2 -2.70%
Copper Miners 34.135 -3.00%
Steel 67.92 -3.05%
Uranium 28.7701 -3.33%
Lithium & Battery Tech 40.97 -3.65%
Gold Miners 25.895 -5.11%
Strategic Metals 46.23 -5.36%
Agriculture 21.985 -0.29%
Global Jets 19.68 -0.91%
Aerospace & Defense 123.6 -1.03%
Construction 63.7 -3.56%
Cannabis 5.145 -0.10%
Biotechnology 132.3 -2.55%
Name Value % Chg
Bitcoin 23.44 -1.60%
CleanTech 9.32 -5.19%
Hydrogen 5.825 -5.59%
Solar 44.52 -5.88%
Video Games/eSports 59.59 -1.44%
Semiconductor 615.38 -2.05%
Cybersecurity 30.75 -2.07%
Robotics & AI 29.28 -2.37%
E-commerce 21.02 -2.82%
Sports Betting/Gaming 17.8952 -3.09%
Electric Vehicles 23.32 -3.28%
FinTech 24.6 -3.34%
Cloud Computing 22.48 -3.60%

The Hotter Than Expected CPI

January inflation data was a bit of a disappointment and pushed back Fed rate cut expectations. Here are the key numbers:

  • Headline inflation up 0.3% month-on-month, hotter than 0.2% consensus

  • Headline inflation up 3.1% year-on-year, down from 3.4% in the previous month but above 2.9% consensus

  • Core inflation up 0.4% month-on-month, above 0.3% consensus

  • Core inflation up 3.9% year-on-year, up from 3.7% in the previous month and above the 3.7% forecast

  • Three-month annualised core CPI accelerated to 4.0% from 3.3% last month

CPI in a nutshell – Progress continues to be made at the headline level but core inflation refuses to budge. Core services remains sticky and shelter inflation is not decreasing as rapidly as expected.

Goldman's view – “... largely reflected start-of-year price increases for labor-reliant categories such as medical services, car insurance and repair, and daycare, and we assume inflation in these categories returns to the previous trend on net in February and March ..."

Citi's view – "This CPI report is not the "good data" the Fed was looking for. The core reading was 0.39% MoM relative to consensus for 0.2-0.3%. The strength was partly in persistently hot owner's equivalent rent up 0.56% MoM. While direct rents slowed to 0.36% MoM this is flagging a major risk that the rapid rise in single-family home prices will flow through to CPI inflation and keep core inflation from returning to 2%."

Too add some perspective, owner's equivalent rent (OER) surged to an annualised 6.9%, the highest since April 2023. OER accounts for approximately 34% of core CPI.

Higher for Longer Returns

Markets are now pricing in just four rate cuts in 2024, down from expectations of six rate cuts just a few weeks ago.

The first rate cut has been pushed back to June and the likelihood of a rate cut in March has shrunk to just 8.5%, down from around 90% just six weeks ago.

2024-02-14 08 11 55-CME FedWatch Tool - CME Group
Source: CME Fedwatch Tool

BofA’s Global Fund Manager Survey

Here are the key takeaways from Bank of America’s February Global Fund Manager survey.

  • Global growth expectations highest in two years

  • Investors cut cash levels by 0.6pp to 4.2%, which historically is followed by an equity rally of around 4% over subsequent three months

  • Investors predict no recession for the first time since April 2022

  • Global equity allocations are the highest in two years

  • US stock allocations highest since November 2021 and tech exposure highest since August 2020

  • Long Magnificent 7 remains the most crowded trade while higher inflation replaced geopolitics as the biggest tail risk 

BofA FMS cash levels nears the 4.0% sell signal (Source: BofA)
Investors are all-in tech stocks (Source: BofA)

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Plato Income Maximiser (PL8) – $0.006, VGI Partners (VG1) – $0.05, Dicker Data (DDR) – $0.15

  • Dividends paid: Mayfield Group (MYG) – $0.01, Charter Hall Long WALE REIT (CLW) – $0.065

  • Listing: None

Economic calendar (AEDT):

  • 6:00 pm: UK Inflation (Jan)

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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