Market Wraps

Morning Wrap: S&P 500 claws back losses, Credit Suisse chaos rattles global markets, ASX 200 to fall

Thu 16 Mar 23, 8:32am (AEST)

ASX 200 futures are trading 119 points lower, down -1.71% as of 8:20 am AEDT.

The S&P 500 falls but well above session lows of -2.1%, Credit Suisse shares nosedive after its largest shareholder said it would no longer provide financial support, oil prices tumble to levels not seen since December 2021, Bank of America mops up more than US$15bn in deposits after SVB collapse and US producer prices unexpectedly fall in February.

Let's dive in.

Overnight Summary

Thu 16 Mar 23, 8:32am (AEDT)

Name Value Chg %
Major Indices
S&P 500 3,892 -0.70%
Dow Jones 31,875 -0.87%
NASDAQ Comp 11,434 +0.05%
Russell 2000 1,746 -1.74%
Country Indices
Canada 19,379 -1.60%
China 3,263 +0.55%
Germany 14,735 -3.27%
Hong Kong 19,540 +1.52%
India 57,556 -0.59%
Japan 27,229 +0.03%
United Kingdom 7,344 -3.83%
Name Value Chg %
Commodities (USD)
Gold 1,923.30 +0.65%
Iron Ore 130.04 -
Copper 3.884 -2.97%
WTI Oil 68.23 -4.35%
AUD/USD 0.6615 -0.06%
Bitcoin (AUD) 36,927 +0.22%
Ethereum (AUD) 2,503 -2.00%
US 10 Yr T-bond 3.492 -4.01%
VIX 26 +10.16%

US Sectors

Thu 16 Mar 23, 8:32am (AEDT)

Sector Chg %
Communication Services +1.50%
Utilities +1.34%
Consumer Staples +0.68%
Information Technology +0.03%
Real Estate 0.00%
Health Care -0.17%
Consumer Discretionary -0.21%
Industrials -2.51%
Financials -2.84%
Materials -3.28%
Energy -5.42%


S&P 500 intraday
Still a red close but well off session lows of -2.1% (Source: TradingView)


  • Major US benchmarks were mixed but closed well off session lows

  • US 2-year Treasury yield initially rallied 15 bps to 4.4% but closed the session 35 bps lower to 3.91%

  • US 2-and-10 year spread now close to 40 bps after widening more than 100 bps

  • US dollar Index jumps 1.1% amid strong gains against the Euro

  • Oil prices settled down 4.5% after losing more than 4% on Wednesday and below US$70 a barrel for the first time since December 2021

  • Treasury liquidity dwindles as SVB crisis muddies Fed outlook (Bloomberg)

SVB – Yes it’s getting its own header

  • Fed considers tougher rules for midsized banks after SVB collapse (FT)

  • Large private equity firms weigh purchases from SVB's $74bn loan book (FT)

  • Democrats unveil bill to restore bank regulations undone by Trump (NBC)

  • SVB says Goldman Sachs was the buyer of portfolio it booked losses on (Reuters)


  • Bank of America gets more than $15bn in deposits (Bloomberg)

  • Credit Suisse shares slump after it fails to receive financial support from top shareholder Saudi National Bank (FT

  • First Republic Bank tumbles on credit downgrade (CNN)


  • US producer prices unexpectedly fall in February (Reuters)

  • US retail sales come in softer than expected (Reuters)

  • China activity data mixed but signs of turnaround in real estate (FT)

  • China makes another liquidity injection (Bloomberg)

  • IEA says China reopening will supercharge oil demand (Reuters)

  • South Korean unemployment rate unexpectedly falls (Bloomberg)

  • ECB likely to stick to big rate hike despite banking turmoil (Reuters)

Industry ETFs

Thu 16 Mar 23, 8:32am (AEDT)

Description Last Chg %
Gold 176.83 +0.78%
Silver 19.89 +0.55%
Nickel 30.7 +0.20%
Lithium & Battery Tech 60.35 -2.85%
Aluminum 48.8451 -3.09%
Uranium 19.47 -3.49%
Strategic Metals 77.78 -4.89%
Copper Miners 36.82 -6.00%
Steel 63.45 -6.52%
Aerospace & Defense 113.82 -2.71%
Global Jets 18.34 -4.31%
Biotechnology 126.95 -0.70%
Cannabis 9.55 -4.40%
Description Last Chg %
Bitcoin 15.47 -2.71%
Solar 75.62 -3.16%
CleanTech 15.6 -3.85%
Hydrogen 11.22 -4.63%
Cloud Computing 16.87 +0.30%
Cybersecurity 22.14 -0.50%
Video Games/eSports 48.53 -1.05%
FinTech 19.96 -1.10%
Semiconductor 416.86 -1.17%
E-commerce 17.19 -1.34%
Electric Vehicles 22.57 -2.26%
Robotics & AI 23.71 -2.32%
Sports Betting/Gaming 15.51 -2.64%

Deeper Dive

Today's Deeper Dive was written by Hans Lee and Kerry Sun.

Debit Suisse: Another Banking Disaster

First a bank for tech bros goes under. Now, a globally systematically important bank with a 166 year track record faces a massive spike in default risk. Here's the rundown on what on earth is happening:

  • Credit Suisse shares have been on a downward spiral since 2009 amid a long list of scandals and poor investments (From $77 in 2007 to a low of $1.75 last night)

  • The bank has been struggling to retain customers. In the December quarter alone, customers withdrew more than US$100 billion

  • Credit Suisse started offering a market leading deposit offering of 6.5% pa – this was an attempt to lure customers back but cost the bank heaps of money

  • Last night, Credit Suisse's largest shareholder – Saudi National Bank – said it won't provide further financial help for the bank

  • Credit Suisse reiterated that the bank had a strong balance sheet and plenty of liquidity but credit default swap markets are currently pricing the probability of default at 47%

  • Swiss regulators are stepping in, saying they would provide liquidity, if necessary

  • Credit Suisse shares closed 13.9% lower, up from a session low of -31%

  • Approximately 70% of Credit Suisse's balance sheet is outside the country, so its a rather global issue. It's assets are also twice as big SVB

The situation is still unfolding but global markets, especially financials and resources, are tanking around the world.

Inflation and the Fed

The good news is that US inflation came in as expected. The bad news is that inflation minus volatile components is now well and truly entrenched into the economy.

Having said this, markets are far more concerned about the contagion effects of SVB and Signature Bank on the broader financial system. Nomura are calling for a counter-consensus 25 basis points cut next week while some others are calling for a hold like Seema Shah of Principal Global Investors:

"Pausing in March may actually not set the Fed back in its inflation fight ... Investors should prepare for only a temporary pause in rate hikes, with a peak Fed funds rate of 5.25%-5.5% likely."

David Kelly from JPMorgan Asset Management sees things differently again. He believes next week will see a 25 basis points hike but that the next hike might actually be their last. Then, the question shifts to the start of rate cuts and the cycle begins all over again.

Sectors to Watch

As I noted in the Evening Wrap, the ASX 200 is in an awkward place where its oversold but also badly damaged. The Credit Suisse disaster has made Wednesday's bounce appear more like a dead cat one.

Energy: The global banking crisis has taken a massive toll on oil prices, with WTI crude down -11% in the last three sessions to US$68 a barrel. This could see some more weakness for local energy names like Woodside.

Copper: Likewise, Dr Copper is tumbled 4.0% overnight, close to a year-to-date low of US$3.84/lb. This adds further insult to injury for names like Sandfire Resources and 29Metals, that have taken a hit from adverse weather conditions.

Gold: Bond yields briefly rallied but finished sharply lower, triggering a whipsaw session for gold. Even though the US dollar climbed 1.1%, gold managed to finish the overnight session up 0.8% to US$1,918.

Lithium: The Global X Rare Earth and Strategic Metals ETF fell 4.9% overnight to levels not seen since April 2021. It's now down 42% from all-time highs. This is not the best look for lithium bulls.

Broker Watch: Cross Asset Views

In a world where markets are changing hour by hour, UBS has re-released its year-end forecasts for various asset classes. In anticipation of next week, UBS is sticking to the consensus 25 basis points hike with a view to further data softening in the next few months. And now you know that, here are their key cross-asset calls:

  • Global growth: +2.6% (but the US will still slip into recession in H2)

  • Federal Reserve terminal rate now at 4.25% to 4.5%, with cuts at the end of 2023 through mid-2024

  • S&P 500 2023 EPS to fall 10%, or finish the year at 3900 (the preference is for dividend payers)

  • It could take a 25% rise in copper and oil prices to offset the hit to EM FX and equities from a 50bp rise in UST yields

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Motorcycle Holdings (MTO) _- $0.08, CPT Global (CGO) – $0.06, IGO (IGO) – $0.14, Spark New Zealand (SPK) – $0.122, Embelton (EMB) – $0.10, Regis Healthcare (REG) – $0.02, Countplus (CUP) – $0.015, Fletcher Building (FBU) – $0.164, PWR Holdings (PWH) – $0.036, Macmahon Holdings (MAH) – $0.003, Data#3 (DTL) – $0.10 

  • Dividends paid: Australian Ethical (AEF) – $0.02, ResMed (RMD) – $0.044, Domino’s Pizza (DMP) – $0.674, Shaver Shop (SSG) – $0.047, APA Group (APA) – $0.26

  • Listing: None

Economic calendar (AEDT):

  • 10:50 am: Japan Balance of Trade

  • 11:30 am: Australia Unemployment Rate

  • 11:30 am: US Building Permits

  • 12:15 am: Eurozone Interest Rate Decision 

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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