Market Wraps

Morning Wrap: S&P 500 slumps on hot producer prices and hawkish Fedspeak, ASX set to fall

Fri 17 Feb 23, 8:29am (AEST)

ASX 200 futures are trading 18 points lower, down -0.25% as of 8:20 am AEDT.

US producer prices came in hotter-than-expected thanks to higher fuel prices, the Fed's Loretta Mester reiterates the need to bring rates above 5%, China new home prices increase for the first time in over a year, the US 6-month Treasury yield starts with a 5 handle for the first time since 2007 and three interesting charts for the week.

Let's dive in.

Overnight Summary

Fri 17 Feb 23, 8:29am (AEST)

Name Value Chg %
Major Indices
S&P 500 4,090 -1.38%
Dow Jones 33,697 -1.26%
NASDAQ Comp 11,856 -1.78%
Russell 2000 1,942 -0.97%
Country Indices
Canada 20,606 -0.55%
China 3,249 -0.96%
Germany 15,534 +0.18%
Hong Kong 20,988 +0.84%
India 61,320 +0.07%
Japan 27,696 +0.71%
United Kingdom 8,013 +0.18%
Name Value Chg %
Commodities (USD)
Gold 1,846.10 +0.04%
Iron Ore 124.34 -
Copper 4.064 +1.33%
WTI Oil 78.52 -0.09%
AUD/USD 0.6877 -0.38%
Bitcoin (AUD) 35,662 +1.16%
Ethereum (AUD) 2,446 +0.35%
US 10 Yr T-bond 3.843 +0.89%
VIX 20 +10.59%

US Sectors

Fri 17 Feb 23, 8:29am (AEST)

Sector Chg %
Consumer Staples -0.80%
Utilities -0.83%
Real Estate -0.93%
Health Care -1.02%
Energy -1.03%
Financials -1.07%
Industrials -1.09%
Materials -1.15%
Communication Services -1.55%
Information Technology -1.75%
Consumer Discretionary -2.16%


SPX 2023-02-17 08-06-45
S&P 500 gaps down, rallies back up to breakeven before nose diving at the close (Source: TradingView) 


  • US stocks sold off at the close thanks to a hot producer price report and unexpected decline in initial jobless claims, further fueling Fed tightening expectations

  • Fed's Loretta Mester sees a compelling case for a half-point hike at the last rate meeting and reiterates the need to bring rates above 5%

  • Both Fed and markets underestimating how high rates may have to rise (Bloomberg)

  • Investors drop bets on falling US rates in face of stubborn inflation (FT)

  • ECB 50-bps hike in March a done deal (Reuters)

  • BoJ will scale down ultraloose policy this year (Nikkei)


  • Tesla recalls 362,000 vehicles over self-driving software crash risks (Reuters)

  • DocuSign to lay off 10% of workers, on top of the 9% it cut in September (CNBC)


Cisco (+5.3%): Double beat, raised quarterly dividend by 3% and upgraded its near-term outlook.

  • "... our fiscal 2023 is shaping up to be a great year...We are raising our full year outlook driven by our growing recurring revenue base and RPO, along with our healthy backlog & the steps we have taken to improve supply.” - CEO Chuck Robbins

Hasbro (+1.2%): EPS and revenue in-line, FY23 guidance was light amid a sharp decline in demand as more customers cut back spending on toys and games alongside rising prices. 

Paramount Global (-4.6%): EPS and revenue miss, added 9.9m Paramount Plus subscribers but flagged a 7% decline in advertising revenue for its TV business, noted a US$1.3-1.5bn impairment charge in Q1.

TripAdvisor (-10.2%): Double beat, full-year revenue rose 65% to US$1.49bn, however nights and experiences booked of 88.2m were below expectations of 90.1m. Bernstein also downgraded the stock to Market-Perform from Outperform, citing that the company’s strategic plan was more defensive than offensive.


  • US producer price index rose 0.7% month-on-month in January vs. 0.4% expected due to higher energy costs

  • US initial jobless claims were 194,000 versus 200,000 estimates, reiterating the tight labour market, hawkish Fed and soft landing theme

  • China new home prices increase in January for first time in a year (Reuters)

  • Australia unemployment rate unexpectedly jumps (Bloomberg)

  • US 30 year mortgage rates hit their highest level in more than a month (Bloomberg)

Industry ETFs

Fri 17 Feb 23, 8:29am (AEST)

Description Last Chg %
Nickel 34.79 +1.81%
Steel 67.4 +0.93%
Copper Miners 39.11 +0.64%
Gold 170.89 -0.06%
Silver 19.89 -0.25%
Lithium & Battery Tech 69.05 -0.64%
Aluminum 50.2999 -0.99%
Strategic Metals 89.66 -1.61%
Uranium 22.63 -1.68%
Aerospace & Defense 117.58 -1.06%
Global Jets 20.32 -1.77%
Cannabis 11.73 -0.51%
Biotechnology 133.77 -1.26%
Description Last Chg %
Bitcoin 15.09 +1.79%
Hydrogen 13.08 -2.37%
CleanTech 16.6 -3.49%
Solar 79.04 -3.56%
Sports Betting/Gaming 16.66 -0.66%
Electric Vehicles 24.59 -1.22%
Video Games/eSports 50.15 -1.32%
Robotics & AI 24.28 -1.36%
Cloud Computing 18.82 -2.13%
Semiconductor 433.12 -2.45%
FinTech 22.45 -2.63%
Cybersecurity 23.75 -2.95%
E-commerce 19.89 -3.17%

Deeper Dive

Charts of the Week

Source: Commsec

I’ll keep it short and sweet this week. Until yesterday the ASX was tracking lower, continuing to push away from the all-time highs. We saw a bit of a bounce yesterday and volumes are picking up, but ultimately the technical evidence is showing the least conviction that it has for some time. Clearly, with reporting season well underway, neither the bulls nor bears are willing to take any big bets at the moment, and that is being reflected on the chart. And with plenty more of reporting season to wade through, this sideways grind might continue for some time yet.

South32 (ASX: S32)

Source: Commsec

Before I started at Livewire, I was an equities analyst and a fund manager. My favourite sector, by far, has always been materials, and one of my preferred stocks has been South32 (S32). Yesterday I spoke to Hendrik Bothma from Katana Asset Management regarding the S32 results (an interview which will be published later today) and he talked about S32 stacking up both fundamentally and technically. I must admit, I hadn’t looked at the S32 chart for a while, but Bothma piqued my interest, and here we are.

The chart does look solid. We’ve recently seen a break above a sideways congestion zone – through $4.50, and yesterday (off the back of the results no less), that $4.50 level was tested and respected as support. That’s an encouraging sign. With the stock ‘de-risked’ from results, could we see some follow through to the upside. Time will tell but this looks like one to keep an eye on.

Altium (ASX: ALU)

Source: Commsec

As charts go, there are none that look much sweeter (to me, at least) at the moment than Altium. The EMAs are showing bullish trend alignment across multiple timeframes, we’ve seen a breakout out of a long-term sideways congestion zone – and through a big round number at $40, which has been supported by a volume spike. Furthermore, the RSI is not overcooked. What more could you ask for?

Interesting stuff

Yields up, stocks refuse to go down: "Based on historical regressions, the move in 2 year interest rates since the Fed meeting should result in a 5-10% selloff in Nasdaq, which is actually up ~3% since ... this divergence cannot go much further, in our view, and may revert." - JPMorgan's Kolanovic

Tempting yields: The US 6-month Treasury yield now starts with a 5 handle for the first time since 2007. Many investors are likely asking themselves why would they want to risk things like a recession or earnings crash when they can get 5% safely.

Price inflation 101: When too much money chases too few goods and services. Both high growth in money supply and major changes in the supply of goods and services significantly affect price inflation. Long-term charts from developed countries illustrate that areas where money supply growth exceeded changes in the consumer price index were generally associated to some sort of productivity boom.

Screenshot 2023-02-16 at 9.18.04 am

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Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Lendlease (LLC) – $0.049, Argo Investments (ARG) – $0.165, Kelly Partners Group (KPG) – $0.004

  • Dividends paid: Euroz Harleys Group (EZL) – $0.025, Cromwell Property Group (CWM) – $0.01375

  • Listing: None

Economic calendar (AEDT):

  • 9:30 am: RBA Lowe Speech

  • 10:00 am: Fed Mester Speech

  • 6:00 pm: Germany Producer Price Index

  • 6:00 pm: UK Retail Sales

Written By

Chris Conway

Managing Editor

Chris is the Managing Editor at Livewire Markets and Market Index. His passion is equity research, portfolio construction, and investment education. He is also very keen on the powerful processes that can help all investors identify great opportunities and outperform the market, and wants to bring them to life and share them with you.

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