Market Wrap

Morning Wrap: ASX to open flat, Wall St tumbles at close, oil plummets below US$100

Wed 13 Jul 22, 8:39am (AEST)

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ASX Futures (SPI 200) imply the ASX 200 will open flat at 6,506 points.

Wall Street sold off in the final hour of trade, a fake inflation report spooked investors, airlines upgraded second-quarter earnings expectations and oil cratered below US$100 a barrel.

Let’s dive in. 

Overnight summary

Tue 12 Jul 22, 10:39pm (AEST)

Name Value Chg %
Major Indices
S&P 500 3,819 -0.92%
Dow Jones 30,981 -0.62%
NASDAQ Comp 11,265 -0.95%
Russell 2000 1,728 -0.22%
Country Indices
Canada 18,679 -0.73%
China 3,281 -0.97%
Germany 12,905 +0.57%
Hong Kong 20,845 -1.32%
India 53,887 -0.94%
Japan 26,337 -1.77%
United Kingdom 7,210 +0.18%
Name Value Chg %
Commodities (USD)
Gold 1,724.00 -0.05%
Iron Ore 109.68 -
Copper 3.259 -0.90%
WTI Oil 95.65 -0.20%
AUD/USD 0.6758 +0.04%
Bitcoin (AUD) 28,682 -4.27%
Ethereum (AUD) 1,545 -6.79%
US 10 Yr T-bond 2.958 -1.10%
VIX 27 +4.28%


The US Bureau of Labour Statistics said “we are aware of a fake version of the June 2022 Consumer Price Index news release that is being circulated online.” The report said inflation was 10.2% year-on-year in June, potentially spooking markets.

Stocks might struggle to hold upside ahead of the pivotal US inflation report, which is forecast to mark a fresh 40-year high of 8.8% and cement expectations of another 75 bps rate hike from the Fed.

The US is heading into quarterly earnings season, where corporate profits are forecast to grow 5.7% year-on-year, according to Refinitiv. The figure will mark the slowest growth since the fourth quarter of 2020. Last earnings season, we witnessed stronger or weaker-than-expected earnings from big names like Amazon and Meta move the entire market. 

  • All 11 sectors were red

  • Energy, Tech and Health Care headlined losses

  • Materials, Staples and Industrials were relative outperformers

  • 50% of US stocks declined

  • 75% of US stocks trade below their 200-day moving average (74% on Tuesday, 75% a week ago)


  • Canoo (+53.2%) is an automotive startup you’ve probably never heard of. Shares of the emerging EV maker surged after Walmart agreed to purchase at least 4,500 of its upcoming electric delivery vans

  • American Airlines (+10%) updated its second-quarter guidance, expecting revenue to rise 12% against the same period in 2019

  • Boeing (+7.4%) reported that its deliveries have reached their highest monthly level since March 2019. A total 216 jets were delivered in the first half, with 51 from June alone

  • Twitter (+4.3%) is suing Elon Musk to keep the US$44bn buyout alive. The social media company said Musk’s plans to terminate the takeover is “invalid and wrongful”

  • Microsoft (-4.1%) shares slumped after Morgan Stanley lowered its price target to $354 from $372. The investment  bank said the stock is not immune to macroeconomic risks

  • Gap (-5%) shares fell on news that CEO Sonia Syngal is stepping down from her position


  • Australian consumer confidence fell 3.0 pts to 83.8 in July

    • Seventh consecutive month of decline 

    • A score greater than 100 implies consumers are generally confident about the economy and the outlook on their finances

    • "Without doubt consumers are still very sensitive to the inflation pressures on their budgets, but it appears their anxiety around interest rates is increasing,” said Westpac Chief Economist Bill Evans

  • Australian business confidence fell 5 points to 1 in June

    • Third consecutive month of decline

    • "Confidence in the retail sector took a significant hit, falling more than 20 points to be well into negative territory, reflecting concerns about the outlook for household spending," said NAB Chief Economist Alan Oster

  • Germany’s ZEW economic sentiment index was -53.8 in July

    • Well below economist expectations of -40.5 and down from -28 June

    • “The current major concerns about the energy supply in Germany, the ECB’s announced interest rate hike, and further pandemic-related restrictions in China have led to a considerable deterioration in the economic outlook,” said ZEW President Achim Wambach


  • Iron ore prices fell further as concerns over global growth outweighed signs of increasing credit in China

  • Oil prices tumbled as new covid waves across China, Europe and the US threaten to cap demand. The WHO advised governments to take further action to curb transmissions and Shanghai is at risk of a second lockdown

  • Gold is struggling as the US dollar extends gains, now trading at parity with the Euro


US Sectors

Tue 12 Jul 22, 10:39pm (AEST)

Sector Chg %
Communication Services -0.48%
Consumer Discretionary -0.73%
Consumer Staples -0.31%
Energy -2.03%
Financials -0.65%
Health Care -1.33%
Sector Chg %
Industrials -0.32%
Information Technology -1.34%
Materials -0.21%
Real Estate -0.59%
Utilities -0.51%

Industry ETFs

Tue 12 Jul 22, 10:39pm (AEST)

Description Last Chg %
Aluminum 49.4767 -0.61%
Copper Miners 28.12 -2.20%
Gold 161.43 -0.37%
Lithium & Battery Tech 70.97 -2.78%
Nickel 28.985 -1.88%
Strategic Metals 80.93 -3.55%
Steel 48.11 -0.08%
Silver 17.58 -0.80%
Uranium 18.64 -1.88%
Aerospace & Defense 98.5 +0.15%
Global Jets 16.44 +3.89%
Biotechnology 124.31 -0.65%
Cannabis 16.6 +1.75%
Description Last Chg %
Bitcoin 12.66 -5.61%
CleanTech 13.7898 -2.17%
Hydrogen 12.6 -1.83%
Solar 73.05 -3.34%
Cloud Computing 16.97 -3.24%
Cybersecurity 26.44 -3.90%
E-commerce 16.74 0.00%
Electric Vehicles 21.48 +0.05%
FinTech 21.88 -0.23%
Robotics & AI 20.66 -2.08%
Semiconductor 350.29 +0.28%
Sports Betting/Gaming 13.88 +0.50%
Video Games/eSports 47.5 -0.38%

ASX Sectors to watch

The market is struggling to keep it together ahead of key US inflation data.

The S&P/ASX 200 rallied 0.72% in early trade on Tuesday, only to close just 0.06% higher.

Today is an absolutely stacked day with Korea and New Zealand central banks expected to raise interest rates during market hours. As well as UK GDP, US inflation and Canada's interest rate decision after market hours. The next 48 hours will be wild.

#1 Energy

Oil prices fell -6.8% to US$99 a barrel as headwinds continue to stack: another covid outbreak in China, currency headwinds, recession risks and a collapse in German economic expectations.

UKOIL 2022-07-13 08-20-07
Brent crude oil (Source: TradingView)

"​Barring a major supply disruption, oil looks like it is going to trade sub-US$100 for a while until the crude demand outlook improves. ​ Right now, China looks like it might go back into lockdown mode, Europe is rushing its ways to slower crude demand as a recession looms, and the US economy is slowing down fairly quickly," said Oanda ​senior market analyst, Ed Moya.

"Oil ignored an OPEC report that shows demand quickly outgrowing supply. Eventually, when the short-term demand outlook stabilizes, energy traders will pay closer attention to the tight outlook for oil in 2023," added Moya.

#2 Copper

If you know where copper will bottom, please let me know.

Copper fell another -4.2% overnight to US$3.28/lb and down -28% since its early June high.

HG1! 2022-07-13 08-21-14
Copper futures (Source: TradingView)

#3 Lithium

The risk-off sentiment is hitting growth sectors the hardest, including battery metals.

Tuesday was a rough day for ASX-listed lithium names, further exacerbated by a short on Lake Resources (ASX: LKE).

The Rare Earth/Strategic Metals ETF continues to roll over, down another -3.6% overnight to a fresh 14-month low.

REMX 2022-07-13 08-23-18
VanEck Rare Earth/Strategic Metals ETF (Source: TradingView)

As I said on Tuesday, it's not a good look when the industry ETF starts rolling over and making fresh near-term lows. This comes at a time when most local lithium stocks are clinging onto recent selloff lows.

#4 Travel

The US Jets ETF topped our ETF watchlist, up 3.9%.

The upbeat earnings guidance from American Airlines helped bolster the performance of travel-related stocks.

Easing oil prices could also provide some relief for both airline margins and customers.

In late June, Qantas (ASX: QAN) said it was reducing domestic capacity to "help recover high fuel prices."

Today's events

ASX corporate actions occurring today:

  • Ex-dividend: None

  • Dividends paid: PCI

  • Listing: None


Other things of interest (AEST): 

  • Korea Interest Rate Decision at 11:00 am

  • New Zealand Interest Rate Decision at 12:00 pm

  • China Balance of Trade (June) at 1:00 pm

  • UK GDP (May) at 4:00 pm

  • US Inflation (June) at 10:30 pm

  • Canada Interest Rate Decision at 12:00 am


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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