Market Wraps

Morning Wrap: US inflation cools, Nasdaq up 20% from June lows, ASX set to rally

Thu 11 Aug 22, 8:39am (AEDT)

ASX Futures (SPI 200) imply the ASX 200 will open 70 points higher, up 1.01%. 

Wall Street rallies on cooler-than-expected inflation figures, the Fed is more likely to raise rates by 50 bps in September and Elon Musk sold almost US$7bn worth of Tesla stock. 

Let’s dive in.

Overnight Summary

Thu 11 Aug 22, 8:39am (AEDT)

Name Value Chg %
Major Indices
S&P 500 4,210 +2.13%
Dow Jones 33,310 +1.63%
NASDAQ Comp 12,855 +2.89%
Russell 2000 1,969 +2.95%
Country Indices
Canada 19,886 +1.57%
China 3,230 -0.54%
Germany 13,701 +1.23%
Hong Kong 19,611 -1.96%
India 58,817 -0.06%
Japan 27,819 -0.65%
United Kingdom 7,507 +0.25%
Name Value Chg %
Commodities (USD)
Gold 1,808.00 -0.31%
Iron Ore 109.63 -
Copper 3.638 -0.32%
WTI Oil 91.93 0.00%
AUD/USD 0.7078 +0.06%
Bitcoin (AUD) 33,856 +2.77%
Ethereum (AUD) 2,628 +8.35%
US 10 Yr T-bond 2.786 -0.39%
VIX 20 -9.32%


US stocks are surging after inflation eased from 41-year highs, down to 8.5% in July. The likelihood of a 50 bps rate hike in September rose from 32% a day ago to 57.5%, according to CME Group.

The Nasdaq 100 is now a little over 20% off its June lows and just shy of its 38.2% Fib retracement. Historically, this defines a new uptrend and/or bull market, with disruptions only likely achieved through macroeconomic events.

Elsewhere, 2022 is on track to be the worst year for US listings since 2009. IPOs have raised roughly US$5bn in the first seven months this year, a 96% decline compared to the same period in 2021, according to Refinitiv. 

  • All 11 US sectors advanced

  • Growth heavy sectors rose at least 2%

  • Defensive sectors were relative underperformers

  • 79% of US stocks advanced

  • 49% of US stocks trade below their 200-day moving average (55% on Wednesday, 56% a week ago)


  • Unity Software (+10.9%) posted a second-quarter revenue jump of 9% to US$279m, which was below estimates of $298.3m. The company received a non-binding merger proposal from AppLovin at $58.85 a share earlier this week. Unity shares currently trade at $55.57 

  • Sweetgreen (+8.0%) shares reversed a -12% dip in early trade after posting US$124.9m revenue for the quarter vs. $130.2m expected. The salad chain downgraded its 2022 earnings and said it laid off 5% of its support centre workforce

    • Management blamed the slowdown on factors including “unprecedented levels of summer travel,” new covid variants and a slow return to office

  • Coinbase (+7.4%) posted a -US$1.1bn net loss and a -64% decline in revenue as investors exited the crypto market. Still, Coinbase shares rallied thanks to a rebound in crypto prices overnight, with Bitcoin up 3.3% to a 2-month high

  • Tesla (+3.9%) CEO Elon Musk sold almost US$7bn worth of Tesla stock after saying “no further TSLA sales planned” in April

    • On Twitter, Elon said “In the (hopefully unlikely” event that Twitter forces this deal to close and some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock

After hours movers:

  • Walt Disney (+4%, after hours: +6.6%) posted better-than-expected Disney+ subscription numbers for the quarter, up 31% to 152m. Combined with its other streaming services such as Hulu and ESPN+, the Group had 220m subscribers

    • “We have not yet seen demand abate at all and we still have many days when people cannot get reservations,” said CFO Christine McCarthy in relation to theme park performance 


US corporate earnings we’re watching this week:

  • Thursday: Rivian, Baidu

  • Friday: Spectrum Brands


  • Chinese inflation rose 2.7% in July from a year earlier, up from 2.5% in June

    • Highest level in the last two years

    • “We think factory gate inflation will remain on a downward trajectory throughout the rest of the year amid a further drop in commodity prices, easing supply bottlenecks and a higher base for comparison,” said Huang Zichun, China economist at Capital Economics, South China Morning Post reported

  • German inflation eased to 7.5% in July from 7.6% in June

    • Energy product prices rose 35.5% year-on-year following a 38% increase in June

  • US inflation eased to 8.5% in July from 9.1% in June

    • Consensus expected a reading of 8.7%

  • US core inflation was 5.9% in July unchanged compared to June

    • Consensus expected core inflation to accelerate to 6.1% 


  • Iron ore futures fell -0.01% to US$109.3 a tonne

    • Chinese steel mill margins returned to positive territory in August, coinciding with the bounce in iron ore prices

    • Rebar production among Chinese steel mills under Mysteel’s tracking had increased for a second week, up a larger 5.7% as improved margins boosted some steelmakers’ enthusiasm in ramping up output

  • Oil prices whipsawed after the resumption of Russian oil flows to Europe via the Druzhba pipeline, an acceleration in US oil production to levels not seen since April 2020 and EIA crude oil inventory posting a larger-than-expected build of 5.4m

  • Gold briefly rallied to session highs of US$1,807 as traders expect the Fed to begin pivoting from its aggressive rate hike stance. The gains faded after investors began piling back into risk assets


US Sectors

Thu 11 Aug 22, 8:39am (AEDT)

Sector Chg %
Materials +2.88%
Consumer Discretionary +2.87%
Information Technology +2.77%
Communication Services +2.77%
Financials +2.32%
Industrials +2.22%
Real Estate +1.44%
Health Care +1.12%
Consumer Staples +0.74%
Energy +0.71%
Utilities +0.45%

Industry ETFs

Thu 11 Aug 22, 8:39am (AEDT)

Description Last Chg %
Copper Miners 30.41 +4.11%
Strategic Metals 99.49 +3.90%
Nickel 28.7948 +3.07%
Uranium 21.06 +2.56%
Lithium & Battery Tech 76.98 +2.36%
Steel 54.88 +2.22%
Aluminum 50.6601 +0.65%
Silver 18.93 +0.11%
Gold 167.2 -0.25%
Global Jets 18.15 +2.37%
Aerospace & Defense 103.92 +1.90%
Biotechnology 129.91 +2.41%
Cannabis 18.49 +1.78%
Description Last Chg %
Bitcoin 14.23 +2.60%
Hydrogen 14.89 +8.26%
CleanTech 16.57 +5.91%
Solar 85.85 +4.99%
Cloud Computing 18.42 +5.27%
FinTech 25.5 +4.71%
Sports Betting/Gaming 16.21 +4.63%
Robotics & AI 22.39 +4.47%
Semiconductor 393.94 +4.15%
Electric Vehicles 24.24 +3.96%
E-commerce 18.51 +3.94%
Cybersecurity 27.04 +3.88%
Video Games/eSports 50.02 +2.40%

ASX Morning Brief

Forward looking performance still depends on whether or not we're in a recession, according to Canaccord Genuity.

This is a little awkward because Biden has gone ahead and changed the definition of a recession. Will we see a strong rebound in Q3 and which path will the market take?

Market outlook chart
Source: Cannacord Genuity

It goes without saying that today will be a rather risk-on session thanks to the easing inflation figures. Growth heavy sectors like tech and discretionary tend to lead, while defensives may lag.

Today's sectors to watch will be light on commentary, mostly charts.

Note: The ETFs are track are mostly US-listed ones run by Global X and VanEck. We're working on adding tickers for these ETFs. If you want the list of tickers or have any questions, feel free to shoot me an email :)

#1 Hydrogen

Global X Hydrogen ETF had its biggest up day volume since March.

Global X Hydrogen ETF
Global X Hydrogen ETF (Source: TradingView)

#2 Tech

Global X Cloud ETF chopped sideways for 3 months, could have gone either way. Now its in breakout mode.

Global X Cloud ETF chart
Global X Cloud ETF (Source: TradingView)

#3 Copper

Global X Copper Miners ETF starting to make a V-shaped recovery. Could retesting the lows of its previous trading range be in play?

Global X Copper Miners ETF Chart
Global X Copper Miners ETF (Source: TradingView)

#4 Uranium

Global X Uranium ETF is far from V-shaped like the others. Likely due to the lack of upside movement for uranium spot prices.

Forming a bit of a ledge here, just under the 200-day.

Global X Uranium ETF Chart
Global X Uranium ETF (Source: TradingView)


Key Events

Stocks going ex-dividend:

  • Thur: RIO, SSR

  • Fri: SUN

  • Mon: QVE, WOT

  • Tue: ASW, GMA, PL8

  • Wed: CBA

ASX corporate actions occurring today:

  • Dividends paid: CNI, KKC, NPR

  • Listing: None


Other things of interest (AEST): 

  • US Producer Price Index (July) at 10:30 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.

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