Market Wraps

Morning Wrap: S&P 500 fades on FOMC minutes, some Fed officials favour a 50 bp hike, ASX to fall

Thu 23 Feb 23, 8:38am (AEST)

ASX 200 futures are trading 20 points lower, down -0.28% as of 8:20 am AEDT.

S&P 500 fades from session highs of 0.5% to fall for a fourth consecutive day, most Fed officials favoured a 25 bp hike but some favoured 50 bps, Germany's manufacturing index rises to its highest level since May 2022, Fed funds future hit almost 5.4% from 5.0% at the beginning of the year and oil prices slump to near year-to-date lows.

Let's dive in.

Overnight Summary

Thu 23 Feb 23, 8:38am (AEST)

Name Value Chg %
Major Indices
S&P 500 3,991 -0.16%
Dow Jones 33,045 -0.26%
NASDAQ Comp 11,507 +0.13%
Russell 2000 1,895 +0.35%
Country Indices
Canada 20,193 -0.29%
China 3,291 -0.47%
Germany 15,400 +0.01%
Hong Kong 20,424 -0.51%
India 59,745 -1.53%
Japan 27,104 -1.34%
United Kingdom 7,931 -0.59%
Name Value Chg %
Commodities (USD)
Gold 1,833.00 -0.40%
Iron Ore 126.34 -
Copper 4.235 +2.93%
WTI Oil 76.36 +0.03%
AUD/USD 0.6804 -0.75%
Bitcoin (AUD) 35,016 -3.35%
Ethereum (AUD) 2,378 -3.70%
US 10 Yr T-bond 3.923 -0.81%
VIX 22 -2.27%

US Sectors

Thu 23 Feb 23, 8:38am (AEST)

Sector Chg %
Materials +0.68%
Consumer Discretionary +0.52%
Communication Services -0.05%
Information Technology -0.14%
Financials -0.20%
Industrials -0.26%
Consumer Staples -0.27%
Health Care -0.33%
Utilities -0.42%
Energy -0.77%
Real Estate -1.02%


S&P 500 opens higher but slumps on Fed minutes, down for a fourth consecutive session (Source: TradingView)


  • Fed minutes to show support level for larger hikes, higher peak (Bloomberg)

  • US stocks' early-year rally is melting away as Treasury yields surge (Reuters)

  • Global bonds poised to erase all of the gains they made in their best start to a year on record (Bloomberg)

  • Energy stocks underperforming the market amid sliding energy prices, rotation back into growth (Bloomberg)


  • Meta preparing for fresh round of job cuts (Washington Post)

  • Apple could eventually bring glucose monitoring to Apple Watch (Bloomberg)


Coinbase (-1.4%): Revenue and verified users beat, subscription and services revenue growth helped offset the quarter-on-quarter decline in trading volumes. 

Intel (-2.3%): Cut its dividend by 66% but reaffirmed its first quarter guidance. The stock has slumped to a near 5-year low.

Baidu (-2.6%): Revenue and earnings per share beat, announced US$5bn share buyback program and expects recovery trend to continue. Regulators have also told major Chinese tech companies not to offer ChatGPT services amid growing concerns about uncensored replies to user queries. 


  • German business confidence improves but recession fears linger (Reuters)

  • German inflation remained elevated in January (Reuters)

  • Australian wage growth below expectations and lower than inflation (Reuters)

  • Taiwan cuts 2023 GDP forecast to 2.12% amid weak exports (Bloomberg)

  • Japan government bond breaches yield cap, BOJ steps in with buying, loans (Bloomberg)

  • Investors increase bets on ECB lifting rates to all-time high (FT)

  • RBNZ hikes rates by 50 bp, sees further tightening (Bloomberg)

  • China expects sharp rebound in tourism this year (Reuters)

Industry ETFs

Thu 23 Feb 23, 8:38am (AEST)

Description Last Chg %
Gold 170.62 -0.56%
Lithium & Battery Tech 64.07 -0.61%
Steel 66.38 -0.68%
Uranium 21.23 -0.94%
Nickel 35.99 -0.97%
Aluminum 51.1601 -1.04%
Strategic Metals 85.32 -1.47%
Silver 20.07 -1.59%
Copper Miners 39.34 -2.34%
Aerospace & Defense 115.68 +0.26%
Global Jets 19.3 0.00%
Cannabis 10.82 0.00%
Biotechnology 129.64 -0.19%
Description Last Chg %
Bitcoin 15.27 -2.82%
Solar 74.09 +0.08%
CleanTech 15.46 -0.45%
Hydrogen 12.28 -0.98%
Cybersecurity 22.4 +1.70%
E-commerce 18.26 +0.82%
Cloud Computing 17.59 +0.63%
FinTech 21.12 -0.05%
Robotics & AI 22.93 -0.09%
Video Games/eSports 47.43 -0.15%
Electric Vehicles 23.24 -0.26%
Semiconductor 402.45 -0.48%
Sports Betting/Gaming 16.5 -0.61%

Deeper Dive

FOMC Minutes: Different meeting, Same story

Key highlights from the February FOMC minutes:

  • Many vs. a few: "Almost all participants agreed that it was appropriate to raise ... 25 bps at this meeting ... A few participants stated that they favored raising ... 50 bps at this meeting or that they could have supported raising the target by that amount"

  • Debt ceiling risks: "A number of participants stressed that a drawn-out period of negotiations to raise the Federal Debt limit could pose significant risks to the financial system & the broader economy."

  • Return to target by 2025: "With steep declines in consumer energy prices and a substantial moderation in food price inflation expected this year, total inflation was projected to step down markedly this year and then to track core inflation over the following two years. In 2025, both total and core PCE price inflation were expected to be near 2 percent."

Sectors to Watch

Major US benchmarks and the ASX 200 have given back around half the January run up. So we're kind of sitting in no man's land, more broadly speaking.

Of note, is how the S&P 500 and Nasdaq have undercut their 200-day moving averages. To falter after such a powerful showing of strength in January goes to show that the market remains in a very difficult place and the bottoming process is still playing out.

In terms of overnight moves:

Energy: Oil prices fell around -3.0% amid concerns that the Fed will overtighten monetary policy to bring inflation under control. Hawkish FOMC minutes also propped up the US dollar, which typically weighs on commodity prices.

From ETF list: Most of the overnight ETF list trickled lower overnight, including Copper (-2.4%), Rare Earths/Strategic Metals (-1.5%), Uranium (-0.9%), Steel (-0.7%), Lithium (-0.6%) and Gold (-0.6%).

Central Banks: Still higher for longer

Central Banks and Interesting Stuff was written by Hans Lee.

The Q4 Wage Price Index on Wednesday showed wages are still inching higher in Australia. Wages are up 3.3% year-on-year or less than half the rate of inflation. There is no sign of a wage-price spiral here unlike other jurisdictions such as the US and the Eurozone.

The wages numbers, along with the RBA's meeting minutes on Tuesday have continued to pressure the ASX implied yield curve. It currently expects rates to peak at 4.2% in August and stay above 4.0% through to May 2024.

In other central bank news, the Reserve Bank of New Zealand hiked their interest rates by another 50 basis points. And it's clear they will be hiking into a recession, not helped by Cyclone Gabrielle which has thrashed the country.

The one consolation? There are more fixed-rate mortgages that roll over every year in Aotearoa than there are in Australia. So they are far more used to the "roll off cliff" than we are.

Interesting stuff

Soft landing doesn't guarantee a soft landing: In my upcoming interview with Ron Temple from Lazard Asset Management, Ron said he thinks stocks could fall another 15% even if the US doesn't go into a recession. That's because sentiment and forward earnings estimates are still way too optimistic. Also, if unprofitable tech companies are leading an equity market rally at any one time, it may be a sign that it's just a dead cat bounce. 

China, property starts and bulk commodities: Can China's property construction return to prior levels this year? Will stimulus be enough to offset urbanisation levels and a declining population? As the world's largest steel consumer, the answer will be important for commodities like iron ore.

Source: Morgan Stanley

Still greedy: Even after a volatile past 1-2 weeks, CNN's Fear & Greed Index remains in 'Greed' territory. Does this suggest we have more downside to come as near-term sentiment and positioning remains stretched?

Source: CNN

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Whitehaven Coal (WHC) – $0.32, Codan (CDA) – $0.09, Enero Group (EGG) – $0.065, Iress (IRE) – $0.30, JB Hi-Fi (JBH) – $1.97, GWA Group (GWA) – $0.045

  • Dividends paid: Dexus Industria REIT (DXI) – $0.041, Dexus Convenience Retail REIT (DXC) – $0.053 

  • Listing: None

Economic calendar (AEDT):

  • 12:00 pm: Korea Interest Rate Decision

  • 4:15 pm: RBA Bullock and Cagliarini Speech

  • 12:30 am: US Q2 GDP

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.

Get the latest news and insights direct to your inbox

Subscribe free