Market Wraps

Morning Wrap: US stocks sink and bond yields crash, Silicon Valley Bank collapses, ASX to fall

Mon 13 Mar 23, 8:15am (AEST)

ASX futures are down 39 points, to 7,109 as of 8am AEDT

On any other day, a hot jobs report stateside would be the big story for why US stocks fell sharply. But Friday was no ordinary day, as the Silicon Valley Bank went from a $267 share price to bankruptcy in just 48 hours. Meanwhile, there were eye-watering moves across the US Treasuries curve after that jobs report. And in the local equities space, Ord Minnett and UBS have made four downgrades to stocks between them.

Let’s go. 

Overnight Summary

Mon 13 Mar 23, 8:15am (AEST)

Name Value Chg %
Major Indices
S&P 500 3,862 -1.45%
Dow Jones 31,910 -1.07%
NASDAQ Comp 11,139 -1.76%
Russell 2000 1,773 -2.95%
Country Indices
Canada 19,775 -1.55%
China 3,230 -1.40%
Germany 15,428 -1.31%
Hong Kong 19,320 -3.04%
India 59,135 -1.12%
Japan 28,144 -1.67%
United Kingdom 7,748 -1.67%
Name Value Chg %
Commodities (USD)
Gold 1,872.70 +2.08%
Iron Ore 129.44 -
Copper 4.007 -0.79%
WTI Oil 76.68 +1.27%
AUD/USD 0.6613 +0.53%
Bitcoin (AUD) 32,404 +4.21%
Ethereum (AUD) 2,350 +5.17%
US 10 Yr T-bond 3.695 -5.86%
VIX 25 +9.69%

US Sectors

Mon 13 Mar 23, 8:15am (AEST)

Sector Chg %
Consumer Staples -0.46%
Health Care -0.74%
Consumer Discretionary -0.98%
Energy -1.42%
Communication Services -1.43%
Utilities -1.60%
Information Technology -1.74%
Financials -1.76%
Industrials -1.82%
Materials -2.15%
Real Estate -3.25%


S&P 500 Session Chart 10th March 2023
The market started down and it never looked back. (Source: TradingView)


  • Investors dump US bank shares amid fears over value of bond portfolios (FT)

  • Layoffs in January-February hit highest level since 2009, with cuts concentrated in tech (Reuters)

  • RBA governor Lowe met bank boss, billionaire after rate hike (The Australian)

  • US Treasury met with commodity traders to offer reassurances over expanding Russian crude oil trade (FT)

  • MSCI China index erases 2023 rally after NPC underwhelmed on stimulus (Bloomberg)

  • The US two-year yield dropped more than 40bp in 48 hours, with a huge surge in buying right across the curve up to the US 30-year bond.

  • Last week’s loss equals the XJO’s longest string of weekly losses since 2014. 

Refinitiv/David Scutt XJO Weekly
Source: Refinitiv/David Scutt


  • Signature Bank, one of the main banks to the cryptocurrency industry, fell 23% amid a selloff in bank stocks due to the SVB Saga. Other major banks such as Charles Schwab also fell on Friday.

  • DocuSign fell 19% even after the company’s fourth-quarter results beat expectations. CFO Cynthia Gaylor also announced her resignation.

  • Allbirds crashed 40% after its fourth-quarter results missed analyst expectations. Additionally, the company posted its first year-over-year sales decline. 

  • Gap shares dropped more than 6% after it posted a big quarterly loss, declining sales and a series of executive changes as it searches for a permanent CEO.


US non-farm payrolls added 311,000 jobs, beating consensus expectations of 224,000 jobs.

  • Unemployment rate ticked up to 3.6% because of an increase in the participation rate (i.e. more people coming back into the workforce looking for work), the forecast was for no change at 3.4%.

  • Average hourly earnings clocked in at +0.2% month-on-month, cooler than the 0.3% expected.

Canada labour market doubled expectations, with 21,800 jobs created

  • A far cry from January’s +150,000 figure although this number was likely to be affected by a range of seasonal factors.

  • The unemployment rate is now 5%, beating the forecast of 5.1%.

Industry ETFs

Mon 13 Mar 23, 8:15am (AEST)

Description Last Chg %
Silver 18.44 +2.28%
Gold 170.2 +2.14%
Nickel 30.7633 +0.12%
Aluminum 48.1829 -0.05%
Copper Miners 36.48 -1.21%
Lithium & Battery Tech 61.62 -1.64%
Uranium 20.09 -2.29%
Strategic Metals 81.1 -2.69%
Steel 65.91 -3.43%
Aerospace & Defense 114.12 -0.96%
Global Jets 19.59 -2.20%
Biotechnology 123.95 -1.60%
Cannabis 9.94 -6.04%
Description Last Chg %
Bitcoin 12.35 -0.81%
CleanTech 15.81 -1.71%
Solar 77.02 -2.54%
Hydrogen 11.72 -5.12%
Video Games/eSports 47.49 -1.05%
Semiconductor 412.88 -1.93%
Electric Vehicles 22.92 -2.09%
Robotics & AI 23.8 -2.14%
Sports Betting/Gaming 15.99 -2.19%
Cybersecurity 22.23 -2.47%
E-commerce 17.42 -2.99%
Cloud Computing 16.91 -3.08%
FinTech 20.5 -3.80%

Deeper Dive

The Silicon Valley Bank Saga

If you thought FTX’s fall from grace was quick, spare a thought for Silicon Valley Bank. All was fine (seemingly) until Thursday morning Sydney time when the institution made a surprise filing to the US SEC.

Silicon Valley Bank is a regional institution that primarily serves the smaller players in California’s tech utopia - namely startups and venture capitalists. On Wednesday evening US time, it told regulators that it was selling nearly $32 billion in assets as well as a lot of its own stock to strengthen its balance sheet. A lot of these assets were not set to mature for a long time to come, so selling these at a time of higher rates and lower valuations leads to heavy losses.

What it didn’t reveal was that the bank was falling apart before everyone’s eyes. Those illiquid and low-yielding assets were fine to hold in a near-zero interest rate world, but an absolute disaster when there is increasing talk of the Federal Reserve hiking rates to 6%. As soon as the announcement came, a multi-billion dollar bank run began. 

To cut a very long story short, the US banking regulator has taken over and a receiver has since been appointed. It’s the second-largest bank collapse in modern US history, only superseded by Washington Mutual in 2008. 

But its ramifications may last a lot longer than that. Will these startup owners and VCs be able to get their money back? How much trouble were they in before all of this spilled out? 

Bloomberg reporting may help answer that second question - as it’s now emerged the CEO sold millions in stock just days before the collapse. 

Most importantly, what does this mean for the rest of the US financial system? 

Investors have already made up their minds - at least for now. The KBW Banks Index fell nearly 16% last week alone. And while Wall Street banks are considered more sturdy than their regional counterparts, 2008 is always there in the back of analysts’ minds. 

Broker Watch

Four post-earnings downgrades have come through from various brokers. Let’s take them company-by-company.

  • UBS has downgraded Qantas Airways (ASX: QAN) to NEUTRAL from buy and cut the price target by 15 cents to $7.60/share. It’s done this despite believing there is further upside to its valuation. But when the stock is up 40%+ in the last year, it’s hard to see another 40% upside in its runway. Regardless, the broker expects earnings to prove resilient into the next fiscal year, and feels dividends could return soon.

  • Ord Minnett now rates Myer (ASX: MYR) as a LIGHTEN instead of a hold. Analysts have a dimmer view on the consumer outlook and believe current demand for apparel and homewares is unsustainable. Price target of 75 cents/share is unchanged.

  • Ord Minnett also lowered its rating for The Lottery Corporation (ASX: TLC) on valuation grounds after a recent run in its share price. It’s now a LIGHTEN instead of a hold with a price target of $4.70/share.

  • Ord Minnett downgraded its rating for Xero (ASX: XRO) to SELL from Lighten. Xero has announced a cost reduction program, with hundreds of staff to be let go and OPEX to be reduced through FY24. The share price rocketed afterwards. Ords’ price target is a relatively bearish $54/share, way down from its current price.


Cathie Wood is famous for her ability to sell the ARK Innovation ETF even when times are tough on growth stocks (read: 2022). But how good is she at running all that cash? Well, if you believe this chart, it's not that great. Since inception, it’s claimed approximately $300 million in fees… and lost its investors some $10 billion. I guess she does innovate - just not in the right way.

ARK Innovation ETF Cathie Wood
Source: Koyfin

On the value end of the spectrum, everyone loves a hiked dividend but better than that, they love a share buyback. Even a bad earnings result can be overlooked once a company announces one of these. In the US earnings season just passed, more companies announced share buybacks - but as this chart shows, the actual buying back appears to have stalled. Usually, there is a 79% correlation between talking and doing but this chart from Deutsche Bank appears to show that correlation has fractured in recent months. Deutsche Bank buybacks v announcements

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Dusk Group (DSK) – $0.08, Chorus (CNU) – $0.131, Pepper Money (PPM) – $0.051

  • Dividends paid: None

  • Listing: None

Economic calendar (AEDT):

No major economic announcements.

Regular writer Kerry Sun is away today.

Written By

Hans Lee

Senior Editor

Hans is one of the Senior Editors at Livewire Markets and Market Index. He created Signal or Noise and leads the team's coverage of the global economy and fixed income markets.

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