Market Wraps

Morning Wrap: S&P 500 hits 2-month high, Fed signals slower rate hikes, ASX futures flat

Thu 24 Nov 22, 8:32am (AEST)

ASX Futures (SPI 200) imply the ASX 200 will open 6 points higher, up 0.08%.

Major US benchmarks rallied on dovish Fed minutes, oil prices tumbled after G7 nations consider a generous price cap on Russian crude, Credit Suisse flags a hefty quarterly loss as wealthy clients pull out and China is poised to cut interest rates.

Let's dive in.

Overnight Summary

Thu 24 Nov 22, 8:32am (AEST)

Name Value Chg %
Major Indices
S&P 500 4,027 +0.59%
Dow Jones 34,194 +0.28%
NASDAQ Comp 11,285 +0.99%
Russell 2000 1,864 +0.17%
Country Indices
Canada 20,282 +0.31%
China 3,097 +0.26%
Germany 14,428 +0.04%
Hong Kong 17,524 +0.57%
India 61,511 +0.15%
Japan 28,116 +0.61%
United Kingdom 7,465 +0.17%
Name Value Chg %
Commodities (USD)
Gold 1,737.60 -0.13%
Iron Ore 91.45 -
Copper 3.62 +0.14%
WTI Oil 79.99 -1.19%
AUD/USD 0.6734 +1.29%
Bitcoin (AUD) 24,554 +2.02%
Ethereum (AUD) 1,740 +3.56%
US 10 Yr T-bond 3.706 -1.38%
VIX 20 -3.85%

US Sectors

Thu 24 Nov 22, 8:32am (AEST)

Sector Chg %
Consumer Discretionary +1.33%
Communication Services +1.21%
Utilities +1.04%
Information Technology +0.87%
Materials +0.41%
Industrials +0.39%
Financials +0.37%
Health Care +0.34%
Consumer Staples +0.33%
Real Estate +0.15%
Energy -1.16%


US markets rallied on light volumes heading into Thanksgiving, with SPY volumes approximately 35% below its 20-day average. Fed minutes reaffirmed more interest rate hikes but at a more dovish pace, sending markets higher, the US dollar lower and bond yields lower.

  • Discretionary headline gains thanks to an almost 8% pop for Tesla shares. Citi upgraded the stock from Sell to Neutral, suggesting a more balanced risk-reward outlook after falling more than -40% since late September 

  • Tech also outperformed as the FOMC minutes took a slight dovish lean, sending bond yields lower. Several tech megacaps like Microsoft, Alphabet and Apple and beginning to stabilise after recent declines

  • Defensive and cyclical sectors finished green but underperformed benchmarks

  • Energy was the only red sector after oil prices dipped -4% as G7 nations laid out their plans for a cap on Russian crude 

  • 56% of US stocks advanced

  • 44% of US stocks trade below their 200-day moving average (45% on Wednesday, 47% a week ago)


Deere & Co (+4.9%) the agricultural equipment and machine manufacturer, often viewed as a bellwether stock, beat quarterly earnings and revenue expectations 

  • "Deere is looking forward to another strong year in 2023 based on positive farm fundamentals and fleet dynamics as well as an increased investment in infrastructure. These factors are expected to support healthy demand for our equipment." - CEO John C. May 

Citi (-2.2%) was warned by US banking regulators that it needs to address weaknesses with how it manages financial data.

  • “Issues regarding the Covered Company’s data governance program could adversely affect the firm’s ability to produce timely and accurate data and, in particular, could degrade the timeliness and accuracy of key metrics that are integral to execution of the firm’s resolution strategy.” - Federal Reserve and Federal Deposit Insurance Corp

Credit Suisse (-6.2%) shares are trading close to all-time lows after forecasting a pre-tax loss of up to US$1.6bn in the fourth quarter.

  • The investment bank said wealthy clients have withdrawn up to 10% of its assets since the beginning of October. 


  • US short-term inflation expectations retreat (Bloomberg)

  • EU considers $65-70 price cap on Russian oil (Bloomberg)

  • EU businesses signal a shallower-than-feared slump (Bloomberg)

  • Violent protests erupt at Apple's main iPhone plant in China (Bloomberg)


US durable goods orders rose 1% month-on-month in October from 0.3% in September. 

  • Beat analyst expectations of 0.4%

  • “Biggest upside surprise since Jan. This conflicts with ISM New Orders which were in contraction territory for October. Tug and pull of good and bad continues.” - Liz Young, Head of Investment Strategy at SoFi 

Highlights from FOMC minutes: 

  • “A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate."

  • "A slower pace in these circumstances would better allow the Committee to assess progress toward its goals of maximum employment and price stability."

  • “Most respondents to the Open Market Desk's surveys viewed a 50 basis point increase in the target range for the federal funds rate at the December meeting.”

  • “... participants remarked that there had been a reduction in discretionary expenditures, especially among lower- and middle-income households, whose purchases were shifting toward lower-cost options.”


Iron ore futures fell -0.25% to US$92.20 a tonne. 

Oil prices tumbled close to year-to-date lows as G7 nations seek to lock in a price cap on Russian oil.

  • G7 nations are looking at a price cap between US$65-70 a barrel compared to Russian production costs of around US$20 a barrel, according to Reuters

  • The price cap ensures that Russian producers still turn a profit and prevents a global supply shortage

  • US EIA data showed a 3.7 million barrel draw in crude inventories compared to analyst expectations of a 1.1 million barrel build

Gold prices rallied after FOMC minutes pointed towards a slower path for rate hikes.


  • Big question for 2023: "How quickly will the Fed pivot after reaching the terminal rate, and to what equilibrium rate will it revert? It will likely be 3.5% or higher, depending on how quickly or slowly inflation falls to the Fed’s 2% target. It may seem trivial, but the difference between an equilibrium rate of 3% and 4% amounts to several P/E points for the S&P 500 index." - Jurrien Timmer, Director of Global Macro at Fidelity

  • US GDP powers ahead: The GDPNow model from the Atlanta Fed rose to 4.3% for the fourth quarter from prior estimates of 4.2%.

  • China rate cuts: China's central bank is set to cut banks' reserve requirement ratio - the amount of cash that banks must hold as reserves - by another 25 bps to buoy economic activity.

Industry ETFs

Thu 24 Nov 22, 8:32am (AEST)

Description Last Chg %
Silver 19.43 +1.96%
Lithium & Battery Tech 67 +1.78%
Strategic Metals 91.78 +1.75%
Uranium 20.65 +1.50%
Copper Miners 34.35 +1.14%
Nickel 34.72 +0.98%
Gold 162.07 +0.62%
Steel 60.58 -0.13%
Aluminum 51.052 -1.36%
Global Jets 18.09 +1.60%
Aerospace & Defense 110.8 +0.19%
Biotechnology 134.05 -0.37%
Cannabis 14.59 -0.62%
Description Last Chg %
Bitcoin 9.79 +4.09%
Hydrogen 11.88 +3.11%
CleanTech 15.865 +1.42%
Solar 81.49 +1.06%
Cloud Computing 15.64 +3.32%
Video Games/eSports 43.06 +2.28%
E-commerce 15.96 +1.82%
Cybersecurity 22.84 +1.80%
Robotics & AI 20.97 +1.53%
FinTech 19.8 +1.36%
Semiconductor 377.44 +1.21%
Electric Vehicles 22.48 +1.07%
Sports Betting/Gaming 15.45 +0.65%

ASX Morning Brief

The S&P 500 is trying to close above the 200-day moving average for the first time since late August. Its rallying into the key downward trendline.

SPX chart
S&P 500 chart (Source: TradingView)

SPI futures suggests the ASX 200 opens 0.08% higher, an understandable open given the 1.30% rally in the last two sessions.

XJO chart
ASX 200 chart (Source: TradingView)

Sectors to watch

There was a cautious risk-on tone across our overnight ETF watchlist, likely due to subdued thanksgiving volumes.

Tech: Overnight, the Nasdaq led to the upside. Also note that the Global X Cloud, eCommerce and FinTech ETFs rose 3.13%, 1.75% and 1.36% respectively.

Gold: Spot prices rallied 0.6% overnight. Does a more dovish Fed take the weight off gold's shoulders? Higher spot prices could see some positive flow for local names, many of which have experienced a sharp pullback in recent days but well above October lows.

Energy: The generous US$65-70 oil price cap and an unexpected US oil inventory build smashed prices overnight. This could see some weakness across local energy names.

Key Events

Stocks going ex-dividend over the next week:

  • Thu: ALS (ALQ), Nufarm (NUF), Australian Vintage (AVG), TerraCom (TER)

  • Fri: None

  • Mon: None

  • Tue: 360 Capital Enhanced Income Fund (TCF), Infratil (IFT), Red Hill Iron (RHI), Graincorp (GNC), My Food Bag (MFB), Liberty Financial Group (LFG) 

  • Wed: Pengana International Equities (PIA), Aristocrat Leisure (ALL) 

ASX corporate actions occurring today:

  • Dividends paid: None

  •  Listing: None

Other things of interest (AEDT):

  • 12:00 pm: Korea interest rate decision

  • 8:00 pm: Germany Ifo business climate indicator

  • 10:00 pm: Turkey interest rate decision

  • 12:00 am: South Africa interest rate decision 

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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