Market Wraps

Morning Wrap: Inflation rattles the S&P 500, blue-chip Dow outperforms, ASX 200 futures flat

Mon 20 Feb 23, 8:33am (AEST)

ASX 200 futures are trading 1 point lower, down -0.01% as of 8:20 am AEDT.

The S&P 500 and Nasdaq both finished lower last Friday while the blue-chip Dow advanced, lithium giant Albemarle misses earnings expectations in parallel with a sharp pullback in spodumene prices, UK retail sales grew in January in an unexpected sign of consumer resilience and China injects a record US$121bn of cash into its financial system.

Let's dive in.

Overnight Summary

Mon 20 Feb 23, 8:33am (AEDT)

Name Value Chg %
Major Indices
S&P 500 4,079 -0.28%
Dow Jones 33,827 +0.39%
NASDAQ Comp 11,787 -0.58%
Russell 2000 1,946 +0.21%
Country Indices
Canada 20,515 -0.44%
China 3,224 -0.77%
Germany 15,482 -0.33%
Hong Kong 20,720 -1.28%
India 61,003 -0.52%
Japan 27,513 -0.66%
United Kingdom 8,004 -0.10%
Name Value Chg %
Commodities (USD)
Gold 1,840.40 -0.09%
Iron Ore 124.94 -
Copper 4.114 -1.24%
WTI Oil 76.34 -2.74%
AUD/USD 0.6871 -0.11%
Bitcoin (AUD) 35,746 -0.84%
Ethereum (AUD) 2,454 -0.58%
US 10 Yr T-bond 3.828 -0.39%
VIX 20 -0.74%

US Sectors

Mon 20 Feb 23, 8:33am (AEDT)

Sector Chg %
Consumer Staples +1.29%
Utilities +1.00%
Health Care +0.89%
Industrials +0.63%
Financials +0.05%
Consumer Discretionary +0.04%
Real Estate -0.45%
Communication Services -0.47%
Materials -0.96%
Information Technology -1.19%
Energy -3.65%


SPX 2023-02-20 07-26-29
S&P 500 catches a bid after a weak open. Finishes lower but at session highs (Source: TradingView) 


  • US markets remained heavy as the disinflation narrative starts to lose momentum following the largely in-line CPI and hotter-than-expected PPI prints last week

  • Bearish taking points include the repricing of the Fed rate path, Fed policymakers seeing the case for 50 bps hikes, underwhelming US earnings and rising treasury yields 

  • Retail investors pouring record amount into market while institutions remain bearish (FT)

  • Equity market strength amid substantial rate repricing may not last (Bloomberg)

  • Investors pull money from classic risk plays and back into bonds and cash (Reuters)


  • Apple begins firing contractors amid tech layoffs (NY Post)

  • Bank of America planning to cut investment banking jobs (Bloomberg)


DraftKings (+15.3%): December quarter losses were narrower than expected while revenue beat expectations, the betting app was the number one most downloaded sportsbook app in the US on Super Bowl Sunday, recently launched in Maryland, Kansas and Ohio.

Deere (+7.5%): Earnings and revenue beat, expects FY23 net income to be at least US$8.75bn (up from prior expectations of US$8.0bn), CFO said he expects inflationary pressures to abate and return to what we’ve seen in the past.

DoorDash (-7.6%): Revenue and guidance beat but loss of US$1.65 per share was more than double what was expected, the Board approved a buyback of up to US$750m.

  • "Our primary financial goal is to maximise long-term FCF per share … we believe repurchasing shares is an attractive way to reduce dilution & improve long-term FCF per share.” 

Albemarle (-9.7%): Earnings and revenue missed estimates, EPS surged 754% to US$8.62, FY guidance was reaffirmed including 30-40% growth in lithium volumes and expectations for flat pricing versus the December quarter. This announcement was in parallel with a -6.9% decline in spodumene prices last Friday, according to Fastmarkets.


  • US household debt hit a new high of US$16.9tn but delinquencies on the rise (CNBC)

  • UK retail sales unexpectedly rise in January (Bloomberg)

  • German producer prices slow but still higher than expected (Reuters)

  • China ramps up economic support with biggest ever cash injection (Bloomberg)

  • RBA Governor Lowe reiterates more rate hikes needed (Bloomberg)

  • RBNZ likely to hike rates by 50 bp this week, with 50 bps more by mid-year (Reuters)

Industry ETFs

Mon 20 Feb 23, 8:33am (AEDT)

Description Last Chg %
Silver 19.84 +0.86%
Gold 170.75 +0.30%
Copper Miners 39.36 -0.43%
Uranium 22.25 -0.67%
Aluminum 50.34 -0.72%
Steel 68.03 -1.28%
Nickel 35.4199 -2.60%
Strategic Metals 88.22 -3.11%
Lithium & Battery Tech 68.61 -3.96%
Aerospace & Defense 116.33 +0.42%
Global Jets 19.96 -0.30%
Biotechnology 132.09 +0.96%
Cannabis 11.61 -2.15%
Description Last Chg %
Bitcoin 15.36 +1.11%
Solar 76.23 -0.70%
Hydrogen 12.87 -0.82%
CleanTech 16.1 -1.18%
Sports Betting/Gaming 16.55 +1.39%
Electric Vehicles 24.27 -0.87%
Cybersecurity 23.05 -1.00%
FinTech 21.86 -1.24%
Robotics & AI 23.95 -1.54%
Semiconductor 422.5 -1.56%
Video Games/eSports 49.7 -1.95%
Cloud Computing 18.42 -2.06%
E-commerce 19.24 -2.39%

Deeper Dive

A Defensive Rotation

The Dow is one of few major benchmarks that has held up relatively well in recent weeks, consolidating around the high 33,000 level. Key weightings for the index include Financials (21.3%), Healthcare (20.5%), Industrials (15.2%), Tech (14.9%) and Consumer Discretionary (13.9%).

Is the blue-chip Dow set to outperform amid the recent rise in bond yields, risk-off sentiment and unwinding shorts on tech stocks?

DJI 2023-02-20 08-01-42
Dow Jones Industrial Average (Source: TradingView)

Oil is off to a terrible start

WTI prices fell -1.9% last Friday, down for a fifth straight session. Goldman notes that "with long-dated WTI oil prices dropping below US$60 a barrel, the market has begun to even question the under-investment thesis." Though, it reaffirmed its long-term view of US$80 a barrel. It'll just take longer to get there.

"Inventory levels are still low, spare production capacity is limited and global demand is improving across nearly all of the key commodity markets."

"We now have oil crossing US$100 a barrel in late 4Q23."

USOIL 2023-02-20 08-27-10
WTI crude oil (Source: TradingView)

Interesting stuff

Cheap energy stocks: The S&P 500 Energy Sector is trading at its cheapest level on history on a free cash flow yield basis, according to Otavio Costa. Interestingly, if the industry experiences a 30% decline in earnings, it'll still trades at a price-to-earnings of around 10.

Source: Bloomberg, Tavi Costa

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Zimplats (ZIM) – $1.314, Ryder Capital  (RYD) – $0.03, Ansell (ANN) – $0.291, Vicinity Centre (VCX) – $0.058, Wesfarmers (WES) – $0.88

  • Dividends paid: CVC (CVC) – $0.04 

  • Listing: SQX Resources (SQX) at 11:30 am AEDT

Economic calendar (AEDT):

No major economic announcements. 

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