Market Wrap

Morning Wrap: ASX set to tumble as recession fears trigger more panic selling on Wall St

Fri 17 Jun 22, 8:32am (AEST)

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ASX Futures (SPI 200) imply the ASX 200 will open 135 points lower, down -2.1%.

Another day, another sea of red. This is the 3rd worst start to a year in history for the S&P 500, down -23% in the first 115 trading days, as investors worry that more aggressive interest rate hikes and sticky inflation will drag the economy into a recession.

Let’s dive in.

Overnight summary

Thu 16 Jun 22, 10:32pm (AEST)

Name Value Chg %
Major Indices
S&P 500 3,667 -3.25%
Dow Jones 29,927 -2.42%
NASDAQ Comp 10,646 -4.08%
Russell 2000 1,650 -4.70%
Country Indices
Canada 19,004 -3.10%
China 3,285 -0.61%
Germany 13,038 -3.31%
Hong Kong 20,845 -2.17%
India 51,496 -1.99%
Japan 26,431 +0.40%
United Kingdom 7,045 -3.14%
Name Value Chg %
Commodities (USD)
Gold 1,857.00 +0.38%
Iron Ore 137.85 -
Copper 4.108 0.00%
WTI Oil 117.52 -0.06%
AUD/USD 0.7048 +0.03%
Bitcoin (AUD) 29,231 -8.82%
Ethereum (AUD) 1,554 -11.75%
US 10 Yr T-bond 3.307 -2.59%
VIX 33 +11.24%


A recession is in the rear-view mirror and objects in the mirror may be closer than they appear. Major US indices were obliterated overnight as a recession becomes an increasingly likely outcome.

More than 90% of stocks in the S&P 500 declined overnight, the 5th time in the past 7 days, according to Jason Goepfert from Sundial Capital Research. “Since 1928, there have been exactly zero precedents. This is the most overwhelming display of selling in history,” he said.

  • All 11 US sectors declined

  • Consumer staples was a relative safe haven, down -0.66% compared to the average -3.25%

  • Energy, consumer discretionary and tech sectors declined more than -4%

  • 82% of US stocks declined

  • 79% of US stocks trade below their 200-day moving average (76% on Thursday, 69% a week ago)


  • Adobe (-3.1%, after hours: -1.5%) reported second quarter results that beat expectations. The software company provided a soft current quarter guidance and cut its full-year revenue estimates  

  • KLA Corporation (-4.1%) is a semiconductor manufacturing company, which reaffirmed its June quarter guidance, hiked its dividend and announced a US$6bn stock buy-back program

  • Tesla (-8.5%) hiked the price of its electric vehicles by as much as US$6,000. According to Bloomberg:

    • The Model 3 long range price rose US$2,500 to US$57,990 

    • The Model Y long range rose to US$65,990 from US$62,990

    • Model S dual motor all-wheel long range rose to US$104,990 from US$99,990 

    • Model X dual motor all-wheel drive long range rose US$6,000 to US $120,990

  • Marriott Vacations (-11.2%) raised its full-year guidance, citing “very high owner occupancies at our resorts.” 


  • The Swiss National Bank unexpectedly raised interest rates by 50 bps to -0.25%

    • The negative sign is not a typo 

    • “The tighter monetary policy is aimed at preventing inflation from spreading more broadly to goods and services in Switzerland,” it said 

  • The Bank of England lifted rates by 25 bps to 1.25%, the highest in 13-years

    • Inflation is expected to reach over 9% over the next few months

  • US new home construction fell -14.4% in May to 1.55m

    • Economists polled by The Wall Street Journal expected 1.68m 

    • The US housing market is under significant stress amid the lack of supply of new homes and surging mortgages

    • In 2021, the 30-year mortgage rate was 2.65% and average new home was US$401,700

    • Today, the 30-year mortgage rate is 5.78%  and the average new home is $570,300, a roughly 100% increase in monthly mortgage repayments (assuming a 20% down payment)

  • US filings for unemployment benefits fell by 3,000 last week to 229,000

    • Figures remain close to a 5-month high

  • Federal Reserve Bank of Philadelphia said its gauge of regional business activity fell to -3.3 in June

    • First contraction in factory activity since May 2020


  • Iron ore prices futures are on a 7-day losing streak amid negative margins for Chinese steelmakers and self-initiated production cuts, sources told Fastmarkets

  • Oil remains steady after a small pullback below US$120

  • Gold reclaimed the US$1,850 level as investors rushed back to safe havens. It's surprising to see gold rally in the face of a strong US dollar 


US Sectors

Thu 16 Jun 22, 10:32pm (AEST)

Sector Chg %
Communication Services -3.45%
Consumer Discretionary -4.76%
Consumer Staples -0.66%
Energy -5.58%
Financials -2.57%
Health Care -1.52%
Sector Chg %
Industrials -3.38%
Information Technology -4.11%
Materials -3.65%
Real Estate -2.55%
Utilities -1.96%

Industry ETFs

Thu 16 Jun 22, 10:32pm (AEST)

Description Last Chg %
Aluminum 55.5402 -3.13%
Copper Miners 36.51 -4.14%
Gold 170.77 +1.12%
Lithium & Battery Tech 71.91 -3.09%
Nickel 34.3558 -2.20%
Strategic Metals 90.98 -3.43%
Steel 55.69 -4.54%
Silver 19.96 +1.40%
Uranium 19.9 -4.57%
Aerospace & Defense 96.94 -3.38%
Global Jets 17.05 -5.87%
Biotechnology 108.66 -2.61%
Cannabis 17.16 -4.43%
Description Last Chg %
Bitcoin 13.4 -3.58%
CleanTech 13.635 -4.29%
Hydrogen 12.19 -3.77%
Solar 70.19 -5.67%
Cloud Computing 16.44 -4.93%
Cybersecurity 24.73 -4.17%
E-commerce 17.29 -6.02%
Electric Vehicles 22.6 -4.96%
FinTech 21.86 -4.53%
Robotics & AI 21.29 -3.52%
Semiconductor 375.22 -6.03%
Sports Betting/Gaming 14.93 -5.43%
Video Games/eSports 49.46 -4.69%

ASX Sectors to watch

Well ... it was carnage everywhere.

With ASX futures pointing to a dire -2.1% fall, expect a sea of red.

#1 Travel

There was a lot of selling pressure for US travel stocks amid growing signs of a recession. The US Global Jets ETF closed -5.9% lower, back to August 2020 levels.

  • Carnival, Royal Caribbean and Norwegian Cruise Lines all plummeted around -11%

  • Airlines including American Airlines, United and Delta were all down at least -7.4%

#2 Uranium

The Uranium ETF fell -4.6% overnight, close to August 2021 levels.

From a technical perspective, $19 has been a key support area. Things might get a bit troublesome if $19 cannot hold.

Global X Uranium ETF
Global X Uranium ETF (Source: TradingView)

#3 Oil

The International Energy Agency (IEA) said it expects record global oil demand next year, alongside struggling supply amid constrained capacity and missing Russia supply.

"A recession may ridiculously be the only hope for balance in the market and lower prices. Although refining capacity won’t even hit pre-Covid levels next year which will continue to boost prices at the pump," said Oanda senior market analyst, Craig Erlam.

#4 Copper

Dr Copper isn't feeling so good, down -4.3% this week and testing the lower bound of its usual trading range.

Copper has an acute sensitive to the ebb and flow of global industrial activity, and often a leading indicator for recessions.

Copper prices
Copper futures, weekly chart (Source: TradingEconomics)


Today's events

ASX corporate actions occurring today:

  • Ex-dividend: SPY, VRT

  • Dividends paid: NUF, PGG, TNE, UMG, WAM

  • Listing: CVR


Other things of interest (AEST): 

  • Japan Interest Rate Decision at 1:00 pm

  • Europe Inflation Rate (May) at 7:00 pm

  • Fed Chair Powell Speech at 10:45 pm

  • US Industrial Production (May) at 11:15 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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