Market Updates

 ASX 200 fell hard again today from the off down 100 points to 7009 (1.4%) at the close. Well off the lows as some sensibility returned and bond yields stabilised. Banks were the target but insurers too under severe pressure. QBE down 3.7% and SUN off 3.6%. The Big Bank Basket fell to $167.83 (0.4%) with NAB the big bad bank off 1.5%. Regional banks in trouble, BEN down 1.6% and BOQ off 2.3%. MQG slumped 3.1% with fund managers under serious pressure. PPT off 7.0% and MFG falling 6.0% with CGF down 5.6% as yields tumbled. Industrials slid with CSL falling 1.5% and WES off 1.3% with REITS easing and old skool tech down, SEK down 2.5% and CAR off 2.3%. Tech stocks down again, WTC off 2.3% and XRO falling 1.5% with CPU falling hard as yields fell off 7.7%. The All-Tech Index dropped 2.5%. Resources were up against the wall, BHP fell 1.8% with FMG and RIO falling a similar amount. Lithium stocks were taken out behind the woodshed and chopped up, PLS down 5.9%, IGO off 3.2% and MIN falling 3.8%. Energy stocks fell with WDS off 2.8% and STO off 1.8%. Coal stocks in a bunker, WHC falling 5.3% as YAL crashed 16.9% on news of a China listing. Gold miners were the only bright spot with NCM up 3.0% and NST up 1.4%. Hardly a gold rush more a stroll. In corporate news, KLS in a trading halt as it locks down a capital raise, SZL square on a US listing and PPK buys a battery tech company. On the economic front, bond market turmoil still. Black Monday in the bond market still reverberates with US CPI ahead tonight. Plenty of surveys out today. Consumers are not happy Jan. Asian markets weaker and 10-year yields down to 3.42%.

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Dow Jones down 91 points (-0.28%). Dow up 331 at best. Down 285 at worst. S&P 500 down 0.15%. NASDAQ up +0.45%. In Europe, STOXX 50 -3.1% FTSE -2.6% CAC -2.9% DAX -3%. SPI Futures are down 132 points (-1.86%).

• Gold rose 2.51% overnight as a safe-haven asset following the collapse of Silicon Valley Bank, which also sparked hopes that the US Federal Reserve would have to slow down its aggressive monetary policy.
• Copper prices rose 0.78% in volatile trading as the sudden collapse of SVB created risk aversion in financial markets. A weaker dollar also supported prices, as did signs of improving copper demand in China.
• Nickel +2.53%, Aluminium +0.84%, Zinc +0.51%, Lead +0.48%, Tin 2.07%.
• WTI crude fell 2.44% and Brent fell 2.63% overnight, the lowest level since early December, due to financial contagion fears and concerns about risks to banks.

ON THE CALENDAR

• Domestic data: NAB Business Confidence
• UK data: Unemployment rate, Claimant Count Change, Employment Change, Average Earnings.
• US data: n/a

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ASX 200 closed down 36 to 7115 (0.5%) in a volatile session as the SVB rattled confidence. Despite a huge US futures rally, the index remained under pressure all day. Asian stability and China comments from Li and Xi failed to dispel the uneasy feelings. Banks were under pressure as bond yields fell hard and GS and other walked back aggressive moves by central banks in the wake of the SVB implosion. The Big Bank Basket dropped to $168.54(0.95%) with MQG off 1.4% and insurers tumbling as yields fell, QBE down 2.7% and SUN off 2.1%. Money managers also in the doghouse, PPT down 4.9% and CGF off 3.1%. Industrials under pressure, TLS down 1.0%, WOW off 1.1% and QAN falling 0.5%. Old skool platforms in demand, CAR up 0.5% and REA rallying 1.3%. Healthcare eased slightly and REITs fell with GMG down 0.7% and GPT off 1.1%. Resources were mixed, gold miners rallied hard as bullion rose again in Asia on safe haven buying, NCM up 2.9% and NST up 5.0%. Lithium stocks remain depressed, PLS down 2.3% and LTR down 3.2%. Iron ore better, BHP up 1.8% and Oil and gas stocks also better led by WDS up 0.3%. On the corporate front, many small tech companies confessed to their SVB exposure which didn’t amount to much in the scheme of things. NEU had a great day following the FDA tick up 18.5% and WGX rallied 13.4% on a Big Bell operations update. Nothing on the economic front today. Asian markets mixed, Japan down 1.4% and HK up 2.3% with China up 0.9%.

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Dow Jones down 345 on Friday (-1.07%). Up 167 at best. Down 471 at worst. S&P 500 down 1.45%. NASDAQ down 1.75%. S&P 500 had its biggest weekly fall since September down 4.55%. The Dow Jones fell 4.44% and the NASDAQ 4.71% on the week. The S&P 500 has almost lost its 2023 gains.

SPI Futures down 39. European markets lower, STOXX 600 down 1.35%, UK down 1.67%, with Deutsche Bank down 7.3% and most UK banks down 2.3% to 4.6%. Dow Jones on Friday - a late 100 point rally saves it closing on its low.

• Commodities - Gold jumped 1.94% as bond yields fell and as the US dollar dipped 0.66%. Metals mostly lower. BHP and RIO down 1.02% and 1.0% in the US.
• Wall Street tumbles, Treasury yields slide after jobs report as bank jitters spread.
• Fed under less pressure to speed rate hikes as wage gains cool.
• US jobs data can spare Fed rate ratchet.
• Strong US job growth persists; wage inflation shows signs of slowdown.
• Banking regulators shutter SVB, collapse unnerved investors.
• US bank stocks added to losses as regulators close SVB Financial.
• Californian tech bank SVB sews global fear about rising cost of money.
• Silicon Valley dies, but it’s disease lives on.
• Concentration risk an old lesson from SVB collapse.
• US deficit grows to $262 billion in February as tax refunds search.
• Meta looking to launch rival for Twitter.
• Biden - Payrolls report shows economy headed in the right direction.
• Ukraine says Bakmut battle is grinding down Russia’s best units.
• Tesla looks to Chinese and Korean material suppliers to help lower costs.
• Yellen warns U.S. House members of “economic collapse” if debt ceiling is not raised.
• Iran and Saudi Arabia moved towards the resumption of ties.
• Argentina set to hold interest rate at 75% in March as inflation nudges towards 100%.
• The aluminium price hits a two month low on higher rate expectations. (Aluminium is seen as being geared to economic growth more so than most other metals).

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 ASX 200 fails to find any floor falling 166 points to 7144 (2.3%). Down 2% for the week. A killer combo of US bank worries, nerves before the US jobs number and a capitulation is some resource stocks caused a rupture in the time space continuum. Banks were an easy target with CBA down 3.3%, ANZ down 2.6% and the Big Bank Basket falling to $170.15 (-3%). MQG dropped hard down 3.2% with insurers also under pressure, QBE down 1.8% and SUN caught in the crossfire down 2.8%. Wealth managers held up a little better with PPT down only 1.9% and MFG off 1.8%. PTM actually unchanged. Industrials under all sorts, CSL dropped 1.5% and REITS stumbled badly despite bond yields falling. Strange days indeed. Tech under pressure, XRO only down slightly off 0.3% with WTC off 1.6% and the All-Tech Index down 1.7%. Tourist stocks fell hard too, FLT down 3.6% and WEB off 2.6%. In resources it was a nasty day especially for lithium stocks. IGO down 7.2%, AKE off 8.6% and MIN crashing 6.2%. LYC dropped 4.7% with LTR falling 8.0%. BHP and RIO under serious pressure down over 3% and FMG nearly joining the 3% club. Gold miners did ok. Finding some safe-haven buying. NST up 1.7% and EVN up 1.1%. In corporate news, A11 and PLL responded to the short seller report and still fell hard as expected. APM up 2.3% on a new contract in North America. Nothing on the economic front. Asian markets hit hard as President Xi nominated unopposed to the top job.

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Wall Street reversed early gains overnight, weighed down by bank stocks and jitters ahead of employment data. Treasury yields retracted and the dollar softened, showing signs the Feds monetary policy is beginning to work as intended. Dow Jones down 58 points (-0.18%). Dow up 147 at best. Down 608 at worst. S&P 500 up 0.14%. NASDAQ up 0.4%. In Europe, STOXX 50 -0.1% FTSE -0.6% CAC -0.1% DAX -0.01%. SPI Futures are down 81 points (-1.11%).

• Gold prices rose 1.1% as the dollar weakened following an unexpected increase in US jobless claims.
• Copper prices fell 0.61% on concerns about sluggish demand in China and rising US interest rates.
• Nickel -2.72%, Aluminium -1.1%, Zinc -0.23, Lead -0.5%, Tin -1.29%.
• WTI crude down 1.25% and Brent down 1.52% as concerns about weak global demand and potential tightening from the Federal Reserve kept a lid on prices.

HEADLINES

• ASX to open lower, pending US jobs data spooks Wall Street.
• Wall Street turns lower, Treasury yields dip ahead of jobs report.
• Wall St falls with banks tumbling, pre-jobs report jitters.
• US mortgage rates hit highest since November at 6.73%.
• Bank stocks sink most in nearly three years as sentiment sours.
• Credit Suisse delays annual report after SEC call, shares drop.
• Ex-goldman Sachs banker gets 10-year sentence for fraud.
• US weekly jobless claims post largest rise in 5 months; labor market still tight.
• Gold climbs 1% as U.S. jobs data soothes investors.
• Copper drifts lower on concern over China demand and U.S. rates.
• Oil market has fully absorbed impact of Russia's invasion of Ukraine.
• Crypto stocks slide after Silvergate decides to shut down.
• Biden's $6.8 trillion budget challenges Republicans, raises taxes on rich.

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 ASX 200 closed up 3 points at 7311 (0.05%). A good effort considering the downdraft of around 28 points from BHP and RIO ex dividends. Solid gains across the board in a tight trading range with US jobs on Friday now the focal point after Powell. Banks higher again with CBA up 0.3% and WBC leading the charge up 1.2% with the Big Bank Basket up to $175.48 (0.6%). MQG flat, Insurers slightly higher with wealth managers mixed, AMP up 1.0% and MAF down 0.9%. Industrials better led by XRO in the tech space as it announced a new growth policy by cost cutting. CPU up 0.9% with the All-Tech Index doing well up 2.3%. Staples better, WES up 0.7% and TLS up 0.5% with BXB up 1.0% and QAN continue to cruise at altitude up 0.4%. REITs positive too, healthcare eased CSL ex div down 2.2% and RMD off 1.2%. Resources bounced back with the exception of BHP and RIO which fell on ex divs, lithium stocks were better, LTR up 4.3% and PLS up 4.4% with MIN better by 1.9% and LYC finding some friends after JARE deal up 1.6%. Gold miners were slightly firmer on some bargain hunting and energy stocks better WDS up 1.2% and STO up 1.1% and WHC bouncing hard up 5.6%. In corporate news, MYR stunned retail watchers with a great set of numbers and a special dividend. Solly will be happy. Up 18.3% on the news. XRO cut 800 jobs, Alta Fox reduced its stake in EML. 29M sank 4.7% on rain closing production in QLD and lithium hopefuls A11 and PLL in a halt pending a response to a short seller attack. Nothing local on economic front but Chinese CPI coming in weaker than expected. 10-year yields 3.72%.

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US markets struggle for direction overnight and treasury yields rose again following hotter job figures and Powell’s reassertion that the Fed would continue to raise rates until inflation subsides. The Dow closed down 58 points (-0.18%). At best it was up 47, and at worst down 244. S&P 500 up 0.14%. NASDAQ up 0.4%. In Europe, STOXX 50 +0.2% FTSE +0.1% CAC -0.2% DAX +0.5%. SPI Futures are up 32 points (+0.44%). Recovering some of yesterday’s loses.

• ASX to rise, Powell walks back harsher rate rhetoric.
• Wall St flutters, Treasury yields ease as Powell resumes testimony.
• S&P 500 falls slightly after mixed data; focus on upcoming jobs data.
• Fed still up in the air on whether to accelerate rate hikes, Powell says.
• US job openings stay elevated as labor market remains tight.
• US opens new special probe into fatal Tesla crash.
• Fintech firms may struggle to find investor love in rebounding U.S. IPO market.
• Bankman-Fried's bid to shift blame complicated by new charges.
• Copper prices rise as dollar dips from three-month high.
• Gold holds near 1-week low as Powell sticks to hawkish narrative.
• U.S. crude inventories fall amid another large adjustment.
• U.S. trade deficit widens moderately in January.
• Biden budget aims to cut deficit by nearly $3 trillion.
• Britain's Hunt to keep tight budget with eye on 2024 election.
• Ukraine defiant as Russians claim control over Bakhmut's east.
• French pension strikes to continue Thursday, disrupting fuel supply and air travel.

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 ASX 200 fell hard down 57 points to 7308 (0.8%) after US falls and another day ahead of Powell testimony. Few sectors or stocks escaped today after the Fed spooking, Banks eased with CBA down 0.5% and WBC down 1.2%. The Big Bank Basket fell to $174.30 (-0.7%). MQG gave back some recent gains falling 1.1%, money managers held up better than expected. Insurers mixed. IAG and QBE slightly better. REITs slipped a little but held relatively firm, industrials mixed with WOW down 0.6% and COL off 0.3% with DMP falling another 3.8%. Tech flat with CPU up 1.4% and XRO down 1.2%. The All-Tech index only slightly easier. Healthcare mixed with RHC off 0.5% and COH up 1.1%. Resources once again the problem. A killer combo of a lower AUD, lower Chinese GDP target and falling commodity prices are hurting. WDS fell 7.2% after going ex-dividend. BHP and RIO down slightly ahead of dividends tomorrow. Gold miners crashed despite AUD Bullion unchanged, NCM down 3.3% and NST off 2.8% with EVN cratering 4.2%. Lithium on the nose, PLS down 1.4%, LTR off 2.1% and CXO falling 3.5%. Base metals also under pressure, S32 down 2.2%. On the corporate front, NCZ board threw in the towel and recommended the offer, QAN hit a three year high on an ACCC report, NXL fell hard as the Ex CEO appealed the recent decision and MSB resubmitted its application to the FDA and CAR in a trading halt as it buys another 40% of Brazilian website. On the economic front, RBA head teller went all warm and fuzzy and talked empathy on rates and the pause. Asian markets struck down on Powell comments. HK falling hard. 10-year yields remarkably steady considering.

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The Dow closed down 575 points (-1.72%) as markets fell on Powell’s Speech. S&P 500 down 1.53%. NASDAQ down 1.25%. In Europe, STOXX 600 -0.77% FTSE -0.13% CAC -0.46% DAX -0.6%.  US Banks taking a beating on the back of Powell's Speech, Wells Fargo down 4.68% and Bank of America down 3.2%.

The ASX is set to open lower as the US central bank is expected to lift rates higher and potentially at a faster pace after Powell repeated his hawkish stance. ASX 200 Futures are down 60 points (-0.82%) and the AUD has dropped 2.2% to below US66¢. The drop in the currency reflects the prospect of a further widening yield gap between US and Australian government bonds as US rates.

• The Aussie dollar falls by almost 2% down 1.99% to 65.87c, hitting a four-month low.
• Gold plunged 1.67% overnight while the USD Index strengthened up 1.21% after Fed Chair Powell indicated rate hikes could come at a faster pace.
• Base metals are all down Copper fell 2%, pressured by weak import data from China and easing tensions in Peru. Aluminium fell 1.66%, Nickel -1.59%, Zinc -2.9%, Lead -1.49% and Tin -0.69%.
• Crude oil was punished overnight, with Brent down 3.61% and WTI down 3.66% as Powell’s comments triggered a selloff across risky assets. Oil was already under pressure after China’s lower-than-expected GDP forecast, and China’s reopening didn’t spur demand as initially thought.

Catch up on all the latest with Henry Jennings on today’s Pre-Market Podcast.

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