Market Wraps

Morning Wrap: Dow rallies ahead of key inflation data, oil prices bounce, ASX to rise

Tue 13 Dec 22, 8:27am (AEST)

ASX Futures (SPI 200) imply the ASX 200 will open 44 points higher, up 0.61%.

Major US benchmarks cautiously rallied ahead of key inflation data, oil prices bounced after a 12% freefall last week, EV makers Rivian and Tesla tank on negative news and a few quick investment banker takes on the S&P 500 in 2023.

Let's dive in.

Overnight Summary

Tue 13 Dec 22, 8:27am (AEST)

Name Value Chg %
Major Indices
S&P 500 3,991 +1.43%
Dow Jones 34,005 +1.58%
NASDAQ Comp 11,144 +1.26%
Russell 2000 1,819 +1.22%
Country Indices
Canada 20,020 +0.36%
China 3,179 -0.87%
Germany 14,307 -0.45%
Hong Kong 19,464 -2.20%
India 62,131 -0.08%
Japan 27,842 -0.21%
United Kingdom 7,446 -0.41%
Name Value Chg %
Commodities (USD)
Gold 1,791.90 -1.04%
Iron Ore 110.48 -
Copper 3.809 -1.79%
WTI Oil 73.42 +3.38%
AUD/USD 0.6751 -0.66%
Bitcoin (AUD) 25,418 -0.46%
Ethereum (AUD) 1,879 -0.54%
US 10 Yr T-bond 3.611 +1.23%
VIX 25 +9.68%

US Sectors

Tue 13 Dec 22, 8:27am (AEST)

Sector Chg %
Energy +2.49%
Utilities +2.27%
Information Technology +2.17%
Industrials +1.71%
Financials +1.26%
Health Care +1.04%
Consumer Staples +1.03%
Real Estate +0.90%
Materials +0.90%
Communication Services +0.71%
Consumer Discretionary +0.39%


Major US benchmarks bounced ahead of the all-important inflation print at 12:30 am AEDT on Wednesday. Consensus expects headline inflation to fall from 7.7% in October to 7.3%. While core inflation is expected to ease from 6.3% in October to 6.1%.

  • All 11 sectors rallied led by a mix of defensive and growth

  • Energy headlined gains thanks to a bounce in oil prices. WTI is still down -8.6% since last Monday, up from lows of -12.6%

  • 60% of stocks advanced

  • 47% of stocks trade below their 200-day moving average (47% on Monday, 45% a week ago) 


Horizon Therapeutics (+15.5%) has agreed to be acquired by biotech heavyweight Amgen for US$26.4bn. Horizon focuses on treatments for rare, autoimmune diseases and its best-seller, Tepezza, is approved for thyroid eye disease in the US.

Boeing (+3.3%) shares rallied after reports that Air India is close to signing an order to buy up to 150 737 Max jets.

Rivian Automotive (-5.5%) said it will pause plans to manufacture EVs in Europe and drop the agreement it made with Mercedes-Benz. Management said they wanted to focus on pursuing the ‘best risk-adjusted returns’ on capital investments. 

  • “At this point in time, we believe focusing on our consumer business, as well as our existing commercial business, represent the most attractive near-term opportunities to maximise value for Rivian.” - CEO RJ Scaringe 

Tesla (-6.1%) shares tumbled after a YouGov survey showed that negative views of the EV maker have overtaken positive ones.

  • “.. In October, 24.8% of self-described Democrats had a positive view of the electric car manufacturer, but at the end of November, this number had dropped to 10.4%." - Teslarati

  • "We may be witnessing the sharpest pivot from under-supply to over-supply of light vehicles in a generation." - Morgan Stanley


  • China to scrap tracking app, continues to ease Covid restrictions (NBC News)

  • EU at odds over gas price cap as 12 countries criticize proposal (Reuters)

  • UK power demand surges to record on sub-zero chill (Bloomberg)


UK GDP rose 0.5% month-on-month in October from -0.6% in September.

  • Beat analyst expectations of a 0.4% increase


Iron ore futures fell -1.0% to US$108.40 a tonne. Some interesting near-term outlook observations from Mysteel include:

  • “.. domestic steel demand is likely to weaken gradually during the traditional off-season for steel consumption with the falling temperatures in northern China and the looming Chinese New Year holiday in late January, which will only lend limited support to steel prices.”

Oil prices bounced around 2% after WTI briefly hit US$70 a barrel on Monday.

  • “The outage on the Keystone pipeline between Canada and the US could be offering further support for the price, as could renewed Russian threats to cut supply in response to the G7 price cap and refusal to sell to any participating countries.” - Oanda senior market analyst, Craig Erlam 

Gold prices tumbled close to -1.0% ahead of key inflation data and central bank meetings. 

  • “It’s continuing to see resistance around $1,810 on rallies but there’s clearly still plenty of bullish appetite as is evidenced by the series of higher lows over the last few weeks.” - Erlam 


  • IB takes on 2023: Either a lot of bad news is priced in ... or they're right.

    • Morgan Stanley: Bear market isn't over and S&P 500 to hit 3,000 to 3,300

    • Bank of America: S&P 500 to 3,000

    • Deutsche Bank: S&P 500 to fall 25% in the third quarter

    • JPMorgan: S&P 500 to retest lows

  • Deep recession needed to tame inflation: "Central bankers won’t ride to the rescue when growth slows in this new regime, contrary to what investors have come to expect. They are deliberately causing recessions by over-tightening policy to try to rein in inflation." - BlackRock

Deep recession to tame inflation BlackRock
Source: BlackRock

Industry ETFs

Tue 13 Dec 22, 8:27am (AEST)

Description Last Chg %
Nickel 38 +3.16%
Uranium 19.6 +1.22%
Lithium & Battery Tech 66.7 -0.43%
Silver 21.56 -0.46%
Steel 61.83 -0.58%
Copper Miners 36.55 -0.60%
Gold 167.06 -0.84%
Strategic Metals 89.96 -0.87%
Aluminum 51.7049 -2.57%
Global Jets 18.11 +2.71%
Aerospace & Defense 110.22 +1.32%
Cannabis 13.59 +1.62%
Biotechnology 133.01 +0.79%
Description Last Chg %
Bitcoin 10.66 +0.56%
Hydrogen 11.92 +1.93%
Solar 78.62 +1.07%
CleanTech 15.635 +0.16%
Cloud Computing 16.21 +3.64%
Semiconductor 374.49 +1.77%
Robotics & AI 21.15 +1.61%
Cybersecurity 22.51 +1.51%
FinTech 19.75 +1.32%
Electric Vehicles 21.93 +0.73%
Video Games/eSports 45.23 +0.53%
Sports Betting/Gaming 15.54 +0.39%
E-commerce 16.94 +0.12%

ASX Morning Brief

One more sleep until we see the outcome of another high-stakes inflation print. The market's become increasingly volatile to the outcome of these inflation reports, with the last three being:

  • September 13: Hotter-than-expected and worst day for the S&P 500 in two years

  • October 13: Hotter-than-expected. S&P 500 futures crashed and dipped on open but staged one of the largest intraday reversals on record

  • November 10: Better-than-expected and the S&P 500 had its best day this year

Will tomorrow's CPI print be the light at the end of the tunnel or an oncoming freight train?

It's reasonable to expect markets to move in a cautious manner in the lead up to the all-important inflation print. We've also got central bank meetings including the Fed, Bank of England and Eurozone later this week.

The ASX 200 is set to open 0.61% higher but can the market hold a strong open? Or will CPI angst see some selling pressure?

Sectors to watch

  • Tech: The Nasdaq finished 1.1% higher. Also note an outsized 3.6% rally for the Global X Cloud ETF. Although the chart remains mostly rangebound, with the rally bringing it up to have another crack at breaking above its trading range.

Global X Cloud ETF chart
Global X Cloud ETF (Source: TradingView)
  • Gold: Gold is seeing a bit of pushback after a massive rally. Heavyweight names like Newcrest, Northern Star and Evolution Mining all fell around -3.0% on Monday. The inflation print and the Fed's new terminal rate projection will be key.

  • Lithium: The VanEck Rare Earth/Strategic Metals ETF is struggling to muster up a meaningful bounce, down -1.2% overnight. We've seen a lot of small-mid cap names like Lithium Power, Arizona Lithium, Ioneer and Global Lithium roll over in recent days. While large cap names like Allkem and Pilbara Minerals are hanging onto key inflection points (e.g. previous highs and key moving averages).

Rare Earths ETF
VanEck Rare Earths/Strategic Metals ETF (Source: TradingView)

Key Events

Stocks going ex-dividend over the next week:

  • Tue: None

  • Wed: None

  • Thu: Plato Income Maximiser (PL8) 

  • Fri: None

  • Mon: None

ASX corporate actions occurring today:

  • Dividends paid: Amcor (AMC), Macquarie Group (MQG) 

  •  Listing: Richmond Vanadium (RVT) 

Economic calendar:

  • 10:30 am: Australia consumer confidence

  • 10:30 am: Australia business confidence

  • 9:00 pm: Germany ZEW economic sentiment index

  • 12:30 am: US inflation rate

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.

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