Market Wrap

Morning wrap: Wall Street bounces against all odds, iron ore plunges, ASX set to fall

Tue 26 Apr 22, 8:25am (AEST)

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ASX Futures (SPI 200) imply the ASX will open 25 points lower, down -0.34%.

The local sharemarket will have a lot of news to digest after being closed on Monday for Anzac day. Major US indices plunged last Friday as the US Federal Reserve signalled its plans to front-load interest rate hikes to combat inflation, Wall Street staged a massive against-all-odds rebound overnight, China’s stock market is in freefall, Macron won the French election and iron ore is on thin ice.  

Let’s dive in.

Overnight summary

Mon 25 Apr 22, 10:25pm (AEST)

Name Value Chg %
US Indices
S&P 500 4296.12 +0.57%
Dow Jones 34,049 +0.70%
NASDAQ Comp 13,005 +1.29%
Russell 2000 1,954 +0.70%
Country Indices
Canada 21,012 -0.82%
China 2,929 -5.13%
Germany 13,924 -1.54%
Hong Kong 19,869 -3.73%
India 56,580 -1.08%
Japan 26,591 -1.90%
United Kingdom 7,381 -1.88%
Name Value Chg %
Commodities (USD)
Gold 1,900.60 +0.24%
Iron Ore 152.47 -
Copper 4.481 +0.71%
WTI Oil 98.63 +0.09%
AUD/USD 0.7180 +0.07%
Bitcoin (AUD) 55,968 +0.55%
Ethereum (AUD) 4,187 +1.40%
US 10 Yr T-bond 2.826 -2.75%
VIX 27 -4.22%


  • Major US indices experienced a massive decline last Friday after Fed Chair Jerome Powell added his support for more aggressive interest rate hikes

    • Dow Jones -2.82%

    • S&P 500 -2.77%

    • Nasdaq -2.55%

  • All three major indices managed to stage an epic reversal overnight, possibly due to: 

    • Expectations of a robust earnings season

    • A technical bounce from oversold levels

    • Bouncing off resistance levels and/or March lows

    • Lack of liquidity

  • Tech stocks posted strong gains after Twitter's board agreed to sell the company to Elon Musk in a deal valued at almost US$44bn

  • China’s covid situation continues to worsen, as Beijing is now testing millions of residents and implementing lockdowns. China’s CSI 300 slumped -4.9%, its lowest close since April 2020

  • 7 out of 11 US sectors were green

  • Tech, discretionary and healthcare outperformed

  • Materials, real estate, utilities and energy stocks underperformed

  • As of last Friday, 99 companies in the S&P 500 had reported first quarter earnings. 77.8% of them have beat market expectations, according to Refinitiv

  • 51% of US stocks advanced

  • 66% of US stocks trade below their 200-day moving average (65% last Friday, 63% a week ago)

    • This indicates that market breadth is poor and price charts are beginning to plateau/downtrend 

  • 175 S&P 500 companies are due to report first quarter earnings this week (companies report both before and after market close) 

    • Mon: Coca Cola, Philips, Activision Blizzard

    • Tue: GE, Microsoft, Alphabet, Visa, GM

    • Wed: Spotify, T-Mobile, Meta, PayPal, Ford, Boeing

    • Thurs: Twitter, Mastercard, McDonalds, Amazon, Intel, Apple

    • Fri: ExxonMobil, AstraZeneca, Chevron


  • It's a massive week for economic data, most notably quarterly GDP growth rates from most European countries and the US


  • Iron ore plunged after a spike in covid cases in Beijing

  • Oil slid on China concerns

  • Gold sold off as an even more hawkish Fed weighed on inflows


US Sectors

Mon 25 Apr 22, 10:25pm (AEST)

Sector Chg %
Communication Services +1.53%
Consumer Discretionary +0.78%
Consumer Staples +0.41%
Energy -3.34%
Financials +0.16%
Health Care +0.66%
Sector Chg %
Industrials 0.00%
Information Technology +1.44%
Materials -0.29%
Real Estate -0.48%
Utilities -0.72%

Industry ETFs

Mon 25 Apr 22, 10:25pm (AEST)

Description Last Chg %
Aluminum 67.8744 -4.68%
Copper Miners 41 -1.88%
Gold 180.29 -1.80%
Lithium & Battery Tech 67.26 -3.57%
Nickel 43.96 -1.39%
Strategic Metals 98.29 -3.12%
Steel 64.58 -2.82%
Silver 22.31 -2.15%
Uranium 24.45 -2.62%
Aerospace & Defense 108.31 -0.62%
Global Jets 22.35 -0.45%
Biotechnology 123.04 +0.93%
Cannabis 4.26 -0.23%
Description Last Chg %
Bitcoin 24.63 +1.91%
CleanTech 14.32 -0.42%
Hydrogen 16.3 +1.17%
Solar 64.5 -0.82%
Cloud Computing 19.87 +2.01%
Cybersecurity 29.94 +2.47%
E-commerce 19.41 +2.11%
Electric Vehicles 24.46 +0.45%
FinTech 27.54 +1.31%
Robotics & AI 24.79 +0.52%
Semiconductor 410.55 +1.69%
Sports Betting/Gaming 17.54 +1.14%
Video Games/eSports 50.86 +1.10%

ASX Sectors to watch

#1 Iron ore 

Iron ore has broke below the symbolic US$150 a tonne level as covid has now spread to Beijing after crippling the financial hub of Shanghai.

According to Fastmarkets, benchmark iron ore prices were trading around US$136/t on Monday, down -9%.

The US-listed counterparts of BHP (ASX: BHP) and Rio Tinto (ASX: RIO) have declined -10.6% and -8.2% in the last two sessions. This could flag a very challenging session for local majors on Tuesday.

#2 Energy

Energy was the worst performing sector on Wall Street overnight as China concerns weighed.

USOIL 2022-04-26 08-19-15
Source: TradingView

"The hit from Chinese lockdowns is over a million barrels a day and the testing of 12 districts over the next five days will determine the next major move for crude prices," said Oanda senior market analyst, Ed Moya.

"The oil market could easily become very tight if China shows they are close to reversing their stance on lockdowns, but right now that doesn’t seem to be happening anytime soon."

#3 Lithium 

The Rare Earth/Strategic Metals ETF has rapidly deteriorated as risk appetite is struggling to rebound across commodity-related stocks.

REMX 2022-04-26 07-55-00
Source: TradingView, Annotations by Market Index

Things are not looking pretty for the ETF:

  • Down -25% since 4 April

  • Sliced through the 200-day (blue)

  • Gapped below the high $90s support area (red band)

Chinese lithium carbonate prices were trading at around 465,000 yuan a tonne on Monday, down from a record high of 502,500 yuan earlier this month.

The broad-based weakness across the resources sector and freefalling ETF could flag a difficult open for local lithium names.

#4 Copper

Copper is another commodity that went from breaking out to breaking down.

The Global X Copper Mines ETF was trying to push a fresh 10-year high earlier this month, but now down -6.7% in the last two sessions. Over the same time period, copper spot prices declined -5.4% to a near 2-month low of US$4.45/lb.

COPX 2022-04-26 08-05-11
Source: TradingView, Annotations by Market Index

What's interesting is that the Copper ETF experienced its highest ever volume since listing in 2010. Clearly someone is buying the dip.

Nevertheless, the broad-based weakness in commodities, sharp pullback for spot prices and China concerns could flag a weak session for local miners.

#5 Uranium

Uranium is another risk-commodity experiencing a sharp pullback.

Uranium spot prices have fallen almost -10% in the past few days, down to US$54.13/lb, according to fuel brokers UxC.

URA 2022-04-26 08-17-54
Source: TradingView

The Global X Uranium ETF managed to close above session lows and above the key 200-day moving average.

Regardless, the ETF is down -6.4% in the past two sessions. As local uranium stocks fell sharply last Friday, it will be interesting to see if they will continue to decline or stabilise.

Today's events

ASX corporate actions occurring today:

  • Ex-dividend: None today

  • Dividends paid: ADA, DVR, PGC, VTS

  • Listing: HAL, LPM


Written By

Kerry Sun

Finance Writer & Social Media

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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