Market Wraps

Morning Wrap: Nasdaq enters bull market, inflation eases in Europe, ASX 200 to rise

Fri 31 Mar 23, 8:23am (AEST)

ASX 200 futures are trading 38 points higher, up 0.53% as of 8:20 am AEDT.

The Nasdaq enters a technical bull market after rallying 20% from lows, Spanish inflation unexpectedly falls to 3.3% in March, German inflation continues to ease but by less than expected and Charts of the Week.

Let's dive in.

Overnight Summary

Fri 31 Mar 23, 8:23am (AEST)

Name Value Chg %
Major Indices
S&P 500 4,051 +0.57%
Dow Jones 32,859 +0.43%
NASDAQ Comp 12,013 +0.73%
Russell 2000 1,768 -0.18%
Country Indices
Canada 19,941 +0.52%
China 3,261 +0.65%
Germany 15,522 +1.26%
Hong Kong 20,309 +0.58%
India 57,960 +0.60%
Japan 27,783 -0.36%
United Kingdom 7,620 +0.74%
Name Value Chg %
Commodities (USD)
Gold 1,998.00 +0.68%
Iron Ore 126.01 -
Copper 4.112 +0.61%
WTI Oil 74.37 +1.92%
Currency
AUD/USD 0.6709 -0.05%
Cryptocurrency
Bitcoin (AUD) 41,900 -0.84%
Ethereum (AUD) 2,673 -0.38%
Miscellaneous
US 10 Yr T-bond 3.551 -0.42%
VIX 19 -0.52%

US Sectors

Fri 31 Mar 23, 8:23am (AEST)

Sector Chg %
Real Estate +1.22%
Information Technology +1.14%
Consumer Discretionary +0.90%
Materials +0.64%
Health Care +0.55%
Utilities +0.41%
Energy +0.35%
Consumer Staples +0.34%
Communication Services +0.32%
Industrials +0.23%
Financials -0.29%

S&P 500 SESSION CHART

SPX intraday
S&P 500 mostly higher and continues to push the 4,000 level (Source: TradingView)

MARKETS

  • S&P 500 up seven of the last nine sessions

  • Bullish focus points include banking sector stabilisation, Fed balance sheet re-expansion, mega cap tech leadership, renewed disinflation momentum, continued signs of consumer resilience

  • Stocks and bonds moving more like the 70s, posing headache for investors seeking to spread risk (Bloomberg)

  • Nasdaq enters bull market for first time in almost three years as drop in yields spurs rush into tech stocks (Bloomberg)

STOCKS

  • Netflix (+1.9%) received a positive mention by Wells Fargo; noting that paid sharing efforts create significant upside to earnings estimates

  • Bed Bath & Beyond (-26.2%) plans to sell US$300m in stock, warns again of bankruptcy (Reuters)

BANKING CRISIS

  • FDIC weighs shifting burden onto the biggest banks (Bloomberg)

  • ECB's Schnabel says EU banks haven't seen deposit outflows (Bloomberg)

  • Banking collapses highlight new threats to lenders and upend conventional wisdom (FT)

ECONOMY

  • Spanish inflation falls to 3.3% in March from 6.0% in February (Reuters)

  • German inflation eases less than expected in March (Reuters)

  • Eurozone consumer confidence unexpectedly declines (Bloomberg)

  • US weekly jobless claims rise moderately, Q4 GDP trimmed (Reuters)

Industry ETFs

Fri 31 Mar 23, 8:23am (AEST)

Description Last Chg %
Commodities
Silver 21.44 +2.33%
Copper Miners 38.03 +2.05%
Uranium 19.58 +1.84%
Steel 62.47 +1.14%
Strategic Metals 81.18 +0.97%
Gold 182.53 +0.90%
Lithium & Battery Tech 62.91 +0.27%
Aluminum 49.1251 -0.32%
Nickel 31.4524 -1.92%
Industrials
Global Jets 18.06 +1.33%
Aerospace & Defense 114.07 +0.27%
Healthcare
Biotechnology 127.83 -0.47%
Cannabis 9.04 -0.55%
Description Last Chg %
Cryptocurrency
Bitcoin 17.49 -1.49%
Renewables
Hydrogen 10.37 +4.24%
CleanTech 15.2409 +2.49%
Solar 74.2 +2.09%
Technology
Sports Betting/Gaming 15.75 +1.87%
Semiconductor 434.77 +1.65%
E-commerce 17.465 +1.52%
Cloud Computing 17.5 +1.26%
Electric Vehicles 23.22 +0.99%
FinTech 20.16 +0.94%
Robotics & AI 24.83 +0.81%
Video Games/eSports 52.15 +0.73%
Cybersecurity 22.49 +0.62%

Deeper Dive

Nasdaq enters a bull market

Apparently the Nasdaq is now in a bull market after rallying more than 20% from its 13 October 2022 low.

It's technically a bull market but I can imagine that most readers will giggle and say "no you can't identify as a bull market in this climate".

Here are some interesting takes and stats from bankers:

  • "Yesterday's price action has seemingly changed the narrative ... It is beginning to feel as though the risk/reward of a tactical bounce higher is increasing. While positioning alone is not a reason to be bullish, it does remain light with room to chase." - JPMorgan

  • "As of yesterday, the combination of Apple, Nvidia, Microsoft, Meta, Tesla, Amazon, Alphabet, Salesforce and AMD have contributed to ~160% of the S&P 500's gains on the year (so S&P 500 would be negative without these stocks." - Susquehanna

  • "Apple, Nvidia and Microsoft have contributed to 91%." - Susquehanna

By that logic above, it's a Nasdaq bull market but not everyone is invited.

Charts of the Week

This segment of the morning wrap brings you weekly technical commentary on the ASX 200 and some of the more interesting charts in the market. These are not meant as recommendations. They are for illustrative purposes only. Any discussion of past performance is for educational purposes only. Past performance is not a reliable indicator of future return. Always do your own research.

ASX 200 – Bulls get going

XJO
Source: Commsec

The bulls have got going over the past week or so, after consolidating around the 6850-80 region – a region which has provided support on multiple occasions in the past. The test, if the bulls can keep going, will be the underside of the recent uptrend support line, which intersects around 7400 – an area that was also the swing high from mid-November. For now at least, things are looking more bullish than bearish but, as we know, it can all change very quickly.

REA Group (REA) – What property slump?

REA
Source: Commsec

Isn’t there supposed to be a once in a generation property slump happening in Australia right now? Well, there might indeed be but you wouldn’t know it looking at the REA Group chart, which has just hit 52-week highs. There is anecdotal evidence of the property market starting to pick up, price falls reaching their nadir, and talk of a pause on rate hikes likely also helps listing activity. REA has broken out of a long-term, sideways grind, on strong volumes. The break has only just occurred and the RSI is looking a little overcooked, so some caution is warranted, but it’s a very interesting move nonetheless.

Ramelius Resources (RMS) – Rumbling Ramelius

RMS
Source: Commsec

Last week I took a look at Newcrest, which has one of the cleanest uptrends in the market. This week, RMS gets a gig. It also has a very nice, fairly clean, well-supported uptrend – particularly over the past six months. Just recently broken above $1.20, volumes have been picking up through the most recent rally, and not overcooked on the RSI.

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Harvey Norman (HVN) – $).13

  • Dividends paid: Bendigo and Adelaide Bank (BEN) – $0.29, Data#3 (DTL) – $0.10, Perpetual (PPT) – $0.55, Suncorp (SUN) – $0.33, Baggie Beer (MBH) – $0.005, Beach Energy (BPT) – $0.02, Credit Corp (CCP) – $0.23, Capitol Health (CAJ) – $0.005, IDP Education (IEL) – $0.21

  • Listing: Patagonia Lithium 

Economic calendar (AEDT):

  • 11:30 am: Australia Housing Credit

  • 12:30 pm: China NBS Manufacturing PMI

  • 12:30 pm: China NBS Non Manufacturing PMI 

  • 8:00 pm: Eurozone Inflation Rate

  • 8:00 pm: Eurozone Unemployment Rate

  • 11:30 pm: US Personal Income

  • 11:30 pm: US Core PCE Index

Written By

Chris Conway

Managing Editor

Chris is the Managing Editor at Livewire Markets and Market Index. His passion is equity research, portfolio construction, and investment education. He is also very keen on the powerful processes that can help all investors identify great opportunities and outperform the market, and wants to bring them to life and share them with you.

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