ASX 200 to fall, S&P 500 and Nasdaq pull back, Bitcoin tumbles from brief record high
Get up to date on overnight market activity and the big events for the day.
ASX 200 futures are trading 10 points lower, down 0.13% as of 8:30 am AEDT.
S&P 500 SESSION CHART
ASX TODAY
- ASX 200 set to open weaker on Wednesday following a tech, growth and momentum-focused pullback for US markets
- AMA Group fielded an approach from Capital SMART founder (The Australian)
- Dicker Data founder selling $200m worth of stock (AFR)
- Eureka share trade prompts take of rival bidder (The Australian)
- Iress denies PE takeover speculation (The Australian)
- WA1 Resources holder Regal Funds Management raises stake to 10.59% from 8.49%
- Scentre Group Chairman Ilana discloses purchase of 100,000 shares
- Delta Lithium initiated Neutral at Barrenjoey with $0.30 target price
- Sigma Healthcare initiated Overweight at Barrenjoey with $1.30 target price
- Wildcat Resources initiated Overweight at Barrenjoey with $0.80 target price
MARKETS
- S&P 500 lower, finished a little off from worst levels
- Nasdaq 100 marks largest decline since it fell 2.5% on 25 October 2023
- Markets are on the defensive as pullback dynamics kick in and ahead of Powell's speech at Capitol Hill tomorrow
- Strategists mixed on whether US markets are in bubble territory (Bloomberg)
- JPMorgan says recent rally in US stocks and Bitcoin suggests a bubble, flagged risk that stocks holding record levels could continue to pressure Fed to hold rates (Bloomberg)
- Morgan Stanley says global M&A volumes will rise by 50% this year (Reuters)
- Gold hits record high as markets price in Fed rate cuts and growing demand for safe haven assets (FT)
- Bitcoin hits record high with more than US$7.5bn flowing into Bitcoin ETFs since January launch (FT)
INTERNATIONAL STOCKS
- Apple China iPhone sales down nearly 24% in first six weeks of 2024 (Bloomberg)
- AMD runs into US regulatory roadblock on sale of AI chips designed for China (CNBC)
- OpenAI expanding its communications function with addition of new product, policy and partnerships communication leads (Axios)
- Eli Lilly accelerates race to boost capacity as it rolls out rival to Novo Nordisk weight-loss drug (FT)
- Facebook, Instagram, Messenger, and Threads hit with mass outages (AP)
CENTRAL BANKS
- Atlanta Fed President Bostic says first rate cut to be followed by pause (Bloomberg)
- Sticky services inflation points ECB to resist calls for rate cuts (FT)
GEOPOLITICS
- Ukraine military says it sunk a Russia patrol ship off the coast of Crimea (Reuters)
- Israel-Gaza ceasefire talks in Cairo end with no breakthrough (Reuters)
- Macron says France does not intend to send troops to Ukraine (APA)
- China omits word "peaceful" in mention of Taiwan reunification (Reuters)
- China set to increase defence spending by most in five years (Bloomberg)
ECONOMY
- US services PMI slowed in February – 52.6 vs. 52.9 consensus – but prices paid sub-index eased as data for new orders accelerate (Reuters)
- Tokyo core inflation rebounds above 2% target as energy subsidies end (Bloomberg)
- China Caixin services PMI weakens amid slowdown in business activity (Reuters)
- Japan Q4 GDP seen revised to expansion (Nikkei)
- South Korea Q4 GDP growth maintains steady pace (Yonhap)
- China sets 2024 growth target of around 5% (Bloomberg)
Overnight Weakness
It was a pretty heavy overnight session with a lot of sectors and sub-sectors pulling back sharply. This might call for some caution after such a powerful run up. Here are a few things to note from the overnight session:
- Bitcoin: Bitcoin hit a brief all-time high of US$69,210 followed by a sharp 13% selloff to US$59,300. It's currently trading at US$63,000. Such a turn can often crush momentum.
- Lithium: It was fun while it lasted. Chinese lithium carbonate futures tumbled 7.2% on Tuesday. Over the past five days, Chinese futures are up just 4.6% (up as much as 16% earlier this week). Pilbara Minerals (ASX: PLS) finished 7.0% lower on Tuesday. Let's see if this weakness persists on Wednesday (and how Chinese lithium futures open at 12:00 pm AEDT).
- Tech: US mega caps and tech fell sharply overnight, notably Microsoft (-2.96%), Apple (-2.84%) and Amazon (-1.95%). Nvidia managed to eke out a small gain of 0.86%. You can also see this weakness from the Cloud, Fintech and Semis ETFs above. This could see some negative flows follow through for local names like Wisetech (ASX: WTC), Xero (ASX: XRO) and Life360 (ASX: 360).
- Gold: Gold rallied as much as 1.3% overnight to US$2,141 an ounce (currently up 0.7% to US$2,128). Interestingly, gold miners struggled to capture more upside. The VanEck Gold Miners ETF finished the overnight session up 0.5%, down from session highs of 2.2%. Could we see such fading action (or a muted open) for local names?
KEY EVENTS
ASX corporate actions occurring today:
- Trading ex-div: 26 companies and ETFs are trading ex-dividend. See the full-list here
- Dividends paid: Magellan Financial Group (MFG) – $0.294
- Listing: None
Economic calendar (AEDT):
- 9:00 am: Australia Ai Group Industry Index (Feb)
- 11:30 am: Australia GDP (Q4)
- 6:00 pm: Germany Balance of Trade (Jan)
- 1:45 am: Canada Interest Rate Decision
- 2:00 am: US Fed Chair Powell Testimony
- 2:00 am: US JOLTs Job Openings (Jan)
This Morning Wrap was written by Kerry Sun.
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Livewire and Market Index's pre-opening bell news and analysis wrap. Available weekday mornings and written by Kerry Sun.
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Livewire and Market Index's pre-opening bell news and analysis wrap. Available weekday mornings and written by Kerry Sun.
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Livewire and Market Index's pre-opening bell news and analysis wrap. Available weekday mornings and written by Kerry Sun.
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