Market Wraps

Morning Wrap: S&P 500 higher, Nasdaq outperforms, US retail sales unexpectedly jump, ASX to rise

Thu 16 Feb 23, 8:30am (AEST)

ASX 200 futures are trading 36 points higher, up 0.49%.

Major US benchmarks bounced off session lows to close in positive territory, Warren Buffett's Berkshire Hathaway tops up on Apple and Paramount Global but offloads chipmaker TSMC, US retail sales unexpectedly jumps 3% month-on-month in January, Airbnb marks its first profitable year and stock yields are struggling to keep up with bond yields.

Let's dive in.

Overnight Summary

Thu 16 Feb 23, 8:30am (AEST)

Name Value Chg %
Major Indices
S&P 500 4,148 +0.28%
Dow Jones 34,128 +0.11%
NASDAQ Comp 12,071 +0.92%
Russell 2000 1,961 +1.07%
Country Indices
Canada 20,720 +0.08%
China 3,280 -0.39%
Germany 15,506 +0.82%
Hong Kong 20,812 -1.43%
India 61,275 +0.40%
Japan 27,502 -0.37%
United Kingdom 7,998 +0.55%
Name Value Chg %
Commodities (USD)
Gold 1,843.30 -1.18%
Iron Ore 124.20 -
Copper 4.01 -1.60%
WTI Oil 77.87 -1.51%
AUD/USD 0.6907 -1.15%
Bitcoin (AUD) 34,849 +7.92%
Ethereum (AUD) 2,410 +6.57%
US 10 Yr T-bond 3.809 +1.28%
VIX 18 -3.44%

US Sectors

Thu 16 Feb 23, 8:30am (AEST)

Sector Chg %
Communication Services +1.17%
Consumer Discretionary +1.16%
Utilities +0.64%
Industrials +0.63%
Materials +0.44%
Information Technology +0.38%
Real Estate +0.26%
Consumer Staples +0.19%
Financials +0.16%
Health Care -0.51%
Energy -1.78%


SPX 2023-02-16 08-25-06
S&P 500 managed to catch a bid after gaping down -0.4% at the open, closing around breakeven (Source: TradingView) 


  • US stocks were mostly higher amid positive economic data from the US, Europe and China

  • Treasuries yields continue to grind higher, with the US 2-year yield back at levels not seen since last November

  • Fed officials stick to higher-for-longer script (Reuters)

  • PBOC ramps up medium-term liquidity to meet surge in loan demand (Bloomberg)

  • RBA Governor Lowe reiterates need to tighten policy (Bloomberg)

  • Fund managers warn China reopening trade has become too crowded (FT)


  • Berkshire increased stake in Apple and Paramount Global (Bloomberg)

  • TSM shares hit by Buffett sale (Bloomberg)

  • Air India buying 220 jets from Boeing as part of a record single-airline order (Reuters)


Roblox (+26%): Beat both revenue and earnings expectations. CEO David Baszucki said “bookings accelerated meaningfully in December and January, with YoY growth exceeding 20% in both months. Growth was strong across all geographies and age groups with particular strength among users above 17 years old.” 

Airbnb (+14.6%): Another double beat with net income of US$1.9 billion – marking the company’s first profitable full year. Nights and experiences booked rose 20% and active listings were up 16% in 4Q22. 

  • "We are excited to see the continued strong demand in Q1 2023. We’re particularly encouraged by European guests booking their summer travel earlier this year, the market share gains we are seeing in Latin America, as well as the continued recovery within Asia Pacific.” - CEO Brian Chesky

Barclays (-7.8%): Net profits were ahead of market expectations but down 19% year-on-year to £5.0 billion. Return on tangible equity was 8.9% in the fourth quarter, down from 12.5% in the previous quarter. The British bank sold US$15.2 billion more in US investment products that it was permitted to, facing £1.6 billion in litigation and conduct charges over 2022.

Devon Energy (-10.3%): Missed fourth-quarter earnings and revenue expectations, current quarter production will be 10,000 barrels of oil and gas per day lower than expected. The company opted to increase capex to US$3.7 billion, up 5% above expectations (instead of returning capital to shareholders). 


  • US retail sales jump by most in nearly two years in broad gain (Bloomberg)

  • New York factory activity contracts less than expected in February (Reuters)

  • UK inflation softer than forecast in January (Bloomberg, Bloomberg)

  • IEA raises global oil demand outlook (IEA)

  • Goldman Sachs, BofA see an improving chance for a soft landing in the US (FT)

Industry ETFs

Thu 16 Feb 23, 8:30am (AEST)

Description Last Chg %
Steel 66.83 +0.85%
Lithium & Battery Tech 68.85 +0.36%
Uranium 22.7 -0.31%
Strategic Metals 90.15 -0.54%
Aluminum 50.2999 -0.99%
Gold 172.61 -1.00%
Copper Miners 39.5 -1.06%
Silver 20.12 -1.09%
Nickel 35.58 -3.34%
Global Jets 20.26 +0.39%
Aerospace & Defense 117.2 +0.34%
Cannabis 11.36 +3.26%
Biotechnology 133.77 0.00%
Description Last Chg %
Bitcoin 13.9 +8.56%
Solar 76.53 +3.27%
CleanTech 16.22 +2.10%
Hydrogen 13.01 +0.54%
FinTech 21.93 +2.37%
E-commerce 19.38 +2.32%
Video Games/eSports 49.24 +1.85%
Cybersecurity 23.34 +1.76%
Cloud Computing 18.5 +1.73%
Sports Betting/Gaming 16.42 +1.46%
Electric Vehicles 24.29 +1.24%
Semiconductor 431.36 +0.41%
Robotics & AI 24.25 +0.12%

Deeper Dive

Macro: Three more 25 bp blows to come

Our economic note of the day belongs to Prashant Newnaha at TD Securities. Most economists are expecting one additional rate hike to the one they’ve already forecast from the Reserve Bank. Others have added just one more rate hike to their profile believing the data will cause the RBA to blink. 

But Newnaha has done the economic equivalent of an accelerator pedal push.

“We now expect the RBA to lift the cash rate 25bps at its next three meetings with a final 25bps hike in August, taking the terminal cash rate to 4.35%. Our prior 3.85% terminal rate call assumed 25bps hikes in March and May.”

For more hot takes on the RBA’s challenges ahead, I attended the ABE forecasting conference, you can read my highlights here.

Broker notes

Temple and Webster (ASX: TPW) shares tanked after its trading update for the first five weeks of the second half showed that sales fell 7% year-on-year. It also came with some cautious outlook words from management:

“...was significantly impacted from strong ecommerce demand during the Omicron outbreak.”

Shares collapsed by 27% on results day. But is it warranted?

Not if you count the two broker upgrades from Canaccord Genuity (BUY from Hold) and Macquarie (NEUTRAL from Underperform). Here’s what the latter had to say:

“We see TPW’s strong balance sheet position offering potential for inorganic growth opportunities.”

Magellan (ASX: MFG) was double upgraded to BUY from Sell by UBS. Analysts argue that the outflows may be moderating sooner than the market thinks - and that’s a sign of emerging value.

“We think investors are getting paid to wait for performance and flows to turn around, with upside if the value of principal investments can be crystallised.”

Magellan is now UBS’ second favourite listed fund manager (behind GQG Partners). 

Sims Metals Group (ASX: SGM) reported first half earnings that blew the street’s estimates and its own guidance out of the water. But Citi downgraded the company to SELL from Neutral on valuation grounds. The broker is also concerned about higher interest rates and whether steel prices have run too hard. 

And if you thought Temple and Webster’s outlook statement raised some eyebrows, then this note from the Sims board should widen some eyes as well.

“We expect the geopolitical tensions to continue, creating trade policy uncertainty and impacting the energy markets. Competition for available scrap is likely to continue in the second half. The opening up of China will be positive for the global metal demand balance and resale prices and volumes, although the timing of this is uncertain.”

Interesting stuff

Yields vs. Stocks' earnings yields: The surge in bond yields is becoming increasingly less attractive relative to what cash offers. As of February 13th, the S&P 500 earnings yield was 4.53% but did you know that the US 3 month yield has climbed to 4.78%?

Source: Game of Trades

When stocks' yield premium disappears: From the above, you'd assume the attractive yield from cash/bonds makes the stock market less appealing. Let's take a look at a similar scenario between 1950 to the late 1970s. US interest rates were very low post World War II (~2%) and it stayed that way through to mid-late 60s. But the 70s to 80s witnessed an aggressive (but volatile) move in rates, which marked the beginning of a secular decline in stocks.

Source: Game of Trades

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Wotso Property (WOT) – $0.03, Insurance Australia (IAG) – $0.06, Scentre Group (SCG) – $0.083

  • Dividends paid: None

  • Listing: None

Economic calendar (AEDT):

  • 11:30 am: Australia Unemployment Rate

  • 12:30 pm: China House Price Index

  • 12:30 am: US Producer Price Index

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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