ASX 200 to rise, S&P 500 logs best February in 9 years + Lithium futures rally

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The Morning Wrap

Livewire Markets

ASX 200 futures are trading 20 points higher, up 0.26% as of 8:30 am AEDT.

Source: Market Index
Source: Market Index


S&P 500 closes at best levels despite a choppy open (Source: TradingView)
S&P 500 closes at best levels despite a choppy open (Source: TradingView)


  • ASX 200 set to open higher on Friday and on track to mark a fresh all-time high
  • Resources and tech set for a strong session after overnight big tech outperformance, fading bond yields and firmer commodity prices
  • Collins Foods downgraded to Sell from Neutral at Citi and target cut to $10.60 from $11.93
  • Orica downgraded to Neutral from Buy at Citi but target increased to $18.50 from $17.00
  • Pepper Money upgraded to Outperform from Neutral at Macquarie and target increased to $1.70 from $1.35
  • Ramsay Healthcare downgraded to Neutral from Overweight at Macquarie and target cut to $57.50 from $60.00
  • South32 upgraded to Outperform from Neutral at Macquarie and target increased to $3.40 from $3.10
  • Service Stream upgraded to Outperform from Neutral at Macquarie and target increased to $1.25 from $0.91


  • S&P 500 finished higher and near best levels
  • Gains were largely driven by big tech while defensive sectors such as Healthcare, Staples and Utilities lagged
  • Treasury yields were very choppy after US core PCE rose 0.4% month-on-month and up 2.4% year-on-year in January – The Personal Consumption Expenditures Price Index is the Fed's preferred inflation measure and the numbers were in-line with market expectations
  • US 2-and-10-year yields both finished relatively unchanged from 5-6 bp intraday rallies
  • February major benchmark performances – Nasdaq +6.12%, Russell 2000 +5.52%, S&P 500 +5.17% and Dow +2.22%
  • February's biggest story was the shift in market rate cut expectations from March to June following hotter-than-expected inflation data and a hawkish Fed
  • Markets hit a defensive tone in the second half of last month but the path of least resistance remained to the upside
  • Ray Dalio says US stock market is not in a AI speculative bubble (CNBC)


  • Apple resellers in China cut iPhone 15 prices on persistent demand slump (Bloomberg)
  • Salesforce's solid quarterly sales, dividend cushion weak outlook (Bloomberg)
  • Snowflake slumps on CEO retirement, softer product revenue guide (CNBC)
  • HP misses first-quarter revenue estimates on weak PC demand (Reuters)
  • Shell's solar unit launches asset sale, as company rolls back climate initiatives (Reuters)


  • Fed officials voice support for rate cuts but emphasize data dependent stance (Bloomberg)
  • BoJ odds of March rate hike rising (Bloomberg)
  • BoE's Mann says price rises increasingly driven by people who do not feel the impact of higher interest rates (FT)
  • RBNZ Governor Orr confident on inflation trajectory (Bloomberg)


  • South Korea and US to begin defense cost-sharing talks in near future (Yonhap)
  • China's Wang Yi invited to Australia in March to discuss unresolved issues (SCMP)
  • Putin warns of nuclear war in annual address if NATO send troops to Ukraine (CNBC)


  • Fed’s preferred inflation metric increases by most in a year (Bloomberg)
  • French inflation eased to weakest level since September 2021 (Bloomberg)
  • India GDP rose 8.4% in the Oct-Dec quarter (Reuters)
  • UK business confidence dips but firms plan to increase hiring (CityAM)
  • Japan factory output falls at fastest pace in nearly four years (Reuters)
  • Australian retail sales recover but growth remains negligible (Bloomberg)
  • US congressional leaders avert weekend shutdown and plan to wrap up funding bills in March (Bloomberg)
  • Stronger US economy, vibrant growth could boost tax revenue, potentially stabilising debt-to-GDP ratio (Reuters)
  • Chinese long bond yields plunge as investors bet on more easing to support the country's poor economic recovery (Bloomberg)
  • Chinese regulators to tighten scrutiny of financial derivatives (Bloomberg)

US-listed sector ETFs (Source: Market Index)
US-listed sector ETFs (Source: Market Index)

It's Lithium Time

Chinese lithium carbonate futures rallied 9.2% on Thursday to 119,200 yuan a tonne, supported by ongoing production cuts and environmental inspects in Jiangxi. Prices have now rallied almost 22% in the last five sessions.

Here are some important things to note as we head into Friday's session:

  • Timing: Chinese lithium futures were up around 4.3% when the ASX closed and continued to rally through to their market close
  • Peers: China and US-listed peers rallied pretty strongly, including Ganfeng (+7.0% and up 26.7% since 5 Feb), Albemarle (+4.3% and up 26.7% since 5 Feb) and SQM (+8.0% and up 26.3% since 5 Feb)
  • Shorters: Lithium stocks are heavily shorted. Some of the most shorted names as of 23 February include Pilbara Minerals (21.24%), Core Lithium (11.66%), Sayona (8.64%) and Liontown Resources (7.56%)
  • ETFs: The VanEck Rare Earth/Strategic Metals ETF (+3.54%) and Global X Lithium & Battery Tech ETF (+3.58%) were among the best performing ETFs in our above watchlist. The Rare Earth/Strategic Metals ETF has been in a rather persistent downtrend for around 8 months. Let' see if it can buck that trend over the coming days.
VanEck Rare Earth/Strategic Metals ETF daily chart (Source: TradingView)
VanEck Rare Earth/Strategic Metals ETF daily chart (Source: TradingView)


ASX corporate actions occurring today:
  • Trading ex-div: 44 companies and ETFs are trading ex-div today. Check out the full list here
  • Dividends paid: Diverger (DVR) – $0.10, Dicker Data (DDR) – $0.15, National Storage REIT (NSR) – $0.055, Hotel Property Investments (HPI) – $0.095
  • Listing: None
Economic calendar (AEDT):
  • 12:30 pm: China NBS Manufacturing and Services PMI (Feb)
  • 4:00 pm: Japan Consumer Confidence (Feb)
  • 9:00 pm: Eurozone Inflation (Feb)
  • 9:00 pm: Italy GDP (2024)
  • 2:00 am: US ISM Manufacturing Services (Feb)

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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