Ord Minnett's two upgrades + the big tech big short

The Morning Wrap

Livewire Markets

Welcome to Charts and Caffeine - Livewire's pre-market open news and analysis wrap. We'll get you across the overnight session and share our best insights to get you better set for the investing day ahead.

MARKETS WRAP

Source: Investing.com

S&P 500 TECHNICALS

Source: Yahoo Finance

THE CALENDAR

Source: Forex Factory

US PPI came in cooler than expected, only increasing 0.2% month-on-month instead of the forecast 0.4%. Core PPI did even better, recording no month-on-month increase. Equity futures soared stateside immediately after the news before eventually fizzling out in intraday trade.

Today, we'll get the third quarter wage price index reading. This (lagging) indicator is the very data point the Reserve Bank uses to track whether Australia is going down a wage-price spiral. It also helps indicate just how much Australian wages are being eroded by inflation. The consensus forecast is for a 0.9% rise quarter-on-quarter. If that comes true, then it means wages are only going up at half the rate of inflation in that same period. 

In other data, we'll get UK CPI today and that should be another 10%+ read. 

THE CHART

Source: Bell Potter

Today's chart is some humble pie from the fine folks at Bell Potter, who also publishes a weekly note on all things energy. If you thought your gains in Woodside, Santos, Beach Energy and others were really good this year - then have I got news for you! While the ASX 200 Energy Index is up 40% over the past 12 months, the S&P 500 equivalent is up nearly 64%. 

THE STAT

US$658 million: US ETF traders are betting big time against the comeback of big tech stocks. (Source: Bloomberg)

Incidentally, that figure was just one day's worth of inflows into the SQQQ ETF (the ProShares UltraPro Short NASDAQ ETF). And although that was the record for one day, there has been some significant build-up in the last few weeks and months as well, as the following chart from that same article reveals.

Locally, inflows in the Global X funds SNAS (short NASDAQ 100) and LNAS (long NASDAQ 100) have also soared. Four-week average data from Market Index suggests the SNAS ETF has seen nearly two million units in net inflows while the LNAS ETF has seen over 1.6 million units in net inflows.

STOCKS TO WATCH

Ord Minnett has two fresh upgrades for us to peruse. 

Firstly, ALS (ASX: ALQ) has been upgraded to accumulate (read: light buy) from hold after its first-half result. Analysts were impressed by the extra dividend and believe both its commodities and life sciences businesses will continue to perform despite the economic outlook.

Secondly, Newcrest Mining (ASX: NCM) is now also an accumulate following a valuation review. Given the bounce in gold and silver prices, analysts are now more certain the US Dollar has peaked - and that's great news for gold stocks. The rise in M&A activity also doesn't hurt. 

Hans Lee wrote today's report.

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The Morning Wrap
Markets Wrap
Livewire Markets

Australia's most comprehensive markets wrap is back for 2023, with a fresh look and a new emphasis on getting you and your money ahead of the curve. Available each weekday morning at 8:30am AEDT. Written by Chris Conway, Kerry Sun, and Hans Lee.

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