ASX Futures (SPI 200) imply the ASX 200 will open 21 points lower, down -0.32%.
Major US benchmarks gave back early gains to finish lower, Apple plans to slow hiring and spending growth, Goldman Sachs beat earnings expectations and China is weighing a grace period for homebuyers amid a mortgage boycott.
Let’s dive in.
Tue 19 Jul 22, 8:33am (AEST)
|US 10 Yr T-bond||2.96||+1.02%|
US stocks opened higher thanks to better-than-expected earnings from Goldman Sachs and Bank of America. You could almost feel risk appetite coming back, with Bitcoin briefly rallying 9.5% to 1-month high of US$22,777.
A Bloomberg report about Apple's plans to slow hiring and spending growth was the most likely reason as to why US stocks started to fade in afternoon trade.
3 out of 11 US sectors advanced
Energy firmly in the lead as oil prices bounced back
Materials and Discretionary also eked out some gains
Healthcare, Utilities, Real Estate and Tech underperformed
47% of US stocks declined
74% of US stocks trade below their 200-day moving average (74% on Monday, 74% a week ago)
Coinbase (+9.1%) shares rallied after DNB Asset Management, one of Europe’s largest asset managers, bought shares in the cryptocurrency trading platform
Delta Air Lines (+3.5%, session high: 6.3%) is buying 100 Boeing 737 Max 10 planes, it’s first major order for new aircraft from US manufacturers in more than a decade
Goldman Sachs (+2.5%, session high: 5.9%) second quarter profit fell -48% to US$2.79bn thanks to industry-wide declines in investment banking activity such as IPOs and M&A. Still, the bank’s earnings came in ahead of Wall Street expectations
Bank of America (+0.03%, session high: 3.5%) second quarter earnings were slightly ahead of analyst expectations. Profits fell -32% to US$6.25bn as the bank set aside US$523m for credit losses
“Solid client activity across our businesses, coupled with higher interest rates, drove strong net interest income growth and allowed us to perform well in a weakened capital markets environment,” said CEO Brian Moynihan
Apple (-2.1%) plans to slow hiring and spending for some teams in 2023, according to Bloomberg. There are no plans to back-fill roles or add new staff in certain cases
US corporate earnings we’re watching this week:
Tuesday: IBM, Johnson & Johnson, Hasbro
Wednesday: Netflix, Nasdaq
Thursday: Tesla, AT&T, American Airlines, Domino’s Pizza
Friday: Snapchat, Verizon, American Express, Twitter, Verizon
New Zealand inflation was 7.3% year-on-year in the June quarter, a 32-year high
Economists expected a reading of 7.1%
Housing and household utilities were the top contributors, followed by fuel prices
Iron ore rebounded from an 8-month low of US$96 last week, according to Fastmarkets. Chinese regulators are weighing a grace period for angry homebuyers who are boycotting their mortgage repayments on delayed property projects
“The rapid escalation in mortgage repayment refusals underscores the importance of policy support to revive housing buyers’ confidence and stabilise the housing price,” J.P.Morgan analysts said in a note, Reuters reported
Oil prices could not stay below US$100 as investors refocus on the tight supply side
Gold is still trying to stabilise around its new 16-month low. Easing Fed rate hike expectations and a slight pullback for the US dollar is beginning to see some positive flow
Tuesday, 19 July 2022
Tuesday, 19 July 2022
|Lithium & Battery Tech||71.11||+0.51%|
|Aerospace & Defense||96.94||-1.23%|
|Robotics & AI||20.52||+0.24%|
Most ETFs we track (above) were green but like the rest of the market, closed well below session highs. Notable movers include:
Rare Earth/Strategic Metals +2% (session high: +4.1%)
Uranium +1.8% (session high: +3.8%)
Steel +1.6% (session high: 3.5%)
Fintech +1.1% (session high: 3.9%)
Jets +0.76% (session high +3.5%)
Wall Street is hand-balling us a weak finish and that's been reflected in the -0.32% from SPI futures.
"Crude prices are back where they belong, over the US$100 a barrel level, after President Biden’s trip to the Mideast did not yield any oil commitments by the Saudis," said Oanda senior market analyst, Ed Moya.
"The oil market will remain tight as the latest earnings updates reinforced how strong the US economy remains. The short-term crude demand outlook should stabilize here," he added.
The Global X Hydrogen ETF topped our ETF list, up an outsized 7.4%.
The ETF invests in companies involved in hydrogen production, hydrogen fuel cells and other technologies related to using hydrogen as an energy source. It's listed on the Nasdaq, but a useful indicator for hydrogen sector sentiment and performance.
The ETFs top 4 holdings (~42% of net assets) rallied strongly overnight (in order of weighting).
Nel Asa (+12.6%) received its largest ever purchase order from an undisclosed US customer for 200 MW of alkaline electrolyser equipment
Bloom Energy (+4.7%)
Plug Power (+6.2%)
Ballard Power Systems (+9%)
Copper is finally having a green day after a -30% correction from June highs.
Copper prices rose 3.5% in overnight trade to US$3.35/lb.
ASX corporate actions occurring today:
Dividends paid: None
Issued shares: ACW, AOU, AVC, DDB, ELE, ESR, FRX, FXG, GLA, HFY, IDA, IPB, LKO, LNU, LRS, MGU, NAB, OAR, POD, PPC, R3D, SNZ, WTC
Other things of interest (AEST):
RBA Meeting Minutes at 11:30 am
UK Unemployment Rate (May) at 4:00 pm
US Building Permits and Housing Starts (June) at 10:30 pm
Finance Writer & Social Media
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