Morning Wrap: US stocks tumble ahead of high-stakes jobs report, ASX 200 set to fall

US stocks tanked ahead of tonight's US payrolls report and its potential implications for the Fed's rate path, Silvergate Capital's collapse sparks broad-based weakness across the banking sector, US weekly jobless claims increase by the most in five months and you know what time it is: Charts of the Week.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 spends most of the day trending lower, closing at session lows (Source: TradingView)

MARKETS

• A bearish waiting room ahead of high-stakes nonfarm payrolls and US CPI next Tuesday as Powell flagged an even more data dependent Fed at his congressional testimony

• Bearish drivers include terminal rate expectations hitting 5.7% on Thursday, deepening yield curve inversion with 2-and-10 spread of -100 bps and QT gaining pace 

• Global bond markets pricing in steeper path for rate hikes (Bloomberg)

STOCKS

• Apple (-1.5%) reshuffles management of international business to make India its own sales region (Bloomberg)

• Adobe (-2.2%) says it will not lay off any workers this year (Bloomberg)

• Credit Suisse (-4.5%) delays annual report after SEC call (Reuters)

• Uber (-5.0%) weighs spinning off its freight division in sale or IPO (Bloomberg)

• Baidu (-7.5%) hurries to ready China’s first ChatGPT equivalent (WSJ)

• Silvergate Capital (-42.1%) plans to wind down following blow from FTX (Reuters)

EARNINGS

Asana (+18.9%): Reported a fourth-quarter adjusted loss of 15 cents per share, less consensus expectations of 27 cents. Revenue was stronger-than-expected and CEO Dustin Moskovitz also said he was buying 30 million shares. 

• "The macro headwinds continued to impact our expansions and created longer sales cycles in Q4 and will continue to impact us going into fiscal year 2024. Top of funnel demand remained stable in Q4" – CFO Tim Wan

ECONOMY

• US weekly jobless claims post largest rise in 5 months; labour market still tight (Reuters)

• Layoffs in January-February hit their highest level since 2009 (Reuters)

• China CPI inflation slows to one-year low, PCI deflation deepens (Reuters, Bloomberg)

Deeper Dive

Fed rate hikes: Pausing is a myth

It's unusual for the Fed to pause and then continue hiking. The playbook has traditionally been to keep on hiking until something breaks and they're forced to cut.

Source: Vanda Research

Chart of the Week

This segment of the morning wrap brings you weekly technical commentary on the ASX 200 and some of the more interesting charts in the market. These are not meant as recommendations. They are for illustrative purposes only. Any discussion of past performance is for educational purposes only. Past performance is not a reliable indicator of future return. Always do your own research.

ASX 200 – Uptrend support

Source: Commsec

It has been a bit of a nothing week on the ASX, at least as far as major technical developments go. The bulls continued to defend 7200, driving the index up towards 7400, before pulling back. The most significant observation is the uptrend support (drawn), which has carried the index higher since the October low. As this stage, there is slightly more bullish than bearish evidence, but with 7600 and all time highs looming large overhead, one wonders where this market could run to, even if the bulls got going.

Brambles (BXB) – I want to break free

Source: Commsec

There is plenty happening on the BXB chart above. First and foremost, we note the resistance just above lucky $13, which the bulls have finally taken out after the best part of 6 months… creating a rounding basing pattern in the process. The recent break higher has been accompanied by increasing volumes, as more and more people have become interested in the stock – thereby driving the price higher.

From here, there are a couple of ways things could go. The RSI is at 80, indicating that the bulls have run hard and that the balance of probabilities lies with a modest pullback. A retest and confirmation of the $13 level would confirm previous resistance as support, and set things up for a high quality trading opportunity. Plenty needs to happen before all of that eventuates however, so one for the watchlist.

Mineral Resource (MIN) – This could be the start of something big

Source: Commsec

I have highlighted MinRes because of the wedge pattern that is forming, most notably since late January. This kind of compression of prices often leads to a sharp break once the pattern is broken. Theory tells us that prices typically break in the direction from which they came, i.e. if the stock was rising on the way into the pattern, they will break higher on the way out. Again, one for the watchlist, but we could see a break higher (and possibly a sharp one) in coming sessions.

ASX corporate actions occurring today:

• Trading ex-div: Downer (DOW) – $0.05, Wisetech Global (WTC) – $0.066, Insignia Financial (IFL) – $0.105, Grange Resources (GRR) – $0.02 

• Dividends paid: GUD Holdings (GUD) – $0.17, JB Hi-Fi (JBH) – $1.97, Codan (CDA) – $0.09, Whitehaven Coal (WHC) – $0.32 

• Listing: None

Economic calendar (AEDT):

• 2:00 pm: Japan Interest Rate Decision

• 6:00 pm: UK GDP

• 12:30 am: Canada Unemployment Rate

• 12:30 am: US Unemployment Rate