Morning wrap: Wall Street delivers best weekly gain since November 2020, ASX set to rise
ASX Futures (SPI 200) imply the ASX will open 45 points higher, up 0.61%
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ASX Futures (SPI 200) imply the ASX will open 45 points higher, up 0.61%.
Wall Street extended its gains for a fourth-consecutive session as investors digested comments from hawkish Federal Reserve officials and assessed the Russia-Ukraine developments.
Let’s dive in.
Overnight Summary
Name | Value | % Chg |
|---|---|---|
US Indices | ||
 S&P 500 | 4,463 | +1.17% |
Dow Jones | 34,755 | +0.80% |
NASDAQ Comp | 13,894 | +2.05% |
Russell 2000 | 2,086 | +1.02% |
Country Indices | ||
 Canada | 21,818 | +0.22% |
 China | 3,251 | +1.12% |
 Germany | 14,413 | +0.17% |
 Hong Kong | 21,412 | -0.41% |
 India | 57,864 | +1.84% |
 Japan | 26,827 | +0.65% |
 United Kingdom | 7,405 | +0.26% |
Name | Value | % Chg |
|---|---|---|
Commodities (USD) | ||
 Gold | 1,921.5 | -1.12% |
 Iron Ore | 150.59 | +0.63% |
 Copper | 4.716 | +0.30% |
 WTI Oil | 105.1 | +2.06% |
Currency | ||
 AUD/USD | 0.7396 | -0.24% |
Cryptocurrency | ||
 Bitcoin (AUD) | 55,627 | -2.93% |
 Ethereum (AUD) | 3,867 | -3.66% |
Miscellaneous | ||
U.S. 10 Year Treasury | 2.148 | -2.01% |
VIX | 23.87 | -7.01% |
Stocks
The green days continue to stack against all odds. In the past four trading sessions:
Dow Jones (blue chip) +5.5%
S&P 500 (large cap) +6.95%
Nasdaq (tech) +10.4%
The most hawkish Fed member, James Bullard, recommended a much more aggressive approach to fighting inflation, suggesting half-point rate increases and raising interest rates to above 3% this year
President Joe Biden warned Chinese President Xi Jinping that China will face “consequences” if they provide material support to Russia
Technology and consumer discretionary sectors gained more than 2%
Utilities was the only sector to close in negative territory
63% of US stocks advanced
60% of US stocks trade below their 200-day moving average (61% on Thursday, 66% a week ago)
FedEx shares fell -4% after slightly missing quarter earnings, weighed by labour shortages from the omicron outbreak
Moderna shares rallied 6.3% after requesting the US Food and Drug Administration to authorise a fourth booster shot for all adults
Economy
This week is stacked with economic data including:
US: new home sales, durable goods, flash PMI and consumer sentiment readings
EU: PMIs and appearances from ECB policymakers
UK: CPI inflation, PMIs and retail sales
Aus: Governor Lowe speaks on Tuesday
Eyes on how consumer, manufacturing and services data will hold up amid widespread pricing pressures
Commodities
Iron ore prices rose after the Chinese government announced a more positive outlook for the economy and vowed to support its all-important property sector
Oil prices are stabilising above US$100 a barrel as investors wait to see if any progress in peace talks between Ukraine and Russia
Gold prices declined as a risk-on sentiment returns
US Sectors
Sector | % Chg |
|---|---|
| Information Technology | +2.19% |
| Consumer Discretionary | +2.18% |
| Communication Services | +1.44% |
| Health Care | +0.65% |
| Materials | +0.60% |
| Industrials | +0.40% |
Sector | % Chg |
|---|---|
| Financials | +0.29% |
| Consumer Staples | +0.27% |
| Real Estate | +0.21% |
| Energy | +0.09% |
| Utilities | -0.90% |
Industry ETFs
Name | Value | % Chg |
|---|---|---|
Commodities | ||
| Strategic Metals | 104.85 | +3.81% |
| Lithium & Battery Tech | 73.07 | +1.83% |
| Copper Miners | 43.32 | +1.36% |
| Steel | 64.23 | +0.81% |
| Aluminum | 71.59 | +0.71% |
| Uranium | 25.61 | +0.16% |
| Gold | 180.89 | -0.92% |
| Silver | 23.33 | -1.33% |
| Nickel | 39.01 | -3.77% |
Industrials | ||
| Global Jets | 20.31 | +1.48% |
| Aerospace & Defense | 108.56 | +0.71% |
Healthcare | ||
| Cannabis | 4.83 | +2.90% |
| Biotechnology | 128.62 | +1.84% |
Name | Value | % Chg |
|---|---|---|
Cryptocurrency | ||
| Bitcoin | 25.65 | +3.04% |
Renewables | ||
| CleanTech | 16.19 | +2.35% |
| Hydrogen | 18.9 | +1.38% |
| Solar | 75.18 | +1.14% |
Technology | ||
| FinTech | 31.25 | +3.90% |
| E-commerce | 21.86 | +3.80% |
| Cloud Computing | 20.52 | +3.56% |
| Video Games/eSports | 57.29 | +3.11% |
| Cybersecurity | 29.61 | +2.87% |
| Robotics & AI | 28.75 | +2.82% |
| Sports Betting/Gaming | 20.35 | +2.41% |
| Electric Vehicles | 26.25 | +2.25% |
| Semiconductor | 465.15 | +1.95% |
ASX Morning Brief
#1 Tech
The tech sector continues to headline the comeback after being oversold for far too long.
In terms of ETFs last Friday:
FinTech +3.9%
eCommerce +3.8%
Cloud 3.56%
Notable overnight winners include:
Affirm +10.8%
Block +9.9%
Nvidia +6.8%
PayPal +5.9%
Etsy +4.5%
This could see more positive flow follow through for ASX tech stocks.
Local Block (ASX: SQ2) shares will follow its US-listed counterpart and have a strong open, which could also buoy the broader BNPL sector.
Cloud and eCommerce ETFs also gained, which could support local names including:
#2 Lithium
The Rare Earth/Strategic Metals ETF rallied 3.8% on Friday.
Lithium prices continue to mark fresh all-time highs, with lithium carbonate prices up more than 75% in 2022.
Several local lithium stocks are beginning to breakout after a 3-6 months of trading sideways.
See a full list of ASX lithium stocks here.
#3 Energy
The US Energy sector was the second worst performing sector on Friday, up just 0.09%.
“Oil will remain a volatile trade in both directions, but the geopolitical risks don’t seem like they will be going away anytime soon, so $100 oil is likely here to stay,” said Oanda senior market analyst, Ed Moya.
“Oil seems like it still might head higher even if we see some demand destruction over the next couple of months. The oil market is still too tight and the likelihood of the US gaining Chinese support in making life harder for Russia seems less likely.”
Economic data from several countries this week could be telling if consumer demand is able to stand tall amid surging prices.
Key Events
ASX corporate actions occurring today:
Ex-dividend: ADH, AHX, KSC, NWH, PGC
Dividends paid: CIN, HSN
Listing: None today
Issued shares: AEE, AUH, CNU, EL8, EQT, FBU, HCD, HPC, HTG, IMA, LIT, MGF, NAB, OCL, PEK, PG1, PIC, PNI, PRM, RFX, RLG, SGH, SHP, SPL, SZL, WGX, WOW, WTL
Other things of interest (AEDT):
European Central Bank speech at 6:30 pm
US Fed Chair Powell speech at 3:00 am, Tuesday
