ASX Futures (SPI 200) imply the ASX 200 will open 9 points lower, down -0.1%.
Wall Street managed to finish higher as defensives outperformed, US and European economic data continues to soften, energy stocks begin to give back year-to-date gains and several central banks hiked interest rates.
Let’s dive in.
Fri 24 Jun 22, 8:37am (AEST)
|US 10 Yr T-bond||3.068||-2.79%|
US stocks continue to bounce in the face of softening economic data and more hawkish comments from the Fed.
The Fed's Michelle Bowman signalled support for a 75 bps rate hike in July and a series of 50 bps in subsequent meetings. Bowman said "depending on how the economy evolves, further increases in the target range … may be needed after that."
Defensive stocks rallied in the face of weakening economic data. Flash PMI readings show that inflation is taking a toll on economic growth. Several European countries and the US reported manufacturing and services activity falling to year-to-date lows.
7 out of 11 US sectors were green
Utilities, Health Care and Real Estate sectors rose more than 2%
Staples, Discretionary and Tech also outperformed
Energy and Materials underperformed
59% of US stocks advanced
77% of US stocks trade below their 200-day moving average (78% on Thursday, 79% a week ago)
Factset Research (+8%) rallied after reporting better-than-expected results. The financial data company said it expects growth to be at the upper end of its previous guidance for the full year
Netflix (+1.6%) executives confirmed ads are coming to the streaming services
Occidental Petroleum Corp (+0.6%) as Warren Buffet’s Berkshire Hathaway continues to increase its stake in the oil and gas company. Occidental shares are are up 81% year-to-date
United Airlines (-2.5%) after trimming 12% of flights out of Newark in an attempt to reduce delays. The airline plans to cut 50 flights daily from 1 July 2022
Norway raises interest rates by 50 bps to 1.25%
4th hike this year and the largest in 20 years
Philippines raises interest rates by 25 bps to 2.5%
2nd hike this year
Mexico raises interest rates by 75 bps to 7.75%
9th rate hike this year
The US, France, Germany and the UK all reported manufacturing and services PMIs for June
All PMIs came in below May readings
All PMIs were below 55 and above 50 (below 50 indicates contraction)
French PMIs slumped to the weakest since peak Omicron disruptions, which was at the beginning of 2022
US manufacturing activity fell to lowest levels since July 2020
US filings for unemployment benefits fell -2,000 to 229,000
The figure remains close to a 5-month high, potentially indicating that the tight labour market is starting to cool
Iron ore futures snap a massive losing streak, supported by firmer buying sentiment for cargoes with August laycans, sources told Fastmarkets
Oil prices slip amid softening economic data and emerging demand destruction concerns
Gold retreats amid another round of hawkish commentary from the Fed
Friday, 24 June 2022
Friday, 24 June 2022
|Lithium & Battery Tech||72.7||+1.38%|
|Aerospace & Defense||96.15||-0.79%|
|Robotics & AI||20.91||-0.05%|
Dr Copper is getting more sick with every passing day, down another -5.2% overnight to US$3.75/lb and -17.9% since 2 June.
Likewise, the Global X Copper Miners ETF gave back another -6.1% overnight, and down -25.8% since its 7 June high.
Copper needs to stabilise otherwise its more bad news for local miners.
We're seeing a few tech ETFs stabilise in recent days, making a push towards 2-week highs. (Bigger picture: these ETFs are down around -50% from last year's highs)
The Global X Cloud ETF headlined overnight gains, up 4.8%. This was led by names including:
Buyers also returned to beaten up fintech names including:
Oil prices continue to soften in the face of tight supplies and declining production.
"Looking at the respective futures curves, both Brent and WTI are still heavily in backwardation, suggesting that prompt oil supplies remain as tight as ever, even as prices across the curves fall," said Oanda senior market analyst, Jeffrey Halley. "
Increasing recession fears appear to be prompting a culling of heavy speculative long positioning in both contracts, even as in the real world, energy tightness is as real as ever."
ASX corporate actions occurring today:
Dividends paid: ATM, MEC, WBC
Issued shares: ACR, AVL, BCA, BIO, CCA, CR9, CXO, DTR, EHL, FTZ, GMA, GOR, IMB, KFE, LKE, MFG, MRL, MTH, NAB, OCA, OFX, ORN, PIA, RF1, RRR, SGH
Other things of interest (AEST):
UK Retail Sales (May) at 4:00 pm
US New Home Sales (May) at 12:00 am
Finance Writer & Social Media
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