Market Wrap

Morning wrap: US markets closed for Martin Luther King day, ASX to open higher

Tue 18 Jan 22, 8:22am (AEST)

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ASX Futures (SPI 200) imply the ASX will open 22 points higher, up 0.3%.

Global stocks edged higher overnight in absence of the US market.

US stock and bond markets were closed in observance of Martin Luther King Jr Day.

Overnight summary

Tue 18 Jan 22, 8:22am (AEST)

Name Value Chg %
US Indices
S&P 500
4577.1099 -1.84%
Dow Jones
35,368 -1.51%
NASDAQ 100
14,507 -2.60%
Russell 2000
2,096 -3.06%
Country Indices
Canada
21,275 -1.22%
China
3,558 -0.33%
Germany
15,773 -1.01%
Hong Kong
24,128 +0.06%
India
60,099 -1.08%
Japan
27,467 -2.80%
United Kingdom
7,564 -0.63%
Name Value Chg %
Commodities (USD)
Gold
1,814.10 +0.09%
Iron Ore
127.41 -
Copper
4.396 +0.31%
WTI Oil
86.85 +1.66%
Currency
AUD/USD
0.7186 +0.05%
Cryptocurrency
Bitcoin
58,949 +0.91%
Ethereum
4,409 -0.34%
Miscellaneous
U.S. 10 Year Treasury
1.865 +5.25%
VIX
23 +18.76%

In Europe, the Stoxx 600 (blue-chips) rose 0.5%, led by media, technology and healthcare stocks. 

China’s GDP growth for the December quarter rose 4.0%. Analysts polled by Reuters were expecting fourth-quarter GDP growth of 3.6%. 

For the full year, the Chinese economy grew 8.1%, its best growth since 2011

China’s industrial production rose 4.3% in December compared to a year ago, beating Reuters’ forecasts of 3.6% growth. 

While retail sales missed expectations by a wide margin, growing just 1.7% compared to analyst expectations of a 3.7% increase. 

China’s central bank unexpectedly cut borrowing costs for medium-term loans for some financial institutions by 10 basis points to 2.85%. The move was likely in response to slowing momentum in consumption and a weakening property market.


ASX Sectors to watch

#1 Cryptocurrency

The market cap of all cryptos fell -3.3% overnight led by Bitcoin, which gave back -2.2% to US$42,134.

This could point to further weakness in local crypto-related companies including:

#2 Copper

Copper prices have gone full circle after an attempted breakout last Wednesday.

Prices have retreated back to US$4.43/lb, down from highs of US$4.58/lb.

China's property investment fell -13.9% year-on-year in December, suggesting a slowing demand for industrial metals.

Copper stockpiles in LME-registered warehouses also rose 6,550 tonnes to 92,850 tonnes, according to Reuters. The rise in inventory eased fears of tight supplies.

Local copper stocks could struggle to push higher after testing near-term highs last week. Names include:

#3 Iron ore

Iron ore prices have remained relatively unchanged ahead of China's week-long Lunar New Year holiday, which starts on Tuesday, 1 February. Investors should expect minimal price movements during this period.

The upcoming Winter Olympics in Beijing is expected to see provincial governments tighten restrictions to manage air pollution levels, weakening demand from steelmakers, according to FastMarkets.


Today’s events 

ASX corporate actions occurring today:

  • Ex-dividend: TWR

  • Dividends paid: IAF, IGB, ILB, ILC, IOZ, ISO, RCB, RDV, RGB, RSM

  • IPOs: CMX

  • Issued shares: ADD, ECS, EVR, G88, GLN, ICI, IMU, JYC, MCA, MGF, MRR, NAB, NWE, PEK, PX1

Other things of interest 

  • Interest rate decision (JP): The Bank of Japan is expected to leave interest rates unchanged at -0.1%. The announcement will be made at 2:00 PM AEDT 

  • Unemployment rate (GB): Unemployment in the United Kingdom is expected to remain steady at 4.2%. The announcement will be made at 6:00 PM AEDT 

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University and was Vice President of the University Network for Investing and Trading (UNIT). He is an avid swing trader, and drawn to breakouts and technical set ups. Outside of writing and trading, Kerry is a huge UFC fan, loves poker and bouldering.

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