Market Wraps

Morning Wrap: S&P 500 falls 2.6% in February, gold and copper prices bounce, ASX 200 set to fall

Wed 01 Mar 23, 7:38am (AEST)

ASX 200 futures are trading 21 points lower, down -0.29% as of 8:20 am AEDT.

The S&P 500 fell -2.6% in February from highs of 2.9%, Target tops earnings expectations but guidance remains weak, Canada's fourth quarter GDP was unexpectedly flat compared to expectations of 0.4% growth, French and Spanish inflation come in hotter-than-expected and a closer look at whether or not the recent rally was a new bull market or a classic bull trap.

Let's dive in.

Overnight Summary

Wed 01 Mar 23, 7:38am (AEST)

Name Value Chg %
Major Indices
S&P 500 3,970 -0.30%
Dow Jones 32,657 -0.71%
NASDAQ Comp 11,456 -0.10%
Russell 2000 1,897 +0.03%
Country Indices
Canada 20,221 -0.19%
China 3,280 +0.66%
Germany 15,365 -0.11%
Hong Kong 19,786 -0.79%
India 58,962 -0.55%
Japan 27,446 +0.08%
United Kingdom 7,876 -0.74%
Name Value Chg %
Commodities (USD)
Gold 1,817.00 +0.43%
Iron Ore 125.74 -
Copper 4.009 +1.44%
WTI Oil 75.68 -0.84%
AUD/USD 0.6728 -0.17%
Bitcoin (AUD) 34,521 -0.57%
Ethereum (AUD) 2,409 -0.26%
US 10 Yr T-bond 3.916 -0.15%
VIX 21 -2.00%

US Sectors

Wed 01 Mar 23, 7:38am (AEST)

Sector Chg %
Materials +0.45%
Communication Services +0.24%
Financials +0.17%
Real Estate -0.04%
Consumer Discretionary -0.05%
Information Technology -0.19%
Industrials -0.25%
Health Care -0.73%
Consumer Staples -0.75%
Energy -1.44%
Utilities -1.72%


SPX 2023-03-01 08-13-50
Choppy session with the S&P 500 rallying from a -0.1% open to session highs of 0.38% before closing towards session lows. (Source: TradingView)


  • Another quiet but choppy session where major US benchmarks faded early strength

  • Bearish narratives surrounding rate repricing, competition from short-term bills yielding more than 5% and disinflation risks gathering momentum

  • Short-term bond funds receive huge inflow as yields hit multi-decade highs (Bloomberg)

  • Bullish yen trades mount as traders bet on a BoJ policy turn (Bloomberg)

  • Rush to beat rate rises drive $283bn in corporate bond pricings since Jan (Bloomberg)

  • US hedge funds' selling of Chinese stocks picks up in February (Bloomberg)


  • Goldman Sachs reiterates profit targets, pledges to stop losses at consumer division (FT)

  • Apple suppliers are racing to exit China, AirPods maker says (Bloomberg)


Target (+2.2%): Revenue and earnings beat with comparable sales up an unexpected 0.7% compared to consensus expectations of a 1.7% decline. Current quarter and full-year guidance missed expectations.

  • "We're pleased that our business delivered comparable sales growth in the fourth quarter, in ... a very challenging environment.  Strength in Food & Beverage, Beauty & Household Essentials offset ongoing softness in discretionary categories." - CEO Brian Cornell

  • "For first quarter 2023, the Company expects comparable sales in a wide range, from a low-single digit decline to a low-single digit increase, and an operating income margin rate of 4 to 5 percent."

Zoom (+2.1%): Earnings and revenue beat, full-year revenue guidance was soft but earnings guidance was ahead of analyst estimates.

  • "... 27% growth in customers contributing more than $100,000 in trailing 12 months revenue, as well as the 115% trailing 12-month net dollar expansion rate for Enterprise customers." - CEO Eric Yuan


  • Canada's fourth quarter GDP unexpectedly stalled (Reuters)

  • French and Spanish inflation hotter-than-expected in February (Bloomberg)

  • Japan industrial production falls for first time in three months (Nikkei)

  • Australian retail sales rebound after unexpected fall in December (Reuters)

  • Collapsing shipping rates set to delay carriers (Reuters)

Industry ETFs

Wed 01 Mar 23, 7:38am (AEST)

Description Last Chg %
Silver 18.93 +1.51%
Steel 65.4 +0.99%
Copper Miners 37.53 +0.75%
Gold 169.01 +0.46%
Lithium & Battery Tech 63.62 +0.22%
Strategic Metals 85.19 -0.14%
Aluminum 49.3965 -0.31%
Uranium 21.09 -0.76%
Nickel 33.8599 -2.01%
Global Jets 19.52 +1.23%
Aerospace & Defense 115.5 -0.61%
Cannabis 10.5977 +1.53%
Biotechnology 126.87 +0.24%
Description Last Chg %
Bitcoin 14.48 -0.21%
CleanTech 15.36 +0.65%
Solar 74.22 +0.09%
Hydrogen 12.04 -0.25%
Cloud Computing 17.2 +0.81%
E-commerce 17.88 +0.62%
Semiconductor 408.43 +0.34%
FinTech 20.87 +0.34%
Electric Vehicles 23.32 +0.26%
Sports Betting/Gaming 16.23 +0.09%
Cybersecurity 22.55 0.00%
Robotics & AI 23.55 -0.04%
Video Games/eSports 46.72 -0.58%

Deeper Dive

A new bull market or a classic bull trap

Here's some food for thought about the recent rally and selloff.

S&P 500 above the 200-day: It's S&P 500 traded above its 200-day moving average for around 25 consecutive days between late January and early February. "Going back to 1950, there are no instances where the S&P 500 reached bear market territory (down 20%), rebounded above its 200-DMA for at least one month and went on to make new lows," said Scott Brown, Chief Investment Strategist at Beat the Bench.

Bearish Treasury yields: The US 2-year Treasury yield has hit 4.85%, a level not seen since June 2007. In the past 6 bear markets since 1973, the 2 year yield peaked and fell at least 50 bps before stocks made their ultimate lows for the cycle, according to Bank of America.

Earnings to fall but that's ok: The four strongest rallies for the S&P 500 from bear market lows (since 1950) had negative year-on-year EPS growth as multiples expanded. Although the negative EPS rallies all occurred when the Fed was cutting rates.

  • March 2020 +75%

  • March 2009 +69%

  • August 1982 +58%

  • May 1970 +44%

S&P 500 seasonality: On a separate note, March and April have historically been two of the strongest months for S&P 500 performance (besides November and December).

S&P 500 Index Seasonality
Source: SentimenTrader

Sectors to watch

It was another volatile overnight session where the market is struggling to find its footing. This makes sectors to watch rather difficult as you see stocks and/or sectors open in positive territory but eventually morph into a negative close. The market remains extremely selective and bipolar, which makes it rather difficult for position and momentum traders.

Some sectors of interest include:

Gold: Spot prices managed to hold US$1,800 last Friday, now on a two-day winning streak to US$1,827. Most gold names staged an almost vertical drop since February but bounced over the last 1-2 sessions.

Copper: Spot prices experienced an aggressive selloff last Tuesday to Friday, down -6.5% to US$3.95/lb. Copper has recouped roughly half those losses this week, up 3.2% to US$4.07/lb. That said, we've seen some rather depressing half-year results from names like 29 Metals, Sandfire Resources and Aeris Resources, which makes it rather difficult to treat them as copper proxies.

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Ventia Services (VNT) – $0.083, Link Administration (LNK) – $0.045, AMP (AMP) – $0.025, Gold Road Resources (GOR) – $0.005, Humm Group (HUM) – $0.01, The Lottery Corp (TLC) – $0.09, Ooh!Media (OML) – $0.03, Australian Ethical (AEF) – $0.02, Servcorp (SRV) – $0.10, AUB Group (AUB) – $0.017, Bell Financial (BFG) – $0.045, Orora (ORA) – $0.085, Telstra (TLS) – $0.085, Shaver Shop (SSG) – $0.047 

  • Dividends paid: Dicker Data (DDR) – $0.025, National Storage (NSR) – $0.055

  • Listing: None

Economic calendar (AEDT):

  • 11:30 am: Australia GDP Growth Rate

  • 12:30 pm: China NBS Manufacturing and Services PMI

  • 12:00 am: Germany Inflation Rate

  • 2:00 am: US ISM Manufacturing

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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