Market Wraps

Morning Wrap: Wall Street extends gains as bank jitters ease, Fed meeting in focus, ASX to rise

Wed 22 Mar 23, 8:38am (AEST)

ASX 200 futures are trading 62 points higher, up 0.88% as of 8:20 am AEDT.

US stocks are on a two-day winning streak led by banks, tech and energy stocks, banking woes are beginning to stabilise but there are persistent worries that there's more pain ahead, the market expects the Fed to raise interest rates by 25 bps tomorrow as inflation remains a critical focus, US existing home sales jump 15% month-on-month as mortgage rates ease and a few highlights from JPMorgan's Marko Kolanovic.

Let's dive in.

Overnight Summary

Wed 22 Mar 23, 8:38am (AEDT)

Name Value Chg %
Major Indices
S&P 500 4,003 +1.30%
Dow Jones 32,561 +0.98%
NASDAQ Comp 11,860 +1.58%
Russell 2000 1,778 +1.88%
Country Indices
Canada 19,655 +0.69%
China 3,256 +0.64%
Germany 15,195 +1.75%
Hong Kong 19,259 +1.36%
India 58,075 +0.77%
Japan 26,946 -1.42%
United Kingdom 7,536 +1.79%
Name Value Chg %
Commodities (USD)
Gold 1,943.60 -1.98%
Iron Ore 128.26 -
Copper 4.005 +1.34%
WTI Oil 69.50 +2.75%
AUD/USD 0.6668 0.00%
Bitcoin (AUD) 42,060 -0.36%
Ethereum (AUD) 2,693 +1.88%
US 10 Yr T-bond 3.606 +3.59%
VIX 21 -11.47%

US Sectors

Wed 22 Mar 23, 8:38am (AEDT)

Sector Chg %
Energy +3.45%
Consumer Discretionary +2.71%
Financials +2.54%
Communication Services +2.45%
Materials +1.23%
Industrials +1.13%
Information Technology +0.83%
Health Care +0.59%
Consumer Staples -0.12%
Real Estate -0.66%
Utilities -2.06%


SPX intraday
S&P 500 opens 0.62% higher and rallies intraday to a 1.3% close (Source: TradingView)


  • Major US benchmarks extended gains, led by beaten up banks and energy stocks 

  • US 2-year Treasury yield bounced 19 bps to 4.2% – the 2-year has been more volatile now than after the Lehman bankruptcy

  • Sentiment improved thanks to signs of stabilisation in the banking sector, which may be complicated ahead of the Fed interest rate decision 

  • BofA’s Global Fund Manager Survey shows that investor sentiment is close to the lowest levels in the last 20 years (Bloomberg)

  • Fund managers' biggest fear is now a systemic credit crunch (Bloomberg)

  • Fund managers see rate hikes giving way to cuts, triggering sharp rally (Bloomberg)

  • JPMorgan's Kolanovic sees increasing chance of 'Minsky' moment where a destabilising event forces investors to sell assets to repay loans (Bloomberg)

  • Hedge funds propping up S&P 500 amid bank woes (Bloomberg)


  • Homebuilder stocks outperform as home sales data end record slide (Bloomberg)

  • First Republic (+29.5%) and regional banks rallied after Treasury Secretary Janet Yellen said the government would consider backstopping deposits at more banks 

  • UBS (+12%) shares are up 15.7% in the last two sessions following its agreement over the weekend to buy Credit Suisse for US$3.2 billion  

  • Tesla (+7.8%) rallied after Moody’s upgraded the company to Baa3 rating from its junk-rated credit. The upgrade reflected Tesla’s prudent financial policy and EV leadership


  • US government studies ways to insure all bank deposits if crisis grows (Bloomberg)

  • Wall Street executives discuss other plans for First Republic including converting recent US$30bn deposit influx into capital (Bloomberg, FT)

  • EU vows to respect bondholders' rights after Credit Suisse turmoil (FT)


  • German investor sentiment tumbles on bank concerns (Reuters)

  • Canada February inflation rate slowest in 13 months, down to 5.2% (Reuters)

  • Lower mortgage rates boost US home sales by 14.5% MoM in February (Bloomberg)

  • Central banks confront difficult choice whether to fight inflation or support financial stability (Bloomberg)

  • RBA to consider case for a pause at April's meeting (Bloomberg)

  • China's post-Covid zero consumer boom has yet to materialise (Bloomberg)

Industry ETFs

Wed 22 Mar 23, 8:38am (AEDT)

Description Last Chg %
Lithium & Battery Tech 59.44 +2.52%
Strategic Metals 75.57 +1.79%
Steel 60.24 +1.69%
Uranium 19.22 +0.99%
Copper Miners 36.43 +0.58%
Silver 20.69 -0.73%
Aluminum 47.36 -0.82%
Nickel 30.2249 -1.47%
Gold 183.84 -1.89%
Global Jets 17.53 +2.34%
Aerospace & Defense 112.14 +0.92%
Cannabis 8.9027 +4.46%
Biotechnology 125.85 +0.12%
Description Last Chg %
Bitcoin 17.17 +1.40%
Solar 70.51 +5.06%
CleanTech 14.64 +4.17%
Hydrogen 10.43 +3.84%
FinTech 20.01 +3.50%
Sports Betting/Gaming 15.33 +3.07%
E-commerce 16.84 +2.61%
Electric Vehicles 22.35 +2.28%
Cloud Computing 16.97 +2.24%
Cybersecurity 22.22 +1.94%
Robotics & AI 24.05 +1.91%
Video Games/eSports 49.73 +0.93%
Semiconductor 429.94 +0.20%

Deeper Dive

Hello, Kerry here (it feels like its been a while since I've said that even though I'm here every day). I'm currently working on a little something called Big Drill Hits - A curated list of the most stunning and intriguing intersections made by ASX-listed explorers for key commodities including lithium, gold and copper. I plan to compile these weekly and monthly as well as provide quarterly leaderboards. Would appreciate if you guys could let me know how it reads and whether or not its useful. The first article is here and feel free to reach out via [email protected].

JPMorgan's Marko Kolanovic

A few highlights from Kolanovic's note on Tuesday:

  • On rates: "Banking stress promotes earlier CB pause; ease requires crisis or recession ... recognising these concerns, the ECB dropped its forward guidance this week ... the Fed should substitute its forward guidance statement that "ongoing increases ... will be appropriate" with an indication that a tightening bias persists."

  • On China: "Stronger China and US push 1Q23 global GDP forecast well above trend ... the news pointing to a larger China reopening bounce, the global economy is poised to grow a full percentage point above potential this quarter."

  • On stocks: "Use relief bounces to reduce beta and Value factors further. We stock to our call that Q1 will likely end up the high point for stocks this year. While parts of the market look short-term oversold, and there could be potential relief bounces, we advise sell into these."

  • On bonds: "Bonds continued to rally with curves bull-steepening as ongoing banking sector concerns prompted a repricing of central bank expectations ... we remain neutral on duration, noting historically weak liquidity conditions and light risk appetite."

Sectors to Watch

The S&P 500 has managed to defend December lows while the Nasdaq has powered its way back up to February highs. The US market has remained resilient while the ASX has struggled. The FOMC meeting will take place tomorrow at 5:00 am AEDT and likely to act as another volatile and market moving catalyst.

Building stocks: Building stocks with US exposure like James Hardie (ASX: JHX) and Reliance Worldwide (ASX: RWC) could benefit from the outperformance of US-listed peers after existing home sales surged 14.5% in February compared to consensus expectations of 5.0%.

Energy: Energy was once again the best performing S&P 500 sector, up 3.45%. WTI crude is up almost 5% in the last two sessions, albeit from very oversold conditions.

Gold: Spot prices pulled back sharply overnight, down almost 2% from a peak of US$2,010 to now US$1,940. Gold rallied as much as 11% in the last four sessions on the back of safe haven demand amid continued fears over the global banking crisis. The yellow metal also knows the Fed is in a tough spot. That said, if the Fed chooses to battle inflation over financial stability, then gold might see some headwinds. The overnight weakness could see local gold names cool a little, ahead of tomorrow's FOMC.

Tech: Several risk and growth barometers like the Nasdaq, Bitcoin, ARK and the tech-related ETFs above (FinTech, eCommerce and Cloud) have all bounce strongly in the last 5-6 sessions. Could this see some more positive flow follow through for local tech names, or is this strength only isolated towards US megacaps?

ARKK Innovation ETF (Source: TradingView)

Lithium: Of interest (since there's a lot of eyes on the lithium sector these days). Lithium prices are still falling in China, with battery-grade carbonate prices falling below 300,000 yuan a tonne for the first time since January 2022. Prices have fallen for 37 straight days and down around 50% from November highs. Still, we're seeing some support kick in for lithium stocks, with the Global X Lithium & Battery Tech ETF (weekly chart below) trying to defend its 200-day moving average and trendline.

Global X Lithium & Battery ETF weekly chart (Source: TradingView)

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Service Stream (SSM) – $0.005, Fonterra Shareholders Fund (FSF) – $0.079, Briscoe Group (BGP) – $0.149, Myer (MYR) – $0.08, Seek (SEK) – $0.24, Anglogold (AGG) – $0.043, Supply Network (SNL) – $0.20, Pacific Smiles (PSQ) – $0.003, Genesis Energy (GNE) – $0.08 

  • Dividends paid: Petal (PTL) – $0.013, Sonic Healthcare (SHL) – $0.42, Steadfast Group (SDF) – $0.06, Shine Justice (SHJ) – $0.015, Regal Partners (RPL) – $0.04, Sims (SGM) – $0.14, MA Financial (MAF) – $0.14, Medibank Private (MPL) – $0.063 

  • Listing: None

Economic calendar (AEDT):

  • 6:00 pm: UK Inflation Rate

  • 5:00 am: Fed Interest Rate Decision

  • 5:00 am: FOMC Economic Projections 

  • 5:30 am: Fed Press Conference

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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