Morning wrap: US stocks stage late selloff, ASX to open lower

ASX Futures (SPI 200) imply the ASX will open 7 points lower, down -0.1%.

All three major US indexes were trading in positive territory up until the last hour of trade, before closing modestly lower. It looks like investors are happy to take profits in what is the second last trading session of 2021.

The Dow Jones and S&P 500 were both on track for another record close up until the last hour of trade. 

Some last-minute selling across technology, energy and defensive stocks has taken some heat out of the Christmas rally.

The last five trading days of the year and the first two sessions in January is historically a strong period for stocks, dubbed the “Santa Claus rally”. 

On the economic front, the US Labor Department reported that 198,000 applied for unemployment benefits in the week ended 25 December. This marks a 52-week low for new jobless claims despite the rapid spread of omicron. 

Along with jobless claims, there is some encouraging news regarding omicron. The number of Americans in hospital with covid is sitting around 60,000 or half the figure seen in January, according to the Centers for Disease Control and Prevention. This is despite the US logging almost half a million cases.

Tech stocks sold off just before close, dragging the Nasdaq into negative territory. Mega caps struggled to finish in positive territory, with names like Apple, Alphabet and Microsoft down less than -1%. 

Semiconductor stocks struggled, with AMD down -2.1% and Nvidia closing -1.4% lower. 

Energy stocks fell as the global spike in covid cases weighed on sentiment. Crude oil closed slightly lower, snapping its six-day winning streak. 

Material stocks as a whole declined, but the US-listed counterparts of BHP Group (ASX: BHP) and Rio Tinto (ASX: RIO) rose 0.1% and 1.0% respectively.

ASX Sectors in play

ETF GAINERS

The Hydrogen ETF rebounded after a sharp decline yesterday, driven by a sharp -12.9% selloff from one of its major holdings, Fuel Cell Energy. 

• The weak session yesterday triggered further losses for ASX hydrogen stocks on Thursday. Hazer Group (ASX: HZR) closed -1.7% lower while Lion Energy (ASX: LIO) was down -2.9%. 

• The rebound could see some positive flow come back to local hydrogen names 

The Sports Betting & iGaming ETF could be a chart of interest, working its way through a double bottom and testing a 1-month high. A similar chart set up to the likes of BHP and Fortescue Metals Group (ASX: FMG).

Major US sports betting stocks like DraftKings and Penn National Gaming have declined more than -30% year-to-date amid a broad-based selloff for richly-valued technology stocks.

Investors could keep an eye out for ASX names like PointsBet (ASX: PBH), BetMakers Technology Group (ASX: BET) and Bluebet (ASX: BBT) and whether or not they follow through with the ETFs recent rebound.

ETF LOSERS

The Uranium ETF went ex-dividend for US$1.3 a share. This was responsible for roughly 80% of last night’s -US$1.57 decline. That said, the ETF is now trading at a 4-month low, closing just below its 200-day moving average. 

Similarly, the FinTech ETF also went ex-dividend for US$2.16 a share, driving most of its losses overnight. 

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