ASX Futures (SPI 200) imply the ASX will open 99 points lower, down -1.4%.
Stock market carnage continues after another massive selloff on Wall St, worries about China's economy mount, cryptocurrencies are getting dumped, commodity prices join in on the selloff and Ford plans to sell 8m shares in EV start-up Rivian.
Let's dive in.
Tue 10 May 22, 8:22am (AEST)
|US 10 Yr T-bond||3.079||-1.41%|
Major US indices are trading at their lowest point in more than a year
The S&P 500 is down -16% from its high in early January, the largest decline since the March 2020 selloff and longest correction since 2016
Cryptocurrency and Bitcoin prices are down at least -7.7% as investors flee from speculative assets
The 40-day correlation between Bitcoin and the Nasdaq is now at a record 84%. These two assets are now moving hand-in-hand
The VIX - Wall Street's fear gauge - spiked to a 2 month high
The previous high on 8 March was triggered by Russia's invasion of Ukraine
10 out of 11 US sectors were red
Energy, real estate, discretionary and tech were the most hard hit
Consumer staples was the only green sector
78% of US stocks declined
75% of US stocks trade below their 200-day moving average (71% on Monday, 71% a week ago)
AMC Entertainment (-9%, after hours: +3.9%) posted a narrower-than-expected loss of -US$337.4m compared to -US$567m a year ago. Revenue was bolstered by movies like 'The Batman' and 'Spiderman: No Way Home'
Rivian (-20.9%) shares continue to deflate after Ford announced plans to sell 8m of its holdings. The EV start-up has shed -78% of its valuation in 2022
Upstart (-8%, after hours: -43%) is getting smashed after providing a disappointing full year guidance. The tech-lending firm beat Q1 forecasts, with revenue up 156% to US$310.4m
Chinese exports rose 3.9% in April, the weakest growth in almost two years
The reading was slightly better than analyst expectations of 3.2%
March exports grew 14.7%
China’s trade sector, which accounts for around a third of GDP, stalled as lockdowns crippled supply chains in major hubs like Shanghai
Iron ore futures -4.7% to US$131.99 a tonne, buying interest for cargoes in June waned in response to the loss in value of the Chinese yuan against the US dollar, sources told Fastmarkets
Oil prices dipped in-line with broad-based selloff and fears of demand destruction given China’s covid situation
Gold struggled for upside as investors dumped stocks and favoured safe havens like the US dollar and bonds
Tuesday, 10 May 2022
Tuesday, 10 May 2022
|Lithium & Battery Tech||66.94||-5.78%|
|Aerospace & Defense||103.2||-4.44%|
|Robotics & AI||23.22||-5.38%|
There's no point in discussing 'Sectors to watch' as everything is likely to continue to sell off.
Earlier this month, I covered the Fed's plans to reign in its US$9tn balance sheet. A massive pullback in liquidity could be another compounding factor behind the market's ongoing correction.
This chart from US trader Mark Minervini - which has made a number of appearances in Morning Wraps - has really resonated with me
Minervini said current conditions suggest a "long term top and years of subsequent underperformance."
"At some point, you will get a powerful rally in the beaten down names. But subsequent to oversold bounces and counter trend rallies, the leaders of the past are going to underperform. It's time to look for new market leadership, perhaps it will emerge in the small & mid caps."
There's a lot of data out there that suggests we have yet to hit a bottom. We'll try to cover these views throughout the day.
It's absolute carnage out there. Stay safe.
ASX corporate actions occurring today:
Dividends paid: DUR, NBI
Issued shares: AQI, AQX, AVH, AZL, BNZ, BRK, COD, CXM, FAU, FGR, FLT, FXG, GLN, GOR, GRE, HXG, ICN, KIL, KNB, LKE, LRS, MCT, MFG, MOT, MQR, MXT, PFT, QXR, RSH, SPN, SZL, TGM, TPD, UBI, WIN, ZIP
Other things of interest (AEST):
RBA Meeting Minutes at 11:30 am
US Retail Sales (Apr) at 10:30 pm
US Industrial Production (Apr) at 11:15 pm
Finance Writer & Social Media
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