Market Wraps

Morning Wrap: Dow outperforms on SVB deal, oil prices surge, ASX 200 futures higher

Tue 28 Mar 23, 8:21am (AEST)

ASX 200 futures are trading 29 points higher, up 0.41% as of 8:20 am AEDT.

The Dow pulls ahead thanks to bank and energy stocks while the Nasdaq fumbles, bond market volatility continues with the US 2-year Treasury yield surging back above 4.0%, First Citizens agrees to acquire the failed Silicon Valley Bank, German business outlook unexpectedly improves to the highest in more than a year and Morgan Stanley's 10 questions for ASX big tech.

Let's dive in.

Overnight Summary

Tue 28 Mar 23, 8:21am (AEDT)

Name Value Chg %
Major Indices
S&P 500 3,978 +0.16%
Dow Jones 32,432 +0.60%
NASDAQ Comp 11,769 -0.47%
Russell 2000 1,754 +1.08%
Country Indices
Canada 19,625 +0.63%
China 3,251 -0.44%
Germany 15,128 +1.14%
Hong Kong 19,568 -1.75%
India 57,654 +0.22%
Japan 27,477 +0.33%
United Kingdom 7,472 +0.90%
Name Value Chg %
Commodities (USD)
Gold 1,957.70 -1.32%
Iron Ore 126.01 -
Copper 4.097 +0.54%
WTI Oil 72.89 +5.24%
AUD/USD 0.6650 0.00%
Bitcoin (AUD) 40,761 -2.50%
Ethereum (AUD) 2,577 -2.70%
US 10 Yr T-bond 3.528 +4.38%
VIX 21 -5.24%

US Sectors

Tue 28 Mar 23, 8:21am (AEDT)

Sector Chg %
Energy +2.10%
Financials +1.40%
Industrials +0.82%
Materials +0.74%
Consumer Staples +0.54%
Health Care +0.41%
Consumer Discretionary +0.18%
Utilities +0.13%
Real Estate -0.36%
Information Technology -0.85%
Communication Services -1.08%


SPX intraday
S&P 500 closes off session highs amid a late afternoon slide (Source: TradingView)


  • S&P 500 edged higher, supported by bank M&A (First Citizens acquires SVB)

  • US 2-year Treasury yield surges 24 bps and back above 4.0%

  • Commercial Mortgage-Backed Security spreads jump to the highest since May 2020

  • Commercial real estate viewed as the next shoe to drop, with JPMorgan estimating US$450bn of loans maturing this year

  • Money market funds surge more than US$286bn as investors pull bank deposits (FT)

  • US banking concerns shift from crisis to growth woes (Reuters)


  • 11 S&P 500 companies have reported first quarter earnings – All of which have surpassed consensus earnings expectations by more than 8.5%

  • Low bar for the upcoming US earnings season could be a positive dynamic but earnings risk remains the dominant and bearish theme  

  • First Citizens (+53.7%) soared after agreeing to buy US$72bn of SVB assets at a discount of US$16.5bn (Reuters)

  • Disney (+1.6%) announces first of three layoff rounds this week (CNBC)

  • Coinbase (-7.8%) rival Binance received a complaint from the US Commodity Futures and Trading Commission, citing an “ineffective compliance program (CNBC)


  • First Citizens Bank to acquire deposits and loans of Silicon Valley Bank (FT)


  • German business outlook unexpectedly rises to highest level in a year (Bloomberg)

  • UK outlook brighter as recession and cost of living fears ease (Bloomberg)

  • Profits at industrial firms in China fell 22.9% YoY in January to February (Reuters)

  • China’s economic rebound weaker than expected according to global shipping company Maersk (FT)

Industry ETFs

Tue 28 Mar 23, 8:21am (AEDT)

Description Last Chg %
Steel 60.38 +1.26%
Uranium 18.67 +1.12%
Aluminum 48.67 +0.72%
Copper Miners 36.5 +0.68%
Strategic Metals 75.21 +0.29%
Lithium & Battery Tech 60.41 +0.26%
Nickel 31.2279 +0.10%
Silver 21.22 0.00%
Gold 183.65 -0.93%
Global Jets 17.29 +1.33%
Aerospace & Defense 111.26 +0.93%
Cannabis 8.95 +1.45%
Biotechnology 125.87 +0.13%
Description Last Chg %
Bitcoin 17.16 -3.26%
CleanTech 14.9 0.00%
Solar 72.98 -0.08%
Hydrogen 10.38 -0.96%
Sports Betting/Gaming 15.34 +0.91%
Cybersecurity 22.33 +0.90%
FinTech 19.7 +0.56%
Robotics & AI 24.36 +0.49%
Cloud Computing 17.2 +0.23%
Electric Vehicles 22.59 +0.04%
E-commerce 17.08 -0.12%
Video Games/eSports 51.84 -0.50%
Semiconductor 429.45 -1.17%

Deeper Dive 

Today’s deeper dive is one of our classic research round-ups where we take a look at three top notes making waves in the markets. (Oh and Sectors to Watch ft Kerry)

Sectors to Watch

Another somewhat quiet session overnight. Bond markets remain extremely volatile, with the US 2-year Treasury yield continuing to whipsaw between recent lows of 3.6% and highs of 4.4%. This reflects the confusion over what the Fed will do in response to the banking crisis. If you look at probabilities for what the Fed will do in June, it's currently 6.6% to cut, 52.3% to hold and 41.2% to hike. It's very rare for the market to price all three options.

Anyway, onto some sectors to watch.

  • Energy: WTI crude surged 5.3% overnight to US$72.9 a barrel on Kurdistan output disruptions (about half a percent of global oil supply or 450,000 barrels per day) and banking optimism. Energy was the best performing S&P 500 sector, up 2.1%. This could see some positive flow for local names like Woodside, which tumbled 3.4% on Monday.

  • Gold: Gold prices continued to pull back from the key US$2,000 level, down around 1.1%. This could take some heat out of the recent resurgence of gold names.

  • Banks: Do the constructive headlines about banks (SVB deal) see some positive flow for local banks? The S&P 500 Financials sector was also the second best performing sector, up 1.3%.

Citi: Do you need to own a bank?

In a question that’s sure to fire up a few investors, Citi’s Australian equities team believe it’s time to ask whether owning a Big Four (+ one) Bank is worthwhile in this climate. The short answer is yes.

“The events of the GFC showed that the banks tend to underperform late cycle. As such, we

think it is too early to dismiss the sector at this juncture. We believe investors should favour the majors at this point, and continue to prefer ANZ (ASX: ANZ) and Westpac (ASX: WBC) over the other majors and regionals,” Brendan Sproules, Citi

Morgan Stanley: 10 questions for ASX big tech

Fresh from a trip to San Francisco (this writer is not at all jealous), Morgan Stanley’s team led by James Bales have some questions for the Australian listed tech companies. For each question, they’ve attached a major tech play under their coverage. To make it easy, we’ve attached the companies for you next to each question. 

  1. Are companies and/or their clients consolidating vendors - WiseTech (ASX: WTC)

  2. What can you do to drive retention - Nitro Software (ASX: NTO)

  3. How much can you cost-out - Xero (ASX: XRO)

  4. How has your propensity to reinvest changed - Life360 (ASX: 360), Pexa (ASX: PXA)

  5. How healthy are balance sheets - companies, customers, and suppliers- Dicker (ASX: DDR)

  6. Has the sales cycle changed - and how visible is the future - Redbubble (ASX: RBL)

  7. How has the current environment impacted unit economics - Altium (ASX: ALU)

  8. How can you leverage AI in your business - Data#3 (ASX: DTL)

  9. Are MAUs growing - Tuas (ASX: TUA)

  10. How are companies going to capitalise on supply chain normalisation - Baby Bunting (ASX: BBN)

Merrill Lynch: Will the Federal Reserve end QT?

There’s been some misinformation online that the Fed’s emergency funding to keep the banking system stable is the same as QE (it isn’t). But Merrill Lynch has considered the question anyway, and argues QT may end soon. Why? 

“The drawdown of the Treasury’s account at the Fed was offsetting QT, but that is ending sooner than anticipated, moving the timeline for the debt ceiling resolution forward. All this argues for an announcement to end or phase out QT at the next FOMC meeting.”

In other words, solving the first crisis will cause the second, older crisis to be dealt with much faster. Kapish?

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Cedar Woods (CWP) – $0.13, Atlas Arteria (ALX) – $0.13

  • Dividends paid: Grange Resources (GRR) – $0.02, BlueScope Steel (BSL) – $0.025, Blackmores (BKL) – $0.87, Dusk Group (DSK) – $0.08, Nick Scali (NCK) – $0.40, Wesfarmers (WES) – $0.88 

  • Listing: None

Economic calendar (AEDT):

  • 11:30 am: Australia Retail Sales

  • 3:15 pm: RBA Connolly Speech

Written By

Hans Lee

Content Editor

Hans is a Content Editor at Livewire Markets and Market Index. He created Signal or Noise and helps write the LW-MI Morning Wrap on Tuesdays and Thursdays.

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