Market Wraps

Morning Wrap: Gold breaks through US$2,000, US job openings hits 21-month low, ASX 200 to fall

Wed 05 Apr 23, 8:27am (AEST)

ASX 200 futures are trading 13 points lower, down -0.18% as of 8:20 am AEDT.

Major US benchmarks experience a slight pullback after a powerful relief rally, US job openings tumble below 10 million for the first time in nearly two years, Apple and Walmart announce further job cuts, Morgan Stanley says the market is hard pressed to find a new bull market while regional bank stocks underperform and gold breaks through US$2,000 an ounce.

Let's dive in.

Overnight Summary

Wed 05 Apr 23, 8:27am (AEDT)

Name Value Chg %
Major Indices
S&P 500 4,101 -0.58%
Dow Jones 33,402 -0.59%
NASDAQ Comp 12,126 -0.52%
Russell 2000 1,770 -1.81%
Country Indices
Canada 20,276 -0.01%
China 3,313 +0.49%
Germany 15,603 +0.14%
Hong Kong 20,275 -0.66%
India 59,106 +0.19%
Japan 28,287 +0.35%
United Kingdom 7,635 -0.50%
Name Value Chg %
Commodities (USD)
Gold 2,039.00 +0.04%
Iron Ore 120.24 -
Copper 3.975 +0.10%
WTI Oil 80.88 +0.21%
AUD/USD 0.6752 -0.02%
Bitcoin (AUD) 41,843 +1.77%
Ethereum (AUD) 2,774 +4.07%
US 10 Yr T-bond 3.337 -2.71%
VIX 19 +2.43%

US Sectors

Wed 05 Apr 23, 8:27am (AEDT)

Sector Chg %
Utilities +0.52%
Communication Services +0.31%
Health Care +0.02%
Real Estate +0.02%
Consumer Discretionary -0.07%
Consumer Staples -0.24%
Information Technology -0.58%
Financials -1.01%
Materials -1.47%
Energy -1.72%
Industrials -2.25%


S&P 500 intraday
S&P 500 experiences a pullback after rallying to near two month highs (Source: TradingView) 


  • S&P 500 breaks a four-day winning streak where it rallied 3.9%

  • US Treasury yields ease and the US Dollar Index hits a fresh two-month low

  • Negative macro surprises including ISM manufacturing, JOLTs and industrial production has been a major theme in recent days and weighed on cyclical pockets of the market

  • JPMorgan's Kolanovic warns stocks are in 'calm before the storm' (Bloomberg)

  • Bond market volatility is the new reality for traders (Bloomberg)


  • Apple (-0.32%): New layoffs targeting corporate retail teams (Bloomberg)

  • Walmart (-1.0%): Cutting over 2,000 jobs at e-commerce centres (Bloomberg)

  • General Motors (-1.5%): Buyouts to cut 5,000 salaried jobs, says CFO (CNBC

  • Virgin Orbit (-23.2%): Filed for Chapter 11 bankruptcy protection with plans to sell its assets and lay off nearly all of its workforce (CNBC)


  • US labor market loosening as job openings approach two-year low (Reuters)

  • ECB says consumer inflation expectations declined significantly (Bloomberg)

  • RBA pauses rate hikes, softens views for further tightening (Bloomberg)

  • RBNZ seen downshifting pace of rate hikes on Wednesday (Bloomberg)

Industry ETFs

Wed 05 Apr 23, 8:27am (AEDT)

Description Last Chg %
Silver 22.06 +4.13%
Gold 184.54 +1.86%
Nickel 30.5035 +0.03%
Aluminum 49.5751 -0.84%
Copper Miners 39.32 -1.58%
Uranium 19.99 -2.20%
Lithium & Battery Tech 63.3 -2.31%
Strategic Metals 82.39 -2.95%
Steel 63.92 -4.10%
Global Jets 18.44 -0.65%
Aerospace & Defense 116.88 -1.11%
Biotechnology 129.77 -0.70%
Cannabis 9.07 -2.76%
Description Last Chg %
Bitcoin 16.76 +0.42%
Solar 76.36 -0.69%
CleanTech 15.79 -1.77%
Hydrogen 10.92 -2.56%
Cybersecurity 23.13 +0.30%
Sports Betting/Gaming 16.18 +0.06%
Video Games/eSports 53.28 -0.26%
Cloud Computing 18.09 -0.28%
FinTech 20.65 -0.58%
E-commerce 17.99 -0.61%
Robotics & AI 25.46 -1.53%
Electric Vehicles 23.67 -1.69%
Semiconductor 440.83 -1.86%

Deeper Dive

Recession trade gathers momentum: US job openings

Yesterday's US ISM manufacturing PMI came in at near three-year lows of 46.3 and well-below consensus expectations of 47.5.

Overnight, US job openings came in at 9.9 million, below consensus expectations of 10.4 million and down from 10.6 million a month ago.

There's kind of two ways to look at the jobs data:

  1. Job openings ticked down to 9.9 million (lowest since May 2021) and the ratio of vacancies to unemployed workers fell to 1.67 (lowest since late 2021)

  2. Job openings are still approximately 3 million above pre-Covid levels and there's still 1.67 jobs for every unemployed aka not recessionary

The negative data has propped up the likelihood of a Fed pause for its May 3 meeting to 59.9%. Although there's plenty of time and incoming data to sway the probabilities.

CME FedWatch Tool - CME Group
Source: CME Fedwatch Tool

Mood of the market: Testing the relief rally

The relief rally has helped trading conditions improve as volatility subsides. However, indexes are starting to pull back after a strong bounce from mid-March lows and overbought conditions. Here's some food for thought about where markets are at:

S&P 500 pushing into resistance: The S&P 500 has frequently struggled around this 4,150 level since this May last year. Is this an area where investors should be a bit more cautious or risk off?

SPX chart
S&P 500 chart (Source: TradingView)

Morgan Stanley's Mike Wilson: "We view the Tech sector's recent relative outperformance as a by-product of several factors: Repositioning out of traditional cyclicals post the banking sector events, a growing view that the sector is as defensive as traditional defensives ... and hope that the rate cuts the bond market is pricing come ... we advise waiting for a durable low in the broader market before adding to Tech more aggressively as the sector typically experiences a period of strong outperformance post trough - a time when its cyclicality works in its favour on the upside."

Wilson on a new bull market: "We would also point out that regional bank equities continue to underperform the broader market and remain around the local lows despite expanded government funding programs ... bank stocks are leading indicators, and we would be hard pressed to find a new bull market where they were underperforming."

Sectors to Watch

Gold and silver: The ISM data helped gold rally from session lows of -1.0% to 0.75% on Tuesday and overnight, the jobs data helped it break out above US$2,000 with conviction. The recession trade is gathering momentum as economic data continues to deteriorate. This could see some positive flow for local gold names like Newcrest Mining, Northern Star and Evolution Mining.

Cyclical sectors: The weakening economic data weighed on cyclical sectors. Industrials, Energy, Materials and Financials were the worst performing S&P 500 sectors overnight. Will this theme carry over to our session?

Lithium: On a side note, Chinese lithium carbonate prices hit 225,500 yuan a tonne on Monday, a fresh 52-week low and down for a 46th straight session. Prices are down more than 50% from all-time highs of 600,000 yuan.

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Qualitas Real Estate Income  Fund (QRI) – $0.001, Imdex (IMD) – $0.015, Clover Corp (CLV) – $0.007, Ridley Corp (RIC) – $0.04, ARB Corp (ARB) – $0.32 

  • Dividends paid: Countplus (CUP) – $0.015, Coronado Global (CRN) – $0.005, Southern Cross Electrical Engineering (SXE) – $0.01, Lifestyle Communities (LIC) – $0.055, Seek (SEK) – $0.24, Woodside Energy (WDS) – $2.15, Reece (REH) – $0.08, CSL (CSL) – $1.62

  • Listing: None

Economic calendar (AEST):

  • 9:00 am: Australia Industry Indicators by AI Group

  • 12:30 pm: RBA Gov Lowe Speech

  • 10:30 pm: US Balance of Trade

  • 12:00 am: US ISM Non-manufacturing PMI

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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