Morning wrap: ASX set to fall as Wall Street extends losses, Biden taps into oil reserves to cool prices
ASX Futures (SPI 200) imply the ASX will open 42 points lower, down -0.56%.
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ASX Futures (SPI 200) imply the ASX will open 42 points lower, down -0.56%.
Major US indices extended losses to close out a challenging quarter, President Putin vowed to halt gas supplies to Europe unless payments are made in rubles, OPEC+ stuck to its gradual output strategy and the US is set to release a record amount of strategic oil reserves.
Let’s dive in.
Overnight Summary
Name | Value | % Chg |
|---|---|---|
US Indices | ||
 S&P 500 | 4,530 | -1.57% |
Dow Jones | 34,678 | -1.56% |
NASDAQ Comp | 14,221 | -1.54% |
Russell 2000 | 2,070 | -1.00% |
Country Indices | ||
 Canada | 21,890 | -0.84% |
 China | 3,252 | -0.44% |
 Germany | 14,415 | -1.31% |
 Hong Kong | 21,997 | -1.06% |
 India | 58,569 | -0.20% |
 Japan | 27,821 | -0.73% |
 United Kingdom | 7,516 | -0.83% |
Name | Value | % Chg |
|---|---|---|
Commodities (USD) | ||
 Gold | 1,942.2 | +0.17% |
 Iron Ore | 150.61 | +0.31% |
 Copper | 4.731 | -0.41% |
 WTI Oil | 101.2 | -6.14% |
Currency | ||
 AUD/USD | 0.748 | -0.35% |
Cryptocurrency | ||
 Bitcoin (AUD) | 61,161 | -3.63% |
 Ethereum (AUD) | 4,410 | -3.62% |
Miscellaneous | ||
U.S. 10 Year Treasury | 2.327 | -1.31% |
VIX | 20.56 | +6.36% |
Stocks
Major US indices finished the quarter on a downnote as the market pulls back from a massive win-streak. Also weighing on the markets
Russia threatening European gas supplies
Easing US personal spend data
Lack of progress between Russia and Ukraine
US 2-and-10 year Treasury yields remain on the edge of inversion
All 11 US sectors fell, led by financials, consumer discretionary and tech stocks
Defensive sectors including utilities, staples and real estate held up better-than-most
62% of US stocks declined
59% of US stocks trade below their 200-day moving average (58% yesterday, 60% a week ago)
Chipmaker AMD fell -8.3% after analysts at Barclays downgraded the stock to equal weight, flagging concerns over the PC market
GameStop shares are up more than 15% in after-hours trading after announcing plans for a stock split. The meme stock is seeking shareholder approval to increase the number of common stock from 300m to 1bn
Economy
US consumer spending rose 0.2% in February as high inflation weighed. Economists polled by The Wall Street Journal had forecast a 0.5% increase
US Personal Consumption Index - which includes gas and groceries - jumped 5.4% in February. This reading is the Fed’s preferred inflation measure
Chinese manufacturing and services PMIs simultaneously contracted in February for the first time since the initial covid outbreak in 2020
Manufacturing PMI fell to 49.5 from 50.2
Non-manufacturing PMI eased to 48.4 from 51.6
A reading below 50 points indicates contraction
Commodities
Iron ore unchanged around US$150 a tonne. Market participants remain conservative for physical demand as covid cases spike in China, sources told Fastmarkets
Oil prices fell below US$110 a barrel after President Joe Biden ordered the release of 1m barrels per day of oil to cool prices
Gold inched higher as a risk-off attitude returned
US Sectors
Sector | % Chg |
|---|---|
| Utilities | -0.17% |
| Consumer Staples | -0.43% |
| Real Estate | -1.18% |
| Health Care | -1.18% |
| Materials | -1.35% |
| Energy | -1.39% |
Sector | % Chg |
|---|---|
| Industrials | -1.57% |
| Information Technology | -1.59% |
| Consumer Discretionary | -1.95% |
| Communication Services | -2.01% |
| Financials | -2.32% |
Industry ETFs
Name | Value | % Chg |
|---|---|---|
Commodities | ||
| Uranium | 25.69 | +1.83% |
| Strategic Metals | 117.9 | +0.32% |
| Gold | 180.58 | +0.06% |
| Silver | 22.94 | -0.26% |
| Steel | 68.19 | -0.51% |
| Lithium & Battery Tech | 77.55 | -0.74% |
| Copper Miners | 45.92 | -0.89% |
| Nickel | 43.2835 | -0.96% |
| Aluminum | 74.3356 | -2.52% |
Industrials | ||
| Global Jets | 21.69 | +0.32% |
| Aerospace & Defense | 112.24 | -1.29% |
Healthcare | ||
| Biotechnology | 130.97 | -0.51% |
| Cannabis | 5.63 | -3.02% |
Name | Value | % Chg |
|---|---|---|
Cryptocurrency | ||
| Bitcoin | 29.5 | -3.19% |
Renewables | ||
| CleanTech | 16.72 | -0.42% |
| Solar | 75.78 | -0.42% |
| Hydrogen | 19.16 | -0.52% |
Technology | ||
| Cybersecurity | 31.48 | -0.19% |
| Cloud Computing | 22.28 | -1.30% |
| Robotics & AI | 29.5 | -1.66% |
| Sports Betting/Gaming | 20.38 | -1.96% |
| Electric Vehicles | 28.12 | -1.99% |
| Semiconductor | 484.3 | -2.28% |
| FinTech | 32.84 | -2.50% |
| E-commerce | 22.78 | -2.72% |
| Video Games/eSports | 59.72 | -2.73% |
ASX Morning Brief
Investors should expect the week to finish on a negative note as US indices kept on falling towards close, coupled with the decline in SPI futures.
There were a few major ETFs that managed to eke out some small gains overnight including US Jets, Rare Earths/Strategic Metals and Uranium.
It will be interesting to see if local names can withstand the weaker session.
#1 Tech
Tech continues to stand out given large declines in noteworthy stocks, including:
Etsy -7.6%
eBay -3.5%
Block -3.2%
PayPal -2.4%
The S&P/ASX 200 Info Tech Index fell -2.2% yesterday, in-line with how US tech stocks performed.
It wouldn't be surprising to see another weak session, headlined by names like Block (ASX: SQ2).
#2 Energy
Oil prices fell after OPEC+ decided to stick to its gradual output strategy.
Yesterday afternoon, the Biden administration announced plans to release a record 180m barrels from strategic petroleum reserves, showing the public he is trying to push gas prices down.
"This proposed record SPR release could have also been a chess move to try to pressure OPEC+ into delivering more output, but obviously had no impact," said Oanda senior market analyst, Ed Moya.
"This oil market will remain tight and any coordinated tapping of strategic reserves will only be effective if peace talks in the war in Ukraine are headed in the right direction. If it becomes clear that a major de-escalation in the war is not going to happen, then oil could surge back to the recent highs."
Key Events
ASX corporate actions occurring today:
Ex-dividend: MVB, NBI, VAS
Dividends paid: CAJ, FWD, GEM, GNE, IFL, KSC, LSF, MCY, PFG, PPT, SLH, SUN, TLS, TWE
Listing: None today
Issued shares: AHF, ANL, AO1, ARG, ASN, AVR, BEN, BLG, BRK, CEL, CNU, ELT, EM2, ENT, EQT, FBU, GDI, GL1, IMA, JRL, LPD, MFF, MVL, NCM, NWE, PH2, PPH, PRM, RUL, SHH, SMR, STG, SZL, TGR
Things of interest (AEDT):
European Union Inflation Rate (March) at 8:00 pm
US Unemployment Rate (March) at 11:30 pm
US Non-farm payrolls (March) at 11:30 pm
