Market Wraps

Morning Wrap: Wall Street rallies, Netflix loses 1m subscribers, ASX set to surge

Wed 20 Jul 22, 8:38am (AEST)

ASX Futures (SPI 200) imply the ASX 200 will open 79 points higher, up 1.2%.

Wall Street rallied after fund managers hit “record pessimism”, Netflix lost 1m subscribers in the second quarter and US corporate earnings are beating expectations but also getting smashed by the strong dollar.

Let’s dive in.

Overnight Summary

Wed 20 Jul 22, 8:38am (AEST)

Name Value Chg %
Major Indices
S&P 500 3,937 +2.76%
Dow Jones 31,827 +2.43%
NASDAQ Comp 11,713 +3.11%
Russell 2000 1,799 +3.50%
Country Indices
Canada 18,938 +1.84%
China 3,279 +0.04%
Germany 13,308 +2.69%
Hong Kong 20,661 -0.89%
India 54,768 +0.45%
Japan 26,962 +0.65%
United Kingdom 7,296 +1.01%
Name Value Chg %
Commodities (USD)
Gold 1,709.60 -0.06%
Iron Ore 104.76 -
Copper 3.295 +0.12%
WTI Oil 104.22 0.00%
AUD/USD 0.6898 +0.08%
Bitcoin (AUD) 34,140 +8.06%
Ethereum (AUD) 2,283 +5.36%
US 10 Yr T-bond 3.019 +1.99%
VIX 25 -3.16%


Major US benchmarks rallied on the back of better-than-expected earnings from key companies.

A Bank of America fund manager survey showed a “dire level of investor pessimism” and “full capitulation” of sentiment, paving the way for a contrarian view that the bottom is in. The survey showed global growth optimism, profit optimism and equity allocations were at lowest levels since 2008, if not all-time lows.

  • All 11 US sectors were higher

  • Most sectors rallied more than 3%

  • Real Estate, Healthcare, Staples and Utilities underperformed benchmarks

  • 81% of US stocks advanced

  • 70% of US stocks trade below their 200-day moving average (74% on Tuesday, 75% a week ago)


  • Boeing (+5.7%) announced several new orders for 787 Dreamliners and 737 Max jets

  • Netflix (+5.6%, after hours: +7.9%) shares rallied after a better-than-feared second quarter result. The streaming platform lost nearly 1m subscribers, far short of the 2m it had originally forecast during its first quarter report in April

  • Hasbro (+0.7%) beat quarterly profit expectations thanks to strong demand for card games such as “Magic: The Gathering”, “Wizard’s of the Coast” and “Dungeons & Dragons” 

  • Johnson & Johnson (-1.5%) beat second quarter earnings expectations but downgraded its full-year profit outlook due to the strong US dollar. Almost half of the company's sales come from outside the United States

  • IBM (-5.3%) earnings beat Wall Street expectations, supported by growth in both software and infrastructure divisions. Shares in the tech company slumped on warnings of a potential US$3.5bn hit from a strong US dollar


US corporate earnings we’re watching this week:

  • Wednesday: Netflix, Nasdaq

  • Thursday: Tesla, AT&T, American Airlines, Domino’s Pizza

  • Friday: Snapchat, Verizon, American Express, Twitter, Verizon 


  • Eurozone inflation surged to 8.6% year-on-year in June, from 8.1% in May

    • The reading was in-line with consensus expectations

    • Core inflation, which excludes volatile food and energy prices, slowed to 3.7% from 3.8% a month earlier 

    • The biggest contribution to inflation came from energy, followed by food, alcohol and tobacco, services and non-energy industrial goods

  • US housing starts fell to 1.56m in June, down from 1.59m in May

    • Below consensus expectations of 1.58m

    • Weakest levels since September 2021


  • Iron ore futures erased early gains, down -2.1% to US$103.1  on Tuesday. China has set up a giant mineral resources group in a long-awaited move that is expected to give the country a bigger say in iron ore pricing

  • Oil prices briefly tumbled after a Bank of America fund manager survey showed global growth optimism was at an all-time low. Still, the supply side remains extremely tight and prices were quick to rebound

  • Gold prices continue to hover around US$1,700 


US Sectors

Wed 20 Jul 22, 8:38am (AEST)

Sector Chg %
Communication Services +3.63%
Industrials +3.58%
Energy +3.16%
Materials +3.11%
Consumer Discretionary +3.09%
Information Technology +3.08%
Financials +3.07%
Real Estate +2.84%
Health Care +1.80%
Consumer Staples +1.08%
Utilities +0.68%

Industry ETFs

Wed 20 Jul 22, 8:38am (AEST)

Description Last Chg %
Uranium 19.14 +4.18%
Steel 48.31 +2.65%
Strategic Metals 82.29 +2.49%
Copper Miners 27.83 +2.08%
Lithium & Battery Tech 71.47 +0.76%
Silver 17.22 +0.41%
Gold 159.16 +0.24%
Nickel 27.431 -0.82%
Aluminum 49.1252 -2.34%
Global Jets 17.2 +4.13%
Aerospace & Defense 95.75 +3.60%
Biotechnology 120.52 +2.57%
Cannabis 17 +0.77%
Description Last Chg %
Bitcoin 13.37 +8.53%
Hydrogen 12.75 +3.22%
CleanTech 13.64 +2.64%
Solar 71.37 +1.74%
Semiconductor 368.17 +4.41%
FinTech 22.23 +3.91%
Robotics & AI 20.57 +3.55%
Electric Vehicles 21.89 +3.43%
E-commerce 16.8 +3.15%
Sports Betting/Gaming 14.36 +2.86%
Cloud Computing 16.28 +2.70%
Video Games/eSports 47.67 +2.08%
Cybersecurity 25.62 +1.80%

ASX Morning Brief

They call it 'Turnaround Tuesday' for a reason. Wall Street is about to handball us a very strong session.

Taking a quick look at the S&P 500, it's about to have another crack at the 50-day moving average (green). The S&P 500 has not traded above the 50-day since March 20.

Before investors get too optimistic and FOMO, it might be a good time to reflect what's happened with the S&P 500 so far this year.



4 Jan to 24 Jan


24 Jan to 9 Feb


9 Feb to 24 Feb


24 Feb to 29 Mar


29 Mar to 20 May


20 May to 2 June


2 June to 17 June



2022-07-20 08 02 33-Window
S&P 500 (Source: TradingView)

The current 'bear market rally' is up 8.3% from 17 June lows.

Just some food for thought. On to some ASX sectors to watch.

#1 Tech

The Nasdaq is trying to breakout of its wedge, it needs another positive day to confirm its break out.

2022-07-20 08 13 53-NDX 2022-07-20 08-13-48.png ‎- Photos
Nasdaq 100 (Source: TradingView)

Overnight, beaten up tech names rallied the hardest, including:

  • Affirm +9.2%

  • Netflix +5.6%

  • Meta +5.1%

  • PayPal +4.9%

  • Block +4.5%

High flying SPI futures and the risk-on attitude should see some positive flows for local tech names.

#2 Uranium

The Global X Uranium ETF rallied 4.2%. The move appears to be driven more by broader market strength and improved appetite for risk assets.

Uranium spot prices remain mostly unchanged around US$46/lb.

Still, a good precursor for local uranium names.

#3 Travel

Recession risks and new covid variants has kept the pent-up travel demand narrative at bay.

The US Jets ETF rallied 4.1% to a 1-month high. The ETF holds mostly US airlines and some small exposure to international carriers including Qantas (ASX: QAN).

2022-07-20 08 25 38-JETS 2022-07-20 08-25-33.png ‎- Photos
US Jets ETF (Source: TradingView, Annotations by Market Index)

#4 Iron Ore

US-listed BHP (ASX: BHP) and Rio Tinto (ASX: RIO) ADRs rose 0.4% and 1.4% respectively, which is:

a) A rather muted response compared to everything else

b) Don't get your hopes up for a massive rally at the open

Chinese iron ore futures open at 11:00 am AEST, which could provide further direction for local miners.

Key Events

ASX corporate actions occurring today:

  • Ex-dividend: AIQ, KAT, PL8

  • Dividends paid: OPH, VEU

  • Listing: None

  • Issued shares: 3DA, AMD, BBC, BID

Other things of interest (AEST): 

  • RBA Governor Lowe Speech at 9:10 am

  • UK Inflation Rate (June) at 4:00 pm

  • Canada Inflation Rate (June) at 10:30 pm

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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