Market Wraps

Morning Wrap: Wall St extends gains, Snap shares crash, ASX set to open higher

Fri 22 Jul 22, 8:40am (AEDT)

ASX Futures (SPI 200) imply the ASX 200 will open 12 points higher, up 0.18%.

Wall Street is on a three-day winning streak, Tesla shares rally on better-than-expected earnings, Musk says lithium prices are ‘insane’, Snapchat pulls media stocks lower in extended trading and a busy night for central banks.

Let’s dive in.

Overnight Summary

Fri 22 Jul 22, 8:40am (AEDT)

Name Value Chg %
Major Indices
S&P 500 3,999 +0.99%
Dow Jones 32,037 +0.51%
NASDAQ Comp 12,060 +1.36%
Russell 2000 1,837 +0.48%
Country Indices
Canada 19,063 +0.22%
China 3,272 -0.99%
Germany 13,247 -0.27%
Hong Kong 20,575 -1.51%
India 55,682 +0.51%
Japan 27,803 +0.44%
United Kingdom 7,271 +0.09%
Name Value Chg %
Commodities (USD)
Gold 1,717.00 +0.21%
Iron Ore 105.27 -
Copper 3.31 +0.33%
WTI Oil 96.60 +0.26%
AUD/USD 0.6934 -0.03%
Bitcoin (AUD) 33,328 -2.65%
Ethereum (AUD) 2,274 +1.28%
US 10 Yr T-bond 2.91 -4.15%
VIX 23 -3.22%


Major US benchmarks rallied to six week highs as the overall health of corporate earnings remains intact. Around 90 S&P 500 companies have reported second quarter earnings, and of those, approximately 71% have beaten expectations, according to FactSet.

It’s worth noting that Snapchat shares are down more than -26% in after hours following a miss on earnings expectations. This has dragged media stocks including Meta, Alphabet and Twitter lower in extended trading. 

  • 9 out of 11 US sectors were higher

  • Discretionary, Healthcare, Tech and Materials outperformed

  • Communication Services and Energy were the only red sectors

  • 58% of US stocks advanced

  • 68% of US stocks trade below their 200-day moving average (69% on Thursday, 76% a week ago)


  • Tesla (+9.8%) shares rallied after the EV manufacturer beat Wall Street expectations. Tesla earnings of $2.27 per share was ahead of the expected $1.81 per share. Some interesting comments from Elon Musk include: 

    • “The reason we sold a bunch of our bitcoin holdings was that we were uncertain as to when the covid lockdowns in China would alleviate so it was important for us to maximise our cash position.”

    • “This should be not taken as some verdict on Bitcoin.”

    • “The processing of lithium is insane.”

    • “I think inflation will decline towards the end of this year.”

  • Snapchat (+5.5%, after hours: -26.4%) missed second quarter revenue expectations as high inflation and rising competition from rival apps like TikTok hurt advertising demand. Revenue increased 13% year-on-year, below analyst expectations of 16%

  • AT&T (-7.6%) quarterly earnings were in-line with analyst expectations. The telco downgraded its free cashflow guidance for the full year amid delays in customer phone payments

    • “There’s clearly some dynamics in the economy. We have customers that are stretching out their payments a little bit,” CEO John Stankey told CNBC

  • United Airlines (-10.2%) posted its first quarterly profit (US$329m) since the pandemic began. The airline expects capacity to be 85-90% compared to 2019 for the remaining two quarters of the year. The stock tumbled amid plans to scale back growth plans in 2023


US corporate earnings we’re watching this week:

  • Friday: Snapchat, Verizon, American Express, Twitter, Verizon 

US corporate earnings we’re watching next week:

  • Monday: Philips

  • Tuesday: 3M, Coca-Cola, General Electric, McDonald's, Alphabet, Microsoft, Visa

  • Wednesday: Boeing, Kraft Heinz, Shopify, Etsy, Ford, Meta Platforms, Qualcomm

  • Thursday: Amazon, Apple, Intel, Roku

  • Friday: Chevron, Exxon Mobil, Procter & Gamble


  • Turkey left interest rates unchanged at 14.0%, in-line with expectations

    • Turkish inflation accelerated to 79% in June, the fastest rate among major emerging markets and developed economies

  • Europe raised interest rates by 50 bps, above economist expectations of a 25 bps hike

    • Rates in the Eurozone have been negative since 2014 in an attempt to boost the region’s sluggish growth

    • The European Central Bank said further rate hikes “will be appropriate” and take it “meeting-by-meeting” 

  • South Africa raised interest rates by 75 bps to 5.5%, above expectations of a 50 bps hike 

  • US weekly jobless claims rose to 251,000 for the week ended July 16

    • The highest reading for the number of Americans filing for first-time unemployment benefits since November 2021


  • Iron ore futures fell -0.7% to US$103.4 a tonne. Evergrande’s suppliers have joined in on the ‘mortgage strike’, deepening China's property sector concerns

  • Oil prices tumbled overnight as investors reassess a rather disappointing summer driving season (northern hemisphere) and weakening global economic data

  • Gold prices rose after the ECB and South African bank delivered larger-than-expected rate hikes, taking some heat out of the US dollar


US Sectors

Fri 22 Jul 22, 8:40am (AEDT)

Sector Chg %
Consumer Discretionary +2.25%
Health Care +1.51%
Information Technology +1.41%
Materials +1.40%
Real Estate +1.01%
Industrials +0.68%
Financials +0.64%
Consumer Staples +0.36%
Utilities +0.29%
Communication Services -0.21%
Energy -1.69%

Industry ETFs

Fri 22 Jul 22, 8:40am (AEDT)

Description Last Chg %
Strategic Metals 85.35 +2.59%
Nickel 28.3 +1.66%
Lithium & Battery Tech 72.1 +1.64%
Steel 49.52 +1.47%
Gold 158.04 +1.41%
Silver 17.19 +1.22%
Copper Miners 28.24 +0.07%
Aluminum 51.3621 -1.07%
Uranium 20.27 -1.68%
Aerospace & Defense 100.49 +0.27%
Global Jets 18 -2.72%
Biotechnology 123.94 +0.94%
Cannabis 18.56 -0.89%
Description Last Chg %
Bitcoin 14.64 -1.71%
Hydrogen 13.21 +1.21%
CleanTech 14.22 +0.42%
Solar 73.35 -0.31%
Cloud Computing 17.56 +2.39%
Robotics & AI 21.95 +1.91%
Cybersecurity 26.64 +1.80%
Video Games/eSports 49.81 +1.73%
E-commerce 17.7 +1.64%
Semiconductor 394.2 +1.63%
Sports Betting/Gaming 15.07 +1.53%
Electric Vehicles 22.96 +1.48%
FinTech 23.8 +1.34%

ASX Morning Brief

#1 Tech

Of course Snapchat posts some crappy second quarter earnings and pulls several heavyweight US tech stocks lower in extended trading. Nasdaq future are currently down -0.7%.

Snap is the first major US tech company to report earnings. As Reuters puts it, "the results could be a bellwether of conditions also affecting Facebook owner Meta Platforms, which reports results next week and Twitter, which reports on Friday."

This could act as a potential drag on local tech stocks on Friday.

It's a crucial day for the S&P/ASX 200 Info Tech Index as it tests the upper bound of its downward trading range (black) and 100-day moving average (yellow).

ASX 200 Info Tech Index chart
S&P/ASX 200 Info Tech Index Chart (Source: TradingView, Annotations by Market Index)

#2 Lithium

The VanEck Rare Earth/Strategic Metals ETF was the best performing ETF among the ones we track.

The ETF holds mostly Chinese and ASX-listed rare earth, cobalt and lithium stocks, including Lynas, Pilbara Minerals and Allkem. You can read more about the ETF here.

Overnight developments for the lithium sector include:

  • Ford and Rio Tinto (ASX: RIO) sign a non-binding MoU to jointly develop more sustainable and secure supply chains for battery materials

  • Ford signs deal with Ioneer (ASX: INR) for 7,000 tonnes of lithium carbonate per annum from 2025

  • Tesla earnings expect "50% average annual growth in vehicle deliveries" over a "multi-year horizon"

Most lithium charts are starting to stabilise and rally to 4-6 week highs after a 20-50% correction in recent months.

#3 Travel

Local travel stocks could see some negative flow after downbeat earnings from United Airlines and American Airlines. One missed earnings expectations, the other scaled back growth plans.

#4 Energy

Oil stocks are on the backfoot as Brent crude prices fell -2.5% overnight to US$103.85 a barrel (but well above session lows of -4.6% to US$101.5).

"The market is still extremely tight and recessions are not the base case at the moment. Faster tightening will increase the odds but we’re not there. These dips will create hope but I don’t think we should get used to double-digit oil prices yet," said Oanda senior market analyst, Craig Erlam.

Key Events

ASX corporate actions occurring today:

  • Ex-dividend: UWL

  • Dividends paid: PE1, PGG, VTS

  • Listing: None

  • Issued shares: AL3, AS2, BMT, BRX, CE1, COB, EGG, FPH, GCX, HYD, LER, LGP, MEA, NAB, NBI, OCL, PRU, R3D, SKS, SUH, TYR

Other things of interest (AEST): 

  • Japan Inflation Rate (June) at 9:30 am

  • UK Retail Sales (June) at 4:00 pm

  • Russia Interest Rate Decision at 8:30 pm

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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