Market Wrap

Morning wrap: Wall Street slips as yields climb and commodities rally, ASX set to rise

Tue 19 Apr 22, 8:35am (AEST)

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ASX Futures (SPI 200) imply the ASX will open 10 points higher, up 0.13%.

Major US indices closed slightly lower, gold is trying to break out, China’s first quarter GDP growth beats expectations, rare earth prices fell more than -20% from February peaks and all eyes on US corporate earnings.

Let’s dive in.

Overnight summary

Mon 18 Apr 22, 10:35pm (AEST)

Name Value Chg %
US Indices
S&P 500 4391.69 -0.02%
Dow Jones 34,412 -0.11%
NASDAQ Comp 13,332 -0.14%
Russell 2000 1,990 -0.74%
Country Indices
Canada 21,878 +0.10%
China 3,196 -0.49%
Germany 14,164 +0.62%
Hong Kong 21,518 +0.67%
India 57,167 -2.01%
Japan 26,800 -1.08%
United Kingdom 7,616 +0.52%
Name Value Chg %
Commodities (USD)
Gold 1,980.80 -0.28%
Iron Ore 155.62 -
Copper 4.804 +0.03%
WTI Oil 107.41 -0.74%
AUD/USD 0.7349 -0.03%
Bitcoin (AUD) 55,488 +0.81%
Ethereum (AUD) 4,136 -1.23%
US 10 Yr T-bond 2.862 +1.20%
VIX 22 -2.33%


  • Major US indices fell sharply last Thursday (last session before Easter holidays) due to a spike in Treasury yields and China extending covid lockdowns

    • Nomura estimates that 373m people in 45 cities are now fully/partially locked, representing circa 40% of China’s GDP

  • All 3 major indices edged lower overnight

  • Goldman Sachs’ chief economist Jan Hatzius predicts the US economy faces a 35% chance of recession in the next two years amid tightening financial conditions 

  • 5 out of 11 US sectors were positive

  • Energy, financials, discretionary and tech outperformed

  • Healthcare, staples, utilities, industrials and real estate underperformed

  • 60% of US stocks declined

  • 63% of US stocks trade below their 200-day moving average (62% last Thursday, 63% a week ago)

  • Several US investment banks reported earnings last Thursday: 

    • Morgan Stanley beat profit and revenue estimates

    • Citi earnings topped analysts expectations, even after posting a -46% profit slump

    • Goldman Sachs profit and revenue also fell, but ahead of Wall Street expectations

  • Charles Schwab fell -9.4% after the multinational financial services company's earnings fell short of Wall Street expectations

  • Didi Global plunged -18% after the Chinese rideshare giant plans to hold an extraordinary general meeting on 23 May to vote on a proposed delisting from the New York Stock Exchange

  • Earnings to watch out for tomorrow include Johnson & Johnson, Lockheed Martin, Netflix and IBM


  • Economic data from last Thursday:

    • US retail sales rose 0.5% in March, reflecting higher energy prices

    • US initial jobless claims rose 18,000 to 185,000 for the week ended 9 April. Claims previously hit a 54 year low in the prior week

    • US consumer sentiment bounces more than 10% in April to 65.7 from a March reading of 59.4 as Americans expect energy prices to stabilise over the next year

  • China’s GDP grew 4.8% year-on-year in the first quarter, topping forecasts of 4.0%


  • Iron ore prices held steady around US$155 a tonne 

  • Gold briefly hit US$1,998 in overnight trade before fading to US$1,978. Higher bond yields and US dollar weighed

  • Oil prices are stabilising around the US$100 a barrel level. OPEC flagged that production only rose 57,000 barrels a day in March, well below its agreed 253,000 barrels a day target


US Sectors

Mon 18 Apr 22, 10:35pm (AEST)

Sector Chg %
Communication Services -0.16%
Consumer Discretionary +0.34%
Consumer Staples -0.81%
Energy +1.51%
Financials +0.61%
Health Care -1.12%
Sector Chg %
Industrials -0.38%
Information Technology +0.32%
Materials +0.08%
Real Estate -0.28%
Utilities -0.49%

Industry ETFs

Mon 18 Apr 22, 10:35pm (AEST)

Description Last Chg %
Aluminum 69.52 +0.63%
Copper Miners 46.11 +0.91%
Gold 184.04 +0.31%
Lithium & Battery Tech 72.27 -0.36%
Nickel 43.885 +2.50%
Strategic Metals 110.26 -1.36%
Steel 69.7 +0.34%
Silver 23.64 +0.97%
Uranium 28.05 -3.14%
Aerospace & Defense 111.92 -0.21%
Global Jets 21.76 -1.15%
Biotechnology 130.86 -2.87%
Cannabis 4.78 -4.18%
Description Last Chg %
Bitcoin 24.88 +2.05%
CleanTech 15.9 -1.57%
Hydrogen 18.32 -1.64%
Solar 72.04 -0.53%
Cloud Computing 21.23 -1.51%
Cybersecurity 31.65 -1.64%
E-commerce 21.05 -1.66%
Electric Vehicles 25.37 -0.24%
FinTech 29.58 -1.01%
Robotics & AI 26.07 -1.04%
Semiconductor 415.89 +1.73%
Sports Betting/Gaming 18.66 -1.50%
Video Games/eSports 54.86 -1.49%

ASX Sectors to watch

#1 Gold 

It looks like the gold rally will have to wait after a sharp reversal from US$1,998.

Gold spot
Source: TradingView

"Profit-taking hit gold as the dollar rallied after a dovish ECB decision and as the bond market selloff resumed after more hawkish Fed talk and another round of economic data that suggests inflation is starting to weigh on the consumer," said Oanda senior market analyst, Ed Moya.

ASX gold stocks rallied strongly last Thursday in response to higher spot prices. The overnight reversal might weigh on gold names on Tuesday.

#2 Copper

Copper is trying to break out, rallying 1.7% to US$4.8/lb. Likewise, the Global X Copper Mines ETF closed up 0.9%, less than 2% away from a 10-year high.

Source: TradingView, Annotations by Market Index

Last week, Goldman Sachs released a note saying:

"Without any apparent softening adjustments already underway, we believe higher [copper] prices are an inevitability - required to stimulus substantially more scrap supply as well as accelerate demand destruction to balance this market.”

The investment bank forecasts prices to rise to US$5.2/lb, US$5.44/lb and US$5.9/lb on a 3, 6 and 12 month basis.

#3 Uranium

Uranium was one of few ETFs to close noticeably lower overnight, down -3.1%.

Uranium spot prices remain unchanged at US$64/lb, according to fuel brokers Numerco.

The Uranium ETF remains up 5.8% in April. Though, the overnight weakness could send local names lower on Tuesday.

#4 Lithium/Rare Earths

The Rare Earth Price Index fell -21.95% from a recent peak of 1,007 on 24 February, according to Chinese data provider 100PPI. Purchases from downstream players have slumped amid lockdowns for EV and magnet manufacturers.

Rare earth price index

Likewise, Chinese lithium carbonate prices fell for the first time in 8 months as several carmakers suspend production amid covid lockdowns and a traditionally weak demand season.

The Rare Earth/Strategic Metals ETF has fallen back to its previous trading range. A bounce would be ideal as the ETF is beginning to run the risk of falling to its 200-day moving average and previous support areas.

2022-04-19 08 18 46-REMX 2022-04-19 08-18-29.png ‎- Photos
Source: TradingView, Annotations by Market Index

#5 Coal

Coal prices are consolidating above the US$300/t level after the EU announced a ban on Russian coal imports from August onwards.

2022-04-19 08 23 52-Coal - 2022 Data - 2008-2021 Historical - 2023 Forecast - Price - Quote - Chart
Source: TradingEconomics

Chinese coal stocks fell between -4% and -10% on Monday after China's National Development and Reform Commission (NDRC) held a meeting to study the criteria for identifying illegal activities in coal markets.

It will be interesting to see whether or not these moves will have a material impact on local coal names.

Today's events

ASX corporate actions occurring today:

  • Ex-dividend: KPG

  • Dividends paid: CAR, MGH, RCB, RDV, RGB, VEE, VG1, VG8

  • Listing: None today

Things of interest (AEST):

  • RBA meeting minutes at 12:30 pm


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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