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.
Tue 19 Apr 22, 8:35am (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% |
Currency | |||
|
AUD/USD | 0.7349 | -0.03% |
Cryptocurrency | |||
|
Bitcoin (AUD) | 55,488 | +0.81% |
|
Ethereum (AUD) | 4,136 | -1.23% |
Miscellaneous | |||
|
US 10 Yr T-bond | 2.862 | +1.20% |
|
VIX | 22 | -2.33% |
Stocks
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
Economy
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%
Commodities
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
Tue 19 Apr 22, 8:35am (AEST)
Sector | Chg % |
---|---|
Energy | +1.51% |
Financials | +0.61% |
Consumer Discretionary | +0.34% |
Information Technology | +0.32% |
Materials | +0.08% |
Communication Services | -0.16% |
Sector | Chg % |
---|---|
Real Estate | -0.28% |
Industrials | -0.38% |
Utilities | -0.49% |
Consumer Staples | -0.81% |
Health Care | -1.12% |
Tue 19 Apr 22, 8:35am (AEST)
Description | Last | Chg % |
---|---|---|
Commodities | ||
Nickel | 43.885 | +2.50% |
Silver | 23.64 | +0.97% |
Copper Miners | 46.11 | +0.91% |
Aluminum | 69.52 | +0.63% |
Steel | 69.7 | +0.34% |
Gold | 184.04 | +0.31% |
Lithium & Battery Tech | 72.27 | -0.36% |
Strategic Metals | 110.26 | -1.36% |
Uranium | 28.05 | -3.14% |
Industrials | ||
Aerospace & Defense | 111.92 | -0.21% |
Global Jets | 21.76 | -1.15% |
Healthcare | ||
Biotechnology | 130.86 | -2.87% |
Cannabis | 4.78 | -4.18% |
Description | Last | Chg % |
---|---|---|
Cryptocurrency | ||
Bitcoin | 24.88 | +2.05% |
Renewables | ||
Solar | 72.04 | -0.53% |
CleanTech | 15.9 | -1.57% |
Hydrogen | 18.32 | -1.64% |
Technology | ||
Semiconductor | 415.89 | +1.73% |
Electric Vehicles | 25.37 | -0.24% |
FinTech | 29.58 | -1.01% |
Robotics & AI | 26.07 | -1.04% |
Video Games/eSports | 54.86 | -1.49% |
Sports Betting/Gaming | 18.66 | -1.50% |
Cloud Computing | 21.23 | -1.51% |
Cybersecurity | 31.65 | -1.64% |
E-commerce | 21.05 | -1.66% |
It looks like the gold rally will have to wait after a sharp reversal from US$1,998.
"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.
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.
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.
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.
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.
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.
Coal prices are consolidating above the US$300/t level after the EU announced a ban on Russian coal imports from August onwards.
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.
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
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