Market Wraps

Morning Wrap: S&P 500 lower, Newcrest accepts Newmont's takeover, ASX 200 futures flat

Mon 15 May 23, 8:26am (AEDT)

ASX 200 futures are trading 7 points higher, up 0.09% as of 8:20 am AEDT.

S&P 500 modestly lower last week while the Nasdaq finished a bit higher, Apple's market cap is now bigger than the entire Russell 2000, Newcrest enters into a binding scheme implementation deed with Newmont, US consumer sentiment falls to a six month low while long-term inflation expectations hit a 12-year high and the ASX 200 remains in a tight range: Will it sink or swim?

Let's dive in.

Overnight Summary

Mon 15 May 23, 8:26am (AEDT)

Name Value Chg %
Major Indices
S&P 500 4,124 -0.16%
Dow Jones 33,301 -0.03%
NASDAQ Comp 12,285 -0.36%
Russell 2000 1,741 -0.22%
Country Indices
Canada 20,420 +0.01%
China 3,272 -1.12%
Germany 15,914 +0.50%
Hong Kong 19,627 -0.59%
India 62,028 +0.20%
Japan 29,388 +0.90%
United Kingdom 7,755 +0.31%
Name Value Chg %
Commodities (USD)
Gold 2,012.40 -0.37%
Iron Ore 105.16 -
Copper 3.727 -0.05%
WTI Oil 70.13 +0.13%
Currency
AUD/USD 0.6646 +0.01%
Cryptocurrency
Bitcoin (AUD) 40,520 +0.26%
Ethereum (AUD) 2,708 0.00%
Miscellaneous
US 10 Yr T-bond 3.463 +1.94%
VIX 17 +0.59%

US Sectors

Mon 15 May 23, 8:26am (AEDT)

Sector Chg %
Utilities +0.44%
Consumer Staples +0.36%
Communication Services +0.19%
Materials +0.17%
Real Estate +0.15%
Energy +0.12%
Industrials +0.01%
Health Care -0.18%
Information Technology -0.22%
Financials -0.41%
Consumer Discretionary -0.89%

S&P 500 SESSION CHART

SPX intraday
S&P 500 lower but recovers from session lows (Source: TradingView)

MARKETS

  • S&P 500 lower but off worst levels of -0.76%

  • US Dollar Index up 1.3% in the last two sessions, weighing on gold

  • Bullish focus points – BofA noting that 2023 S&P 500 EPS has started to bottom, NFIB survey did not reveal any signs of new credit strains from small businesses, Fed Senior Loan Officer Opinion Survey did not see any notable change amid recent stress among regional banks

  • Bearish focus points – Lack of market breadth, Wells Fargo notes 48% of S&P 500 stocks are negative year-to-date, banks stocks continue to tank, US initial jobless claims at highest level since October 2021 and core inflation still firmly above 5.0% 

  • Money market assets hit new all-time high (Bloomberg)

  • Cross asset correlations drop sharply as Fed's iron-grip over markets begin to fade, earnings in focus (Bloomberg)

  • Fund managers have the lowest exposure to stocks relative to bonds since 2009, supportive for stocks (WSJ)

STOCKS

  • Google AI event sends stock higher for second straight session (CNBC)

  • Tesla raises US prices for all vehicles except the Model 3 (Reuters)

  • Apple now bigger than the entire Russell 2000 (Bespoke Investment)

  • Newmont enters into binding agreement with Newcrest (Bloomberg)

  • General Motors recalling ~1m vehicles due to faulty air-bags (Reuters)

Earnings

  • Blended earnings growth rate for first quarter S&P 500 is currently -2.5% compared to expectations of -6.7% 

  • Of the 92% of S&P 500 companies that have reported, 78% have beaten EPS expectations, above the 73% one-year average and 77% five-year average

  • 75% have beat revenue expectations, above the 70% one-year average and 69% five-year average

  • Consumer in focus this week, with several high-profile retail stocks including Target on Thursday and Walmart on Friday

ECONOMY

  • US consumer sentiment drops to six-month low in May (Reuters

  • US consumer long-term inflation expectations hit 12-year high (Bloomberg)

  • UK GDP data shows unexpected contraction in economy last month (Bloomberg)

  • New Zealand inflation expectations fall sharply (Reuters)

  • Debt ceiling talks postponed to next week, mixed takeaways (Bloomberg)

  • China's housing rebound fizzling shows risks to economic recovery (Bloomberg)

  • National Oceanic and Atmospheric Administration says El Nino forming quickly could be a "significant" event (Axios)

Industry ETFs

Mon 15 May 23, 8:26am (AEDT)

Description Last Chg %
Commodities
Nickel 29.11 +1.53%
Copper Miners 37.02 +0.27%
Uranium 20.28 +0.20%
Steel 57.82 +0.09%
Gold 187.13 -0.17%
Strategic Metals 84.6 -0.37%
Silver 22.2 -0.81%
Lithium & Battery Tech 62.04 -1.19%
Aluminum 47.1049 -2.63%
Industrials
Aerospace & Defense 111.13 -0.22%
Global Jets 17.88 -0.89%
Healthcare
Biotechnology 130.43 -0.19%
Cannabis 8.19 -1.47%
Description Last Chg %
Cryptocurrency
Bitcoin 15.51 -1.42%
Renewables
Solar 69.81 +3.05%
CleanTech 14.17 +2.05%
Hydrogen 9.27 -1.40%
Technology
Semiconductor 411.02 -0.09%
Robotics & AI 25.48 -0.47%
Cloud Computing 16.89 -0.71%
Electric Vehicles 22.77 -0.88%
Cybersecurity 22.59 -0.89%
Sports Betting/Gaming 17.18 -1.22%
FinTech 20.5211 -1.27%
Video Games/eSports 52.41 -1.51%
E-commerce 17.53 -2.11%

Deeper Dive

Market Mood: Another Tight Range

The ASX 200 is down 0.27% in the last four sessions, which reflects some of the tightest price action we've seen since September 2021. In each of those sessions, the market managed to bounce from intraday lows.

An inflection point is brewing as the ASX 200 continues to form a tight range, will it break out or break down?

ASX 200 chart
ASX 200 chart (Source: TradingView)

There is no Sectors to Watch on Monday due to the relatively uneventful overnight session.

Charts of Interest

The Dow has never underperformed the S&P 500 by a wider margin on a year-to-date basis, according to Bespoke.

Fv7aLT6X0AACDHr
Source: Bespoke Investment Group

Apple's market cap has topped the Russell 2000. The last time this happened, it didn't last long, according to Bespoke.

FwGKSyVXwAMsgU2
Source: Bespoke Investment Group

"First quarter 2023 earnings season proved to be much better than feared ... Margins in every sector surprised to the upside ... We believe the worst of the 2023 negative earnings revision cycle is now behind us," said Goldman Sachs.

2023-05-15 08 08 36-Window
Source: FactSet, Goldman Sachs

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: WAM Capital (WAM) – $0.077, ANZ (ANZ) – $0.81, Macquarie Group (MQG) – $4.50 

  • Dividends paid: Charter Hall Long WALE REIT (CLW) – $0.07

  • Listing: None

Economic calendar (AEST):

  • 4:00 pm: Germany Wholesale Prices

  • 7:00 pm: Eurozone Industrial Production

  • 10:30 pm: NY Empire State Manufacturing Index 

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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