Market Wraps

Morning Wrap: ASX to rise, S&P 500 hits fresh record high + Inghams, IAG and QBE to report

Fri 16 Feb 24, 8:36am (AEST)

ASX 200 futures are trading 72 points higher, up 0.95% as of 8:30 am AEDT.

The S&P 500 closed at an all-time high despite disappointing December retail sales data, Russell 2000 hits a year-to-date high as small caps come back to life, OpenAI is developing a web search product to challenge Google, Berkshire sells some of its Apple stock, the UK and Japan enter a technical recession and Charts of the Week!

Let's dive in.

Overnight Summary

Fri 16 Feb 24, 8:21am (AEDT)

Name Value % Chg
Major Indices
S&P 500 5,030 +0.58%
Dow Jones 38,773 +0.91%
NASDAQ Comp 15,906 +0.30%
Russell 2000 2,059 +2.33%
Country Indices
Canada 21,223 +1.60%
China 2,866 +1.28%
Germany 17,047 +0.60%
Hong Kong 15,945 +0.41%
India 72,050 +0.32%
Japan 38,158 +1.21%
United Kingdom 7,598 +0.38%
Name Value % Chg
Commodities (USD)
Gold 2,016.2 +0.61%
Iron Ore 129.1 +0.06%
Copper 3.76 +1.59%
WTI Oil 78.17 +2.01%
Currency
AUD/USD 0.6522 +0.48%
Cryptocurrency
Bitcoin (AUD) 79,232 +0.05%
Ethereum (AUD) 4,333 +2.27%
Miscellaneous
US 10 Yr T-bond 4.24 -0.63%
VIX 14.23 -1.04%

US Sectors

Fri 16 Feb 24, 8:21am (AEDT)

SECTOR % CHG
Energy +2.48%
Real Estate +2.36%
Materials +1.88%
Financials +1.66%
Utilities +1.54%
Consumer Discretionary +0.88%
SECTOR % CHG
Health Care +0.70%
Industrials +0.69%
Consumer Staples +0.54%
Communication Services +0.08%
Information Technology -0.44%

S&P 500 SESSION CHART

SPX 2024-02-16 08-21-59
S&P 500 trends higher into a record close (Source: TradingView)

ASX TODAY

  • ASX 200 set to rally after a strong lead from Wall Street and lower bond yields/dollar

  • Companies to report today include ASX, Baby Bunting, Cleanaway Waste Management, GQG Partners, Insurance Australia Group, Integral Diagnostics, Inghams, IPH and QBE Insurance

  • QBE FY consensus – Adj cash profit of $1.4bn, Gross premiums written $22.0bn

  • Cleanaway H1 consensus – Adj EBITDA of $365m, Underlying NPAT of $85.2m

  • Wesfarmers could be ready to pursue a major acquisitions (The Australian)

  • CBA ordered by Federal Court to pay $10m fine over wage theft (AFR)

  • Data#3 downgraded to Neutral from Buy at UBS however target price increased to $8.40 from $8.20 

  • Whitehaven Coal upgraded to Neutral from Underweight at Barrenjoey but target price decreased to $7.15 from $7.30

  • Wesfarmers downgraded to Underperform from Outperform at CLSA but target price increased to $60.40 from $56.82

  • Goodman Group downgraded to Neutral from Buy at UBS but target price increased to $29.25 from $26.50

  • GUD Holdings upgraded to Buy from Neutral at Citi but target price decreased to $12.80 from $12.90 

  • AMP upgraded to Buy from Neutral at Citi and target price increased to $1.25 from $0.90 

MARKETS

  • S&P 500 finished higher, just off best levels

  • US markets experienced a relatively broad-based rally, the technology sector was the only laggard after a mix session for big tech

  • Russell 2000 continues to outperform, rallying to a year-to-date high and less than 1% off a 22-month high

  • Hedge funds add some big tech names in Q4, while cutting Nike and Pfizer, 13F filings show (Bloomberg)

  • Wall Street traders make long shot bets on China market recovery (Bloomberg)

STOCKS

  • OpenAI developing web search product to challenge Google (The Information)

  • Cisco to lay off 5% of workforce after sales forecast underwhelms (Bloomberg)

  • AI optimism boosts TSMC to become world's 12th largest company (Bloomberg)

  • Apple planning AI-related hardware upgrades for iPhone 16 (9to5Mac)

  • Berkshire pared stake in Apple, slashed holdings in HP and Paramount (FT)

  • Nvidia reveals stakes in Arm Holdings, SoundHound and biotech firm Recursion Pharmaceuticals (Bloomberg)

  • Ford CEO says they will carefully think about where to manufacture after UAW strikes (AP)

  • Lucid cuts price of its Air luxury EV in order to boost demand (Reuters)

CENTRAL BANKS

  • Fed's Barr stresses need for careful approach on rate cuts, wants to see more data on inflation (Bloomberg)

  • ECB's Lagarde cautions against rushing into rate cuts as rising salaries keep inflation hotter (Bloomberg)

  • RBA Governor Bullock notes encouraging progress on inflation (AFR)

GEOPOLITICS

  • US warned allies about Russian space, nuclear capabilities (Reuters)

  • Putin says Biden a better reliable alternative to Russia than Trump (Bloomberg)

  • Iran says gas pipeline explosion was an act of sabotage (ABC)

  • Israel launches largest assault in southern Lebanon since start of Gaza war following Hezbollah rocket barrage (Washington Post)

  • Israel pulls out of Gaza peace talks over unreasonable demands (Bloomberg)

  • Trump weighs scaling back commitments to NATO members who fail to hit defence spending goals (Bloomberg)

ECONOMY

  • US headline retail sales declined 0.8% in January, worse than consensus for a 0.1% month-on-month drop (Reuters)

  • UK economy ended 2023 in recession (Reuters)

  • Japan GDP contraction puts economy in technical recession (Reuters)

  • EU cut its growth outlook, economy starts 2024 on a weak footing (FT)

  • Australian unemployment rate hits two-year high of 4.1% (Bloomberg)

Industry ETFs

Fri 16 Feb 24, 8:20am (AEDT)

Name Value % Chg
Commodities
Gold Miners 26.7701 +2.92%
Silver 20.95 +2.50%
Steel 70.59 +2.25%
Strategic Metals 48.27 +1.81%
Lithium & Battery Tech 42.39 +1.51%
Copper Miners 35.275 +1.34%
Uranium 29.23 -0.07%
Industrials
Construction 65.9688 +1.18%
Global Jets 20.24 +1.05%
Aerospace & Defense 126.25 +0.74%
Agriculture 21.795 -0.43%
Healthcare
Biotechnology 136.52 +1.28%
Cannabis 5.11 -0.78%
Name Value % Chg
Cryptocurrency
Bitcoin 24.56 -
Renewables
Solar 47.43 +1.72%
Hydrogen 5.915 +0.42%
CleanTech 9.65 -0.10%
Technology
E-commerce 22.0 +2.56%
Electric Vehicles 23.96 +1.01%
Video Games/eSports 61.68 +0.88%
Robotics & AI 30.14 +0.84%
FinTech 25.63 +0.67%
Cybersecurity 31.46 +0.10%
Semiconductor 628.68 -0.10%
Sports Betting/Gaming 18.07 -0.11%
Cloud Computing 22.76 -0.91%

Charts of the Week

Setting the scene: Markets have seemingly shrugged off the hotter-than-expected US inflation data and does not seem to mind the repricing of rate cut expectations (4 by year-end, down from 6 a few weeks ago). There's a bit of a rotation at the moment from big tech to small caps (Russell 2000 outperformance of Nasdaq). Let's see if this trend carries over to our markets. We're in the thick of reporting season, so charts may rip or dip on results. This week's charts are a bit all over the place. As always, these are for educational purposes, always do your own research.

Charts we mentioned last week (last wee's wrap here)

Accent Group (ASX: AX1) turned into a textbook breakout, up around 11% between Mon-Wed. The breakout was boosted by strong results from peers like JB Hi-Fi. It experienced a 3% pullback on Thursday.

AX1 2024-02-16 07-59-13
Accent daily chart (Source: TradingView)

Botanix Pharmaceuticals (ASX: BOT) had a fairly uneventful week. Still chopping and eyeing a higher high.

BOT 2024-02-16 07-59-54
Botanix Pharmaceuticals daily chart (Source: TradingView)

Suncorp (ASX: SUN) is grinding higher, ever so slowly. Like I've mentioned in the past two weeks, insurance stocks like to chop around like no tomorrow. Insurers like IAG and QBE are due to report today, which will provide an important read-through for SUN.

SUN 2024-02-16 08-00-38
Suncorp daily chart (Source: TradingView)

Interesting charts from this week

Life360 (ASX: 360) rather choppy but working through a recent low.

360 2024-02-16 08-13-50
Life360 daily chart (Source: TradingView)

Inghams (ASX: ING) earnings are in a massive upgrade cycle. It has experienced several textbook breakouts in recent months. Currently settling after a big move out in early January. Also due to report today.

ING 2024-02-16 08-14-59
Inghams daily chart (Source: TradingView)

Wisetech (ASX: WTC) likely rallied on Thursday after Altium received a takeover. Pushing out from a choppy two months of consolidation.

WTC 2024-02-16 08-14-32
Wisetech daily chart (Source: TradingView)

Webjet (ASX: WEB) hit a six month high on Thursday. Chart appears a little overextended but constructive (not too volatile, breaking out after two months of sideways movement).

WEB 2024-02-16 08-14-23
Webjet daily chart (Source: TradingView)

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Synbio (SYM) – $0.35, Argo Investments (ARG) – $0.165

  • Dividends paid: Euroz Hartleys (EZL) – $0.01, Cromwell Property (CMW) – $0.007

  • Listing: The Australian Wealth Advisory Group at 11:00 am

Economic calendar (AEDT):

  • 6:00 pm: UK Retail Sales (Jan)

  • 12:30 am: US Building Permits (Jan)

  • 12:30 am: US Producer Price Index (Jan)

  • 2:00 am: US Consumer Sentiment (Feb)

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.

Get the latest news and insights direct to your inbox

Subscribe free