Nasdaq hits fresh five-month high, Fed less hawkish than expected, ASX to rise

Get up to date on overnight market activity and the big events for the day.
The Morning Wrap

Livewire Markets

ASX 200 futures are trading 23 points higher, up 0.30% as of 8:25 am AEDT.

Powell says inflation has eased somewhat but remains elevated, S&P 500 rallies to a fresh six month high, AMD posts a double beat but flags elevated levels of inventory among cloud customers, Snapchat misses earnings and flags that advertising demand "hasn't really improved", gold prices hit another key milestone and JPMorgan's reporting season preview.

Let's dive in.

S&P 500 Session Chart

S&P 500 stages an aggressive rally in the last 30 minutes of trade (Source: TradingView)

Source: Market Index


  • February FOMC meeting hiked rates by 25bp to a target rate of 4.50-4.75%
  • Powell changes discussion from "pace" of future rate increase to their "extent"
  • Bulls pushed up to 47.1% in the last week of January, the highest reading since late 2021, according to Investors Intelligence survey


  • Google tests potential ChatGPT competitors (CNBC)
  • Tesla received DoJ requests for documents around self-driving claims (Bloomberg)


  • Advanced Micro Devices (+12.6%): EPS and revenue beat. Expects demand environment to remain mixed with a stronger second half.

    • "We do see elevated levels of inventory with some cloud customers, which will lead to a softer first half and a stronger second half of the year.” - CEO Lisa Su
  • Snap (-10.5%): Revenue missed expectations, no guidance provided but sees first-quarter revenue falling

    • " From our recent conversations with our partners, it seems like advertising demand hasn't really improved, but it hasn't gotten significantly worse either. I mean, obviously, the brand spend is significantly reduced like we saw in the quarter.” - CEO Evan Spiegel


  • US ISM manufacturing index falls to 47.4 in January, missing expectations and reflects a second-straight contraction after 30 months of expansion
  • US ADP private payrolls for January was 106,000 vs. 170,000 expected. Gains largely from services and big reductions in trade and construction
  • JPMorgan survey suggests traders see inflation falling in 2023 (Reuters)
  • Eurozone headline inflation eases for third consecutive month in January (CNBC)
  • Housing slump from US to China adds risks to global economy (Bloomberg)
  • China's Xi calls for heightened push to boost consumption to drive economic recovery (Bloomberg)
Source: Market Index


Fed Rundown: Cautiously dovish

Fed Rundown and Reporting Season Preview was written by Hans Lee.

Here are some Powell highlights from the rate hike and presser:

  • On inflation: “Very premature” to declare victory against the war on inflation. He argues that while goods inflation is coming down, a measure of services inflation which excludes volatile items (food and energy and housing) is still persistently above target
  • A pause: Not something on the minds of policymakers at the moment. He said he has no desire to overtighten or what rate range is “restrictive enough” - a risk he described as “very difficult” to manage
  • The debt ceiling: No one should assume the Fed can protect the country if the US defaults. There's only one way forward and that's for Congress to raise it

So how did the market feel about this? Chicken! Stocks soared and bonds were bought across the curve. As of right now, rates traders are pricing in another 25 basis points hike in March. From there, who knows.

Talking Technicals

Regardless of whether or not Powell's speech was hawkish or dovish, the market's already made up its mind. The S&P 500 has moved out to a six month high, now convincingly above that longstanding trendline.

Having cleared the trendline, the 200-day moving average and set a higher high, does this reflect a true change of character for markets?

S&P 500 daily chart (Source: TradingView)

The ASX 200 is set to receive a kick, with futures expecting a +0.39% open. That puts us less than 1.5% away from all-time highs. How crazy is that?

ASX 200 daily chart (Source: TradingView)

Sectors to watch

Tech: Big risk-on session with the Nasdaq up 2.0% and the ARK ETF up 4.4%. Our overnight ETF list also showing 3-5% gains for sectors like semis, fintech, cloud and cybersecurity. The ASX 200 Info Tech sector has been on a two day losing streak, so this could bring some strength back to growth-y pockets of the market. Though, its worth noting that Meta just posted a massive earnings miss after hours.

Gold: Gold spot prices rallied 1.2% to a nine month high of US$1,951/oz. Powell's speech triggered a sharp decline for the US dollar and bond yields. This could see some follow through for local gold miners. Although its worth noting that not all gold miners are made equal. Amid the recent breather for gold, you have names like Perseus Mining (ASX: PRU) and Evolution Mining (ASX: EVN) tumble; Newcrest Mining (ASX: NCM) hold up relatively well and Northern Star (ASX: NST) act as though there was no pullback at all.

Gold weekly chart (Source: TradingView)

Energy: Energy was the worst performing and only negative sector on the S&P 500, down -1.9%. Oil prices fell more than 2% after the EIA reported a larger-than-expected build in US crude stockpiles. Woodside (ASX: WDS) was already under pressure on Wednesday, down -1.4%.

Uranium: The Global X Uranium ETF was up 2.0% to a fresh four month high overnight.

Lithium: VanEck Rare Earth/Strategic Metals ETF adds 2.3% overnight and trying to push above the trendline. Local lithium names have been aggressively sold off in the past few sessions. Can we see the dust settle?

VanEck Rare Earth/Strategic Metals ETF (Source: TradingView)

Reporting Season Preview

UBS released its top small cap reporting season picks. If you missed it, you can read all about it here.

Today, we’re introducing you to JPMorgan’s reporting season preview. They've introduced it through a matrix of expectations. It’s not about who they want to see outperform but what they will need to see from respective companies to see any share price upside. The discretionary analysis is then coupled with the equity analysts’ own expectation of share price risk on earnings day.

Source: JPMorgan

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Australian Foundation Investment Co (AFI) – $0.11
  • Dividends paid: Arena REIT (ARF) – $0.042
  • Listing: None

Economic calendar (AEDT):

  • 11:30 am: Australian Building Permits
  • 11:00 pm: UK Interest Rate Decision
  • 12:15 am: Eurozone Interest Rate Decision

Today's 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 Chris Conway, Kerry Sun, and Hans Lee.

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