Market Wrap

Morning wrap: Wall Street delivers best weekly gain since November 2020, ASX set to rise

Mon 21 Mar 22, 8:12am (AEST)

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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

Mon 21 Mar 22, 8:12am (AEST)

Name Value Chg %
US Indices
S&P 500 4463.12 +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 1,921.50 -1.12%
Iron Ore 150.59 -
Copper 4.716 +0.30%
WTI Oil 105.10 +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 24 -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

Monday, 21 March 2022

Sector Chg %
Communication Services +1.44%
Consumer Discretionary +2.18%
Consumer Staples +0.27%
Energy +0.09%
Financials +0.29%
Health Care +0.65%
Sector Chg %
Industrials +0.40%
Information Technology +2.19%
Materials +0.60%
Real Estate +0.21%
Utilities -0.90%

Industry ETFs

Monday, 21 March 2022

Description Last Chg %
Commodities
Aluminum 71.59 +0.71%
Copper Miners 43.32 +1.36%
Gold 180.89 -0.92%
Lithium & Battery Tech 73.07 +1.83%
Nickel 39.01 -3.77%
Strategic Metals 104.85 +3.81%
Steel 64.23 +0.81%
Silver 23.33 -1.33%
Uranium 25.61 +0.16%
Industrials
Aerospace & Defense 108.56 +0.71%
Global Jets 20.31 +1.48%
Healthcare
Biotechnology 128.62 +1.84%
Cannabis 4.83 +2.90%
Description Last Chg %
Cryptocurrency
Bitcoin 25.65 +3.04%
Renewables
CleanTech 16.19 +2.35%
Hydrogen 18.9 +1.38%
Solar 75.18 +1.14%
Technology
Cloud Computing 20.52 +3.56%
Cybersecurity 29.61 +2.87%
E-commerce 21.86 +3.80%
Electric Vehicles 26.25 +2.25%
FinTech 31.25 +3.90%
Robotics & AI 28.75 +2.82%
Semiconductor 465.15 +1.95%
Sports Betting/Gaming 20.35 +2.41%
Video Games/eSports 57.29 +3.11%

ASX Sectors to watch

#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.

Today's 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

 

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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