Market Wraps

Morning Wrap: S&P 500 sinks, gloomy economic data stokes recession fears, ASX to fall

Mon 19 Dec 22, 8:39am (AEST)

ASX Futures (SPI 200) imply the ASX 200 will open 27 points lower, down -0.40%.

Major US benchmarks fell for a third straight session, US and Eurozone PMIs scream a recession, Goldman Sachs plans to cut 8% of its workforce and what happens in the year that follows a double-digit decline for the S&P 500?

Let's dive in.

Overnight Summary

Mon 19 Dec 22, 8:39am (AEST)

Name Value Chg %
Major Indices
S&P 500 3,852 -1.11%
Dow Jones 32,920 -0.85%
NASDAQ Comp 10,705 -0.97%
Russell 2000 1,763 -0.63%
Country Indices
Canada 19,443 -0.80%
China 3,168 -0.02%
Germany 13,893 -0.67%
Hong Kong 19,451 +0.42%
India 61,338 -0.75%
Japan 27,527 -1.87%
United Kingdom 7,332 -1.27%
Name Value Chg %
Commodities (USD)
Gold 1,803.00 +0.85%
Iron Ore 110.27 -
Copper 3.77 +0.19%
WTI Oil 74.50 -2.12%
AUD/USD 0.6706 +0.28%
Bitcoin (AUD) 25,017 -0.35%
Ethereum (AUD) 1,769 -0.10%
US 10 Yr T-bond 3.482 +0.93%
VIX 23 -0.92%

US Sectors

Mon 19 Dec 22, 8:39am (AEST)

Sector Chg %
Communication Services -0.11%
Materials -0.41%
Industrials -0.48%
Consumer Staples -0.53%
Financials -0.74%
Information Technology -1.27%
Energy -1.33%
Health Care -1.41%
Utilities -1.66%
Consumer Discretionary -1.74%
Real Estate -2.96%


Wall Street struggled to shrug off hawkish rhetoric from central banks last week, down for a third straight session on Friday. Flash Purchasing Managers Index data showed a strong downturn for both the US and Eurozone, further stoking recession fears. The conversation for markets has quickly turned from "the bottom's in" to now "are we going to revisit the bottom".

  • The S&P 500 is down around -6.1% from its Tuesday 13 December high (Fed rate hike and FOMC meeting day)

  • Every sector was red, with Defensives like Industrials and Staples outperforming on a relative basis

  • 61% of stocks declined

  • 53% of stocks trade below their 200-day moving average (51% last Friday, 49% a week ago)


Adobe (+3.0%) posted better-than-expected fourth-quarter earnings and FY23 guidance.

  • "Strong demand for our offerings, industry-leading innovation and track record of top-and-bottom-line growth set us up to capture the massive opportunities in 2023 and beyond." - CFO Daniel Durn

  • "The demand for digital content across every creative category, customer segment and media type is accelerating at a rapid pace ... fourth quarter was a record quarter for Creative Cloud. We achieved net new Creative Cloud ARR of US$453m and revenue of US$2.68bn, which grew 13% year-on-year"

Goldman Sachs (-1.0%) plans to cut up to 8% of its workforce or as many as 4,000 jobs. According to CNBC, the layoffs will commence in January and take place across all business divisions. 

Accenture (-5.9%) beat fourth quarter earnings expectations but issued a light guidance, with expectations that a strong US dollar will weigh on FY23 earnings. 


  • Quants have stepped up equity futures selling (Bloomberg)

  • Santa rally would require easing of financial conditions (Reuters)

  • ECB may have three more 50bp hikes in store (Econostream)

  • Eurozone flash composite falls at slower pace, hits four-month high (Reuters)

  • More firms upgrade China growth outlook for 2023, but near-term forecasts lowered (Bloomberg)


UK retail sales unexpectedly fell -0.4% month-on-month in November from 0.9% in October.  

  • Missed analyst expectations of a 0.3% increase

Eurozone manufacturing PMI improved to 47.8 in December from 47.1 in November.

  • Eurozone downturn remained in contraction for a sixth consecutive month, but the rate of decline mod

  • “While the further fall in business activity in December signals a strong possibility of recession, the survey also hints that any downturn will be milder than thought likely a few months ago." - S&P Global Business Economist Chris Williamson

US manufacturing PMI fell to 46.2 in December from 47.7 in November.

  • "The downturn gathered pace, as business activity fell at the joint-sharpest rate since May 2020. Manufacturers and service providers alike registered steeper decreases in output, as weaker demand conditions, inflation and hikes in interest rates dampened activity levels." - S&P Global Platts


Iron ore futures fell -1.80% to US$109.40 a tonne. 

Oil prices were heavy amid growing recession fears and uncertainty over China’s reopening given an ongoing spike in covid cases.

  • “The short-term crude demand outlook is a big question mark as China might struggle to ease covid curbs all the way and as global manufacturing activity widely remains in contraction territory.” - Oanda senior market analyst Ed Moya

Gold prices rallied despite a firmer US dollar and bond yields.

  • "It seems bullion traders won’t have the greenlight to buy gold until they are confident that the peak in yields is in place. Eventually, Wall Street will feel confident that the Fed is ready to hold and that might be when gold will be able to resume its role as a safe-haven." - Moya


  • Bounce back from double-digit decline: Since 1936, of nine prior years with double-digit losses, seven experience double-digit gains in the following year. The average rise gain was 18.0%.

US market performance after a double digit fall
Source: S&P Dow Jones Indices

Industry ETFs

Mon 19 Dec 22, 8:39am (AEST)

Description Last Chg %
Gold 165.35 +0.87%
Uranium 19.36 +0.67%
Silver 21.24 +0.61%
Copper Miners 35.61 +0.31%
Nickel 38.0407 -0.05%
Steel 59.59 -0.37%
Aluminum 49.72 -0.52%
Lithium & Battery Tech 64.25 -0.79%
Strategic Metals 84.54 -2.34%
Aerospace & Defense 109.51 +0.44%
Global Jets 17.6 -0.85%
Cannabis 12.77 +0.08%
Biotechnology 134.24 -0.92%
Description Last Chg %
Bitcoin 10.88 -3.49%
Hydrogen 12.14 -1.90%
CleanTech 16.02 -1.94%
Solar 80.24 -2.26%
Robotics & AI 20.93 +0.14%
Semiconductor 364.68 -0.76%
Cybersecurity 22.03 -0.82%
Cloud Computing 16.4 -0.85%
Video Games/eSports 43.9 -0.89%
E-commerce 16.57 -1.03%
Electric Vehicles 21.4 -1.12%
FinTech 19.3355 -1.68%
Sports Betting/Gaming 15.05 -1.86%

ASX Morning Brief

The weight of hawkish central bankers and depressing economic data is keeping the markets at bay.

The S&P 500 experienced a change of character after the Fed and ECB rate hikes. Volatility has picked up sharply and the market's sliced through key areas such as the 50-day, 20-day and 3,900 level.

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

The ASX 200 is set to open -0.40%. The last two sessions have seen a-typical volatility in the morning followed by a bit of a drift from noon onwards. It wouldn't be surprising to see this trend continue as we count down the days till Christmas.

Sectors to watch

Gold: Gold prices snapped a two-day losing streak.

Gold price
Source: TradingView

Hydrogen: The Global X Hydrogen ETF is trying to defend recent lows and consolidating around the $12 mark.

Hydrogen ETF
Source: TradingView

Key Events

ASX corporate actions occurring today:

  • Dividends paid: Civmec (CVL)

  •  Listing: Taiton Resources (T88) 

Economic calendar:

  • 8:00 pm: German IFO business climate index

  • 12:30 am: Canada producer price 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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