Market Wrap

Morning Wrap: ASX set to rally as Wall Street extends rebound on easing inflation expectations

Mon 27 Jun 22, 8:37am (AEST)

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ASX Futures (SPI 200) imply the ASX 200 will open 103 points higher, up 1.6%.

Wall Street rallied on easing inflation expectations, tech M&A still setting records in 2022, Citi analysts call Microsoft a ‘top pick’ and US air passengers bounces back to pre-covid levels.

Let’s dive in.

Overnight summary

Sun 26 Jun 22, 10:37pm (AEST)

Name Value Chg %
Major Indices
S&P 500 3,912 +3.06%
Dow Jones 31,501 +2.68%
NASDAQ Comp 11,608 +3.34%
Russell 2000 1,766 +3.16%
Country Indices
Canada 19,063 +1.85%
China 3,350 +0.89%
Germany 13,118 +1.59%
Hong Kong 21,719 +2.09%
India 52,728 +0.88%
Japan 26,492 +1.23%
United Kingdom 7,209 +2.68%
Name Value Chg %
Commodities (USD)
Gold 1,838.40 +0.44%
Iron Ore 129.71 -
Copper 3.747 +0.16%
WTI Oil 106.80 -0.76%
AUD/USD 0.6945 +0.34%
Bitcoin (AUD) 30,677 -1.32%
Ethereum (AUD) 1,777 -1.45%
US 10 Yr T-bond 3.125 +1.86%
VIX 27 -6.27%


US stocks rallied on easing inflation expectations and optimistic comments from Fed St Louis president James Bullard. A few positive headlines and an arguably oversold market has some investors buying up heavily discounted stocks. The rebound was led by growth sectors while defensives took a relative breather.   

  • All 11 US sectors rallied

  • Materials, Financials, Discretionary, Tech and Industrials all rose at least 3%

  • Energy, Healthcare, Utilities, Staples and Real Estate underperformed benchmarks

  • 75% of US stocks advanced

  • 74% of US stocks trade below their 200-day moving averages (77% last Friday, 79% a week ago) 


  • Zendesk (+28%) received a takeover offer from a group of private equity firms. The all-cash deal values the customer service and sales software company at US$10.2bn. Before the takeover, Zendesk shares were down -44% year-to-date

    • Tech M&A still setting records in 2022, largely due to mega deals such as Activision Blizzard (US$74bn), VMware (US$61bn) and Twitter (US$44bn)

  • Carnival Cruise Lines (+12.4%) said it had its best booking volumes since the start of the pandemic. The travel company said cash from operations turned positive in April and was positive in the June quarter

  • Wells Fargo (+7.6%) shares rallied after the Fed said Wells Fargo, alongside other large banks, passed the central bank’s annual stress test

  • FedEx (+6.6%) expects adjusted earnings to grow in FY22

  • Microsoft (+3.4%) after Citi analysts said the stock was a ‘top pick’ amid the tech selloff


  • UK retail sales fell -0.5% between April and May

    • Retail sales slumped -4.7% compared to a year ago. which was well-below forecasts of -4.1%

    • Decline was largely driven by a decline in food sales, according to the Financial Times

  • US consumer sentiment index was 50.0 in June (published by the University of Michigan)

    • Down from 58.4 in May and the lowest point since the inception of the survey in the late 1940s

    • The consumer survey also showed a noticeable drop in inflation expectations, with the 1-year inflation outlook down to 5.3% from 5.4%

  • US new home sales rose 10.7% between April and May

    • Year-on-year, new home sales are down -5.9%

    • Median house prices in May fell to US$449,000 from record highs of US$454,700

    • The US housing market is in the midst of a slowdown as mortgage rates soar to almost 6.0% 

  • Fed's Bullard said that US recession fears are overblown, highlights from his speech in Zurich include:

    • Called for the Fed to front-load rate hikes

    • Rate hikes will slow down the economy, but only slow down to more of a trend pace of growth as opposed to going below trend

    • US households are 'flush' with cash


  • Iron ore futures prices fell last Friday, import interest for August laycan cargoes remained firm, sources told Fastmarkets

  • Oil was ripe for a rebound after falling -16% in two weeks

  • Gold prices remain steady as it attempts to price in upcoming aggressive policy tightening from global central banks  


US Sectors

Sun 26 Jun 22, 10:37pm (AEST)

Sector Chg %
Communication Services +3.94%
Consumer Discretionary +3.74%
Consumer Staples +1.86%
Energy +1.54%
Financials +3.80%
Health Care +1.63%
Sector Chg %
Industrials +3.49%
Information Technology +3.57%
Materials +3.98%
Real Estate +2.06%
Utilities +1.76%

Industry ETFs

Sun 26 Jun 22, 10:37pm (AEST)

Description Last Chg %
Aluminum 51.51 -1.61%
Copper Miners 30.92 +4.01%
Gold 170.26 -0.10%
Lithium & Battery Tech 73.7 +2.85%
Nickel 31.93 -8.16%
Strategic Metals 82.75 +6.34%
Steel 49.49 +3.58%
Silver 19.37 +0.72%
Uranium 18.25 +7.01%
Aerospace & Defense 95.39 +3.19%
Global Jets 16.66 +4.56%
Biotechnology 118.01 +1.72%
Cannabis 17.67 +3.23%
Description Last Chg %
Bitcoin 12.95 +1.62%
CleanTech 14.03 +0.86%
Hydrogen 12.69 +1.65%
Solar 73.03 +1.01%
Cloud Computing 17.34 +4.61%
Cybersecurity 25.77 +3.61%
E-commerce 17.35 +4.09%
Electric Vehicles 22.2 +2.84%
FinTech 22.37 +4.69%
Robotics & AI 20.9 +3.30%
Semiconductor 357.08 +4.43%
Sports Betting/Gaming 14.71 +5.30%
Video Games/eSports 49.37 +3.34%

ASX Sectors to watch

Is this another bear market rally or is the sell-off finally close to an end? Who knows.

A lot of growthy stocks and ETFs are down at least 20-25% in the last two months. From a chart perspective, it looks like they've fallen off a cliff, with a tiny green candle that is last Friday. These stocks are bouncing from no-mans land and a lot more is needed to show investors that they're out of the rut.

#1 Tech

Here we go again - the most beaten up tech stocks led the Wall Street rally.

  • Draftkings +8.2%

  • Affirm +7.5%

  • Meta +7.2%

  • Nvidia +5.6%

  • Block +5.5%

Several ASX-listed tech stocks rallied last Friday, including Zip (+21.6%), WiseTech (+8.4%), REA (+8.2%) and NextDC (+5.1%).

The spike in SPI futures and surging US tech stocks could send more positive flows for local tech names.

#2 Uranium

The Uranium ETF headlined overnight gains, up 7%. Alongside the broad appreciation of risk-assets, notable headlines include:

  • Uranium spot prices up 2.7% to US$48.25/lb

  • UK ministers approve funding for $20bn nuclear power plant reactors

  • US government with US firm NuScale Power will fund US$14m to support a FEED study for Romania's deployment of a first-of-its-kind small modular reactor plant

    • "This investment is meant to mobilize a multi-billion-dollar effort and showcase U.S. ingenuity in the advanced nuclear sector," said a White House report on Sunday

URA 2022-06-27 08-20-44
Global X Uranium ETF (Source: TradingView)

Its interesting to see a name like Paladin Energy (ASX: PDN) rally 11.2% last Friday. Perhaps local uranium stocks can extend the winning streak to 2 on Monday.

#3 Lithium

The Rare Earth/Strategic Metals ETF was another notable gainer, up 6.3%.

Friday was a massive comeback day for local lithium stocks, supported by an EV maker buying Vulcan (ASX: VUL) shares at a massive premium and Pilbara Minerals' (ASX: PLS) record auction results from Thursday.

#4 Travel

Carnival's earnings helped bolster US cruise line and travel stocks, several of which were up at least 10%.

The US TSA said it screened 2.45m air passengers last Friday, the highest daily number since February 2020. Though, the figure is still below the 2.73m screened on the same day in 2019.

The US Jets ETF rallied 4.6% overnight but still down more than -25% since late April.

US Global Jets ETF chart
US Global Jets ETF (Source: TradingView)

That said, investors should expect some positive flow to follow through for local airlines and travel names.

Today's events

ASX corporate actions occurring today:

  • Ex-dividend: FPP, NZM

  • Dividends paid:  None 

  • Listing: None


Other things of interest (AEST): 

  • US Durable Goods Orders (May) at 10:30 pm

  • G-7 Summit at 10:30 pm


Written By

Kerry Sun

Finance Writer & Social Media

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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