Market Wraps

Morning Wrap: S&P 500 edges up, gold slips below US$2,000, ASX 200 set to fall

Tue 18 Apr 23, 8:26am (AEST)

ASX 200 futures are trading 17 points lower, down -0.23% as of 8:20 am AEDT.

S&P 500 closes near best levels and at a fresh two month high, bond yields and the US dollar bounce, sending gold below US$2,000 an ounce, Apple launches a high-yield savings account that offers a 4.15% interest rate, New York Fed's Empire State Manufacturing survey unexpectedly jumps in April, tin prices surge as 10% of the world's supply is set to go offline and what to expect for Big Five Bank earnings later this week.

Let's dive in.

Overnight Summary

Tue 18 Apr 23, 8:26am (AEST)

Name Value Chg %
Major Indices
S&P 500 4,151 +0.33%
Dow Jones 33,987 +0.30%
NASDAQ Comp 12,158 +0.28%
Russell 2000 1,803 +1.22%
Country Indices
Canada 20,642 +0.30%
China 3,386 +1.42%
Germany 15,790 -0.11%
Hong Kong 20,782 +1.68%
India 59,911 -0.86%
Japan 28,515 +0.07%
United Kingdom 7,880 +0.10%
Name Value Chg %
Commodities (USD)
Gold 2,007.30 +0.02%
Iron Ore 120.01 -
Copper 4.074 +0.20%
WTI Oil 80.97 +0.17%
AUD/USD 0.6703 +0.01%
Bitcoin (AUD) 43,994 -2.96%
Ethereum (AUD) 3,102 -2.20%
US 10 Yr T-bond 3.591 +1.96%
VIX 17 -0.70%

US Sectors

Tue 18 Apr 23, 8:26am (AEST)

Sector Chg %
Real Estate +2.23%
Financials +1.13%
Industrials +0.79%
Consumer Discretionary +0.68%
Consumer Staples +0.59%
Materials +0.59%
Utilities +0.57%
Information Technology +0.39%
Health Care -0.10%
Communication Services -1.27%
Energy -1.27%


S&P 500 intraday
S&P 500 rallies in the last two hours of trade to close at session highs (Source: TradingView)


  • Major US benchmarks higher, ending near session highs

  • US 2-year Treasury yield is up 23 bps in the last three sessions to a 1-month high

  • US Dollar Index bounces 0.5%, sending gold below US$2,000

  • Fed hike probability in May for 25 bps sits at 86.4%, likelihood of another 25 bps in June rises to 23.6% from zero a month ago (CME)

  • Market still expecting a quick pivot, pricing in ~60 bps worth of rate cut by year end 

  • US investment case not as bad as feared with model showing economic downturn bottomed out months ago (Bloomberg)

  • BofA Flow Show report notes US$1.8bn outflows for the week ended 12 Feb for tech outflows, the biggest since December 2018 and third most on record 


  • Alphabet falls on Samsung phone switching to Microsoft Bing (CNBC

  • Apple launches savings account w Goldman featuring a 4.15% interest rate (CNBC)

  • EY will cut 3,000 jobs in the US to eliminate overcapacity (FT)

  • Roblox shares tumble after disappointing March update (CNBC)


Charles Schwab (+3.9%): Beat earnings expectations, revenue in-line and decided to pause its active buyback program.

  • Bank deposits fell 11% QoQ and 30% YoY

  • "While bank deposits shrank by 11% versus the prior year-end … we observed a decline in the average daily pace of bank sweep movements from January to March – even when allowing for a temporary spike in activity at the onset of the banking system turmoil.” – CFO Peter Crawford

  • “There are some early signs of moderation of the client cash allocation activity … we now expect Q2 revenue to be down mid-to-upper single-digit percent versus the second quarter of 2022.” – CFO Peter Crawford 

State Street (-9.2%): Missed earnings, revenue, net interest income and net interest margin expectations amid weak fee revenue, elevated credit expenses and higher-than-expected tax rates.


  • New York factory activity unexpectedly jumps to 10.8 points vs. -19.0 expected (Reuters)

  • China new home price sales climb at fastest pace in 21 months (FT)

  • Economists predict three more ECB hikes, then holding rest of year (Bloomberg)

  • BoE seen pausing on rate hike cycle with inflation to slow down further (Bloomberg)

Industry ETFs

Tue 18 Apr 23, 8:26am (AEST)

Description Last Chg %
Nickel 32.5383 +1.39%
Lithium & Battery Tech 62.76 +1.02%
Strategic Metals 82.32 +0.85%
Steel 63.56 +0.38%
Copper Miners 41.59 -0.26%
Gold 186.36 -0.45%
Aluminum 49.02 -0.67%
Uranium 19.86 -0.70%
Silver 23.31 -1.24%
Global Jets 17.93 +1.34%
Aerospace & Defense 114.94 +1.04%
Cannabis 8.29 +3.26%
Biotechnology 132.43 +0.86%
Description Last Chg %
Bitcoin 18.11 -3.09%
Solar 76.33 +2.66%
CleanTech 15.46 +1.81%
Hydrogen 10.07 +0.79%
E-commerce 17.41 +1.72%
Cloud Computing 17.52 +1.08%
Electric Vehicles 23.04 +0.78%
Sports Betting/Gaming 16.2 +0.74%
Cybersecurity 23.1 +0.43%
Robotics & AI 24.89 +0.36%
FinTech 21.01 +0.24%
Semiconductor 423.1 0.00%
Video Games/eSports 52.09 -0.33%

Deeper Dive

Kerry talks the usual Sectors to Watch and mixed market signals, Hans recaps Betashares' Australian ETF Review and recent views around the Big Five Banks.

Sectors to Watch

Markets are crawling higher amid a so-far better-than-expected US earnings season, positive economic data and a low VIX. Happy days ... for now?

  • Tin: Wa State, Myanmar announced the suspension of mining operations from 1 August 2023. The International Tin Association estimates that this represents approximately 10% of the world's tin concentrate supply. In 2022, almost two-thirds of China's imported tin concentrate came from Myanmar. Tin prices jumped 11% on Monday. It's a pretty niche space, the main ASX-listed name that comes to mind is Metals X (ASX: MLX)

  • Gold: Gold spot prices fell 0.5% overnight, below the symbolic US$2,000 level. The VanEck Gold Miners ETF fell -2.25%, which could flag some more weakness for local gold names.

  • Other: Real Estate and Financials were the best performing S&P 500 sectors, Invesco Agriculture Fund has rallied to a 10-month high in a V-shaped fashion, Nickel is back up to a 1-month high

Markets: Mixed economic and technical signals

Bloomberg's Intelligence model analyses key recession inputs such as capacity utilisation, jobless claims, manufacturing and sentiment.

  • "It indices that an economic downturn possibly started in June and bottomed in December. While the model still signals weakness in the economy, as long as it stays above its late-2022 lows, the outlook is favourable for the S&P 500 Index," said Bloomberg Intelligence.

Overnight, the Empire State Manufacturing survey came out unexpectedly strong up 35 points to 10.8 vs. expectations of -19.0. This marks the first increase in business activity in five months.

  • Prices paid index fell 9 points to 33.0, indicating a moderation in input price increases

  • Prices received index held steady at 23.7, suggesting the pace of selling price increases was little changed

  • It's worth acknowledging this is a regional survey that can be quite volatile

From a markets perspective, Fundstrat says that "the stock market is beginning to 'feel like a bull market' as the % of up days (of the past 20) reached 65% last week, the highest figure since November 2021."

At the same time, the rally has shown the weakest breadth since 2005, according to Morgan Stanley. The % of stocks outperforming the index sits at approximately 22%. The lack of participation may not be a healthy sign.

ETFs, ETFs and more ETFs

Growth in the Australian ETF market continued last month but there are signs of investor exhaustion potentially creeping in. Only two new products were launched last month on the Australian bourse and month-on-month growth was just 2%. The year-on-year increase was just over 5%, according to the Betashares Australian ETF Review released yesterday. Fixed Income funds continued to receive the most inflows.

  • Investor net flows up $700 million

  • ETF trading value soared to over $11 billion, the highest in a year

  • Total FUM increased to $142.6 billion

  • AUM has grown at a CAGR of 43% since the first ETF was listed locally in late 2001

Chart of Interest: Speaking of ETFs

2023 has so far been characterised as relatively good for equities and bonds, and there's plenty of proof of that in today's Chart of Interest. This chart looks at the five major bear/short ETFs in Australia and its performance so far year-to-date. We know there's a long way to go but it's not exactly looking like a bear's market, is it.

AUDS 2023-04-17 11-45-29
Major ASX-listed short ETFs (Source: TradingView)

Research Round Up

You may have come across our recent compilation of views around the Big Five bank earnings which kick off later this week and extend into next month. But just because it's Big Bank earnings season doesn't mean other stocks aren't impacted, especially because Australia's banking industry is so heavily geared to the housing market. That's where Morgan Stanley's Chris Nicol steps up with our research highlight of the day. Nicol and his team believe it's still too soon to get into housing-linked stocks.

"Price signals have been distorted by low volumes and there are structural reasons for transactions to stay low. The activity cycle is flying into an air pocket where the oxygen mask will be required. To suggest that adjacent retail categories can rebound when the consumer has only just got started adjusting their wallet appears hopeful rather than logical. We see poor risk-reward in chasing this rally in cash rate-sensitive sectors."

Nicol's views stand in stark contrast to WILSONS' Rob Crookston who argued now is a good time to invest in housing-related stocks in a recent article on Livewire.

"We like to have exposure to some contrarian stocks in the portfolio. The last time housing sentiment was this bad, stock-market returns were stellar over the following year ... While we cannot say the bottom is in, we do feel that we are closer to the end of this than the beginning."

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Kelly Partners Group (KPG) – $0.004, Katana Capital (KAT) – $0.005

  • Dividends paid: Hub24 (HUB) – $0.14, Carsales (CAR) – $0.285, COG Financial Services (COG) – $0.037, Sigma Healthcare (SIG) – $0.005 

  • Listing: None

Economic calendar (AEST):

  • 11:30 am: RBA Meeting Minutes

  • 12:00 pm: China Q1 GDP

  • 12:00 pm: China Retail Sales, Unemployment, Industrial Production

  • 4:00 pm: UK Unemployment

  • 7:00 pm: German ZEW Economic Sentiment Index

  • 10:30 pm: Canada Inflation Rate 

  • 10:30 pm: US Building Permits 

Written By

Hans Lee

Senior Editor

Hans is one of the Senior Editors at Livewire Markets and Market Index. He created Signal or Noise and leads the team's coverage of the global economy and fixed income markets.

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