Market Wraps

Morning Wrap: S&P 500 hits new low for 2022, Nasdaq rally fizzles, ASX set to rise

Tue 27 Sep 22, 8:36am (AEST)

ASX Futures (SPI 200) imply the ASX 200 will open 17 points higher, up 0.26%.

I think I'm beginning to forget what the colour green looks like. US markets faced another selloff led by REITs and energy stocks, the S&P 500 is at its lowest since December 2020 and the Nasdaq tried to rally but fizzled towards close.

Let’s get into it.

Overnight Summary

Tue 27 Sep 22, 8:36am (AEST)

Name Value Chg %
Major Indices
S&P 500 3,655 -1.03%
Dow Jones 29,261 -1.11%
NASDAQ Comp 10,803 -0.60%
Russell 2000 1,656 -1.41%
Country Indices
Canada 18,327 -0.83%
China 3,051 -1.20%
Germany 12,228 -0.46%
Hong Kong 17,855 -0.44%
India 57,145 -1.64%
Japan 26,432 -2.66%
United Kingdom 7,021 +0.03%
Name Value Chg %
Commodities (USD)
Gold 1,630.60 -0.17%
Iron Ore 99.01 -
Copper 3.296 +0.03%
WTI Oil 76.57 -0.18%
AUD/USD 0.6457 +0.04%
Bitcoin (AUD) 29,575 +1.33%
Ethereum (AUD) 2,044 +2.43%
US 10 Yr T-bond 3.878 +4.90%
VIX 32 +7.82%


  • The S&P 500 is now at its lowest since December 2020

  • The Nasdaq tried to rally, up 1.44% in early trade. The gains fizzled to a -0.6% close

  • 10 out of 11 US sectors declined

  • Staples acted as a relative safe haven, up 0.01% 

  • Growth heavy sectors including Discretionary and Tech also outperformed benchmarks

  • REITs, Energy and Utilities sectors fell more than -2%

  • 71% of US stocks declined

  • 74% of US stocks trade below their 200-day moving average (73% on Monday, 63% a week ago)


  • Las Vegas Stands (+11.8%) and other casino operators rallied after Macao announced plans to allow Chinese tour groups back into casinos as soon as November

  • Li Auto (+5.6%) shares in the Chinese EV maker rallied after Beijing extended its tax breaks on electric vehicles

  • Amazon (+1.2%) is hosting a Prime Day-like deal event called “Prime Early Access Sale”, which will take place on 11-12 October  

  • AMC Entertainment (-14.5%) shares in the meme-stock tumbled after the company said it is looking to sell up to 425m units (~US$1.4bn) of APE, its preferred shares, to pay down debt 


  • 2008 analogy: I'd take this with a grain of salt as you can adjust both timelines (2008 and 2022) to fit the narrative. Still, its pretty interesting to see us track a little too close for comfort

2008 analogy
Source: RIA Advisors
  • Inflation back to target: Once inflation reached 10% in developed economies (1980 - 2020), its taken an average 10 years to fall back to 2%, according to Bank of America. Although, it might not take that long this time given the pending global slowdown and/or recession

Inflation back to target
Source: Bank of America
  • US recessions and S&P 500 drawdowns: The S&P 500 is currently down -24.2% from its 4 January high

Max US drawdowns
Source: A Wealth of Common Sense
  • Breadth thrust gone wrong: "Today, fewer than 5% of S&P 500 stocks finished above their 50-day simple moving average for the second day in a row. Back to November 1985, this happened 85 other times ... All 85 events were higher 1-year later," according to Jonathan Harrier

US breadth
Source: Jonathan Harrier, MarketCharts


  • Nomura analysts expert the pound to hit 97.5 US cents by year-end (Reuters)

  • Bank of England won't hesitate to change rates as much as needed (Bloomberg)

  • Yuan plunge near 12-year low inviting aggressive PBOC pushback (Bloomberg)


  • Germany’s IFO business climate index fell to 84.3 in September from 88.6 in July

    • “You are looking forward to the next six months with great concern. Expectations were last this pessimistic in April 2020. Sentiment has deteriorated in almost all sectors. The order backlog continued to decline,” said IFO President Clemens Fuest

Highlights from key central bank speakers:

  • ECB President Lagarde speaks in front of European Union lawmakers:

    • Outlook is darkening. Inflation remains far too high. Activity to slow substantially in the coming quarters. Expect to hike further over the next several meetings

    • Some inflation expectations warrant close monitoring. Risks to inflation outlook are primarily to the upside. Wage dynamics remain contained so far. ECB will continue to be data-dependent 

  • Fed Boston President Collins:

    • Cooling inflation requires somewhat higher unemployment

    • Seeking ‘clear and compelling’ signs inflation is falling

    • Optimistic that the US economy can avoid a significant slowdown

  • Fed Atlanta President Bostic:

    • “If you look at history … there is a really good chance that if we have job losses, it will be smaller,” than in past slowdowns

    • “We are going to do everything we can to avoid deep, deep pain.”

  • Fed Cleveland President Mester:

    • While this has been a relatively fast pace of tightening, given the current level of inflation and the outlook, I believe that further increases in our policy rate will be needed.”


  • Iron ore futures fell -0.5% on Monday to US$98.45 a tonne

    • “China’s manufacturing steel demand rebounded in August and is expected to improve further in September and October on higher seasonal manufacturing activity,” according to S&P Global

  • Oil tumbled another -3.3%, down to levels not seen since 12 January

    • “With more and more central banks being forced to take extraordinary measures no matter the cost to the economy, demand is going to take a hit which could help rebalance the oil market,” said Oanda senior market analyst, Ed Moya

  • Gold is closing in on the US$1,600 level and back down to April 2020 levels

    • “Rising yields around the world continue to weigh heavily on the yellow metal, despite the risk-aversion we continue to see. Once we see yields stabilise, we may see more appetite for gold but in the meantime, it just isn’t there,” said Moya

  • Copper prices fell -1.5% to US$3.29/lb

  • Newcastle coal futures fell -0.1% to US$435 a tonne

  • Uranium futures fell -0.5% to US$48.75/lb

US Sectors

Tue 27 Sep 22, 8:36am (AEST)

Sector Chg %
Consumer Staples +0.01%
Consumer Discretionary -0.18%
Information Technology -0.67%
Health Care -1.01%
Industrials -1.13%
Communication Services -1.31%
Materials -1.64%
Financials -1.69%
Utilities -2.43%
Energy -2.57%
Real Estate -2.63%

Industry ETFs

Tue 27 Sep 22, 8:36am (AEST)

Description Last Chg %
Lithium & Battery Tech 69.13 -0.90%
Gold 153.01 -1.16%
Uranium 19.28 -1.35%
Strategic Metals 85.85 -1.63%
Aluminum 45.5701 -1.74%
Copper Miners 27.51 -2.22%
Steel 47.73 -2.41%
Silver 17.36 -2.53%
Nickel 30.88 -5.38%
Aerospace & Defense 94.1478 -1.53%
Global Jets 15.46 -2.52%
Biotechnology 115.1614 -1.51%
Cannabis 13.79 -1.52%
Description Last Chg %
Bitcoin 11.55 +2.25%
CleanTech 14.45 -1.25%
Hydrogen 11.47 -1.31%
Solar 75.7 -1.78%
Cybersecurity 23.83 -0.13%
E-commerce 15.45 -0.19%
Video Games/eSports 41.16 -0.44%
Robotics & AI 18.32 -0.60%
Sports Betting/Gaming 12.97 -0.62%
Cloud Computing 15.77 -0.82%
Electric Vehicles 21.1 -1.23%
Semiconductor 331.9582 -1.50%
FinTech 20.76 -1.54%

ASX Morning Brief

Things are getting uglier by the day. The market is in a very oversold state via indicators such as the McClellan Oscillator, relative strength index etc. That doesn't mean a bounce is imminent but it does mean we're quite stretched to the downside.

Looking back at the S&P 500 for a moment, could we see some form of double bottom at these levels? Sentiment and momentum is getting so bearish that its starting to become contrarian bullish.

S&P 500 chart
S&P 500 chart (Source: TradingView, Annotations by Market Index)

ASX sectors to watch

SPI futures are pointing towards a +0.26% open. At this point, where we open doesn't really matter because who knows where we might finish.

More broadly speaking, we're seeing a lot of things begin to revisit June lows. And again, could we see some positive price action around these levels to form a double bottom?

Most of the ETFs we track fell between 1-2%. Much like the Nasdaq, a lot of them tried to bounce but closed towards session lows. This included Rare Earths/Strategic Metals, Solar, FinTech, Uranium and Hydrogen.

Commodities: The Bloomberg Commodity Index has nosedived to an 8-month low. It's not a good look for resources, more broadly speaking.

Bloomberg Commodity Index
Bloomberg Commodity Index chart (Source: TradingView, Annotations by Market Index)

Travel: The US Global Jets ETF is now on a 5-day losing streak. The selling pressure is showing no signs of abating. It's trading about 16% lower than November 2020 levels, before a covid vaccine was even developed.

JETS 2022-09-27 08-17-48
US Global Jets ETF chart (Source: TradingView, Annotations by Market Index)

Steel: The VanEck Steel ETF is close to 20 month lows. Even though iron ore prices are holding up relatively well, its downstream users are clearly struggling. Much like the S&P 500, can we see some form of double bottom here?

SLX 2022-09-27 08-18-23
VanEck Steel ETF chart (Source: TradingView)

Key Events

Stocks going ex-dividend:

  • Tue: PIC, SXE

  • Wed: CIW, CWP, MYR

  • Thu: EP1, GVF, NCK, SST

  • Fri: IPC, LCE, VAS

  • Mon: None

ASX corporate actions occurring today:

  • Dividends paid: AGL, ALU, CEN, DSK, DVR, EGN, MAD, NZM, WOW

  • Listing: CMG


Other things of interest (AEST):

  • Fed Evans Speech at 8:15 pm

  • ECB President Lagarde Speech at 9:30 pm

  • US August Durable Goods Orders at 10:30 pm

  • Fed Bullard Speech at 11:55 pm

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