Morning wrap: US stocks extend tech led rally, ASX set to follow
ASX Futures (SPI 200) imply the ASX will open 42 points higher, up 0.6%.
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ASX Futures (SPI 200) imply the ASX will open 42 points higher, up 0.6%.
US stocks bounced for a second consecutive session, once again led by recovering tech stocks.
Despite closing January on a more positive note, the S&P 500 (large cap) still logged its worst month since the March 2020 selloff.
Overnight Summary
Name | Value | % Chg |
|---|---|---|
US Indices | ||
 S&P 500 | 4,516 | +1.89% |
Dow Jones | 35,132 | +1.17% |
NASDAQ 100 | 14,240 | +3.41% |
Russell 2000 | 2,028 | +3.05% |
Country Indices | ||
 Canada | 21,098 | +1.72% |
 China | 0 | 0.00% |
 Germany | 15,471 | +0.99% |
 Hong Kong | 23,802 | +1.07% |
 India | 58,863 | +1.46% |
 Japan | 27,078 | +0.28% |
 United Kingdom | 7,464 | -0.02% |
Name | Value | % Chg |
|---|---|---|
Commodities (USD) | ||
 Gold | 1,798.7 | +0.13% |
 Iron Ore | 138.79 | +0.54% |
 Copper | 4.336 | +0.27% |
 WTI Oil | 88.38 | +0.26% |
Currency | ||
 AUD/USD | 0.7068 | +0.04% |
Cryptocurrency | ||
 Bitcoin | 54,516 | +1.51% |
 Ethereum | 3,807 | +4.54% |
Miscellaneous | ||
U.S. 10 Year Treasury | 1.782 | 0.00% |
VIX | 24.83 | -10.23% |
Key points
The S&P 500 and Dow Jones (blue chip) have both reclaimed their 200-day moving averages, keeping the long-term upward trend intact
Despite the market rallying for a second straight session, investors should remain cautious. Sentiment remains bearish and there’s no shortage of stocks down 40-80% from last year’s highs
The markets are now pricing in at least five 25 basis point interest rate hikes by year-end
Tech shares have been the most hard hit as higher rates expose lofty valuations and raises funding costs
US AAII Investor Sentiment Survey
US Sectors
Sector | % Chg |
|---|---|
| Consumer Discretionary | +3.81% |
| Information Technology | +2.68% |
| Communication Services | +2.40% |
| Utilities | +1.85% |
| Materials | +1.44% |
| Real Estate | +1.25% |
Sector | % Chg |
|---|---|
| Industrials | +1.10% |
| Financials | +0.89% |
| Health Care | +0.67% |
| Consumer Staples | +0.48% |
| Energy | +0.44% |
▲ Consumer discretionary
Amazon lifted the sector higher after rallying 3.9%.
Other notable winners include Etsy (7.7%), Expedia (5%), eBay (4.4%) and Royal Caribbean Cruises (4.4%).
▲ Tech
Netflix and Spotify both rallied more than 10% following an upgrade from Citi. The broker said that the recent selloff represents an attractive buying opportunity. Before today’s rebound, Netflix was down -36% in January while Spotify was down -26%.
Tesla was another recipient of a broker upgrade, up 10.7% by market close. Credit Suisse upgraded the stock to outperform, saying the broader market pullback had brought Tesla into oversold territory.
This week is another big week of tech-oriented earnings. What we’re watching this week:
Tues: Alphabet, PayPal, Starbucks, ExxonMobil, AMD
Weds: Meta, Spotify
Thurs: Amazon, Ford
▲ Materials
The US-listed counterparts of BHP (ASX: BHP) and Rio Tinto (ASX: RIO) fell -0.9% and -2.4% respectively, going against the market's broad-based rally.
Iron ore prices fell rather substantially, down -4.25% to US$141.75 a tonne.
Most traders believe that iron ore prices should stay relatively stable until the end of China's Lunar New Year holiday on February 8, according to Fastmarkets.
Iron ore sentiment might be weighed by an announcement from China’s National Development and Reform Commission (NDRC) last Friday, vowing to strengthen oversight of iron ore prices and crack down on speculation.
Industry ETFs
Name | Value | % Chg |
|---|---|---|
Commodities | ||
| Lithium & Battery Tech | 74.8 | +4.64% |
| Strategic Metals | 97.11 | +4.61% |
| Uranium | 19.97 | +3.46% |
| Copper Miners | 36.96 | +1.22% |
| Gold | 167.1 | +0.59% |
| Silver | 20.71 | +0.43% |
| Steel | 52.33 | -0.04% |
| Nickel | 29.3261 | -0.05% |
| Aluminum | 64.0829 | -0.99% |
Industrials | ||
| Global Jets | 20.42 | +3.92% |
| Aerospace & Defense | 99.69 | +1.44% |
Healthcare | ||
| Cannabis | 4.68 | +8.76% |
| Biotechnology | 127.97 | +3.04% |
Name | Value | % Chg |
|---|---|---|
Cryptocurrency | ||
| Bitcoin | 23.77 | +1.64% |
Renewables | ||
| Hydrogen | 14.49 | +9.59% |
| Solar | 60.51 | +8.21% |
| CleanTech | 13.75 | +7.42% |
Technology | ||
| E-commerce | 23.77 | +6.44% |
| Video Games/eSports | 59.12 | +5.70% |
| FinTech | 32.14 | +5.57% |
| Cloud Computing | 22.14 | +5.42% |
| Semiconductor | 455.03 | +5.37% |
| Robotics & AI | 28.39 | +4.61% |
| Cybersecurity | 27.42 | +4.38% |
| Sports Betting/Gaming | 20.87 | +4.26% |
| Electric Vehicles | 27.1 | +4.21% |
ASX Morning Brief
#1 Tech
The FinTech, Cloud and eCommerce ETFs all closed at least 4.9% higher. Wall Street’s tech-led rally could see another positive session for local names.
Notably, US-listed BNPL players like Block and Affirm continued to bounce, up 6.4% and 10.2% respectively. This could drive another positive session for local players including:
#2 Travel
The Global Jets ETF has hovered close to 14-month lows on three separate occasions in the past two months.
Encouragingly, its managed to bounce off the low $19 mark each and every time.
US Global Jets ETF, TradingView
Most US airlines rallied between 3-5% overnight. While other travel names including cruise line operator Carnival Corp, Airbnb and Expedia closed the session 4.4%, 5.1% and 7.8% higher respectively.
#3 Hydrogen
The Hydrogen ETF topped the leaderboards as investors returned to more speculative pockets of the market.
Before today’s bounce, the ETF had declined -50% from November 2021 highs.
This could see some positive flow for local names, notably Hazer (ASX: HZR).
Key Events
ASX corporate actions occurring today:
Ex-dividend: AAA, NBI,
Dividends paid: None today
IPOs: APS*
Issued shares: ADO, AGE, AGY, AHX, AM7, AQX, ARO, ARR, AZI, BET, CAM, CBE, CHK, CIP, CIW, CNB, COB, COF, CPH, DKM, DRX, DUB, EMD, FZO
Other things of interest
ABS lending indicators at 11:30 am AEDT
ABS retail trading at 11:30 am AEDT
RBA interest rate decision at 2:30 pm AEDT
The RBA is expected to keep rates on hold at 0.1%
