ASX Market Outlook: Pre-Open Brief 19.03.2025 - Futures, Stocks and Key Events
ASX Stock Market Outlook
ASX set to open flat as markets turn defensive
After a brief bounce, the risk-off trade is back. ASX 200 futures point to a flat open, tracking a Wall Street pullback as investors reposition ahead of the Federal Reserve’s big decision tomorrow. The theme? Caution.
Tech stocks got slammed overnight, gold keeps pushing record highs, and oil is retreating after a sharp run-up. The market is jittery, and with Trump-Putin talks hanging in the balance and rate policy uncertainty, traders are playing it safe.
Overnight Wrap: Equities, Bonds, Commodities and Currencies
Wall Street's recent rally hit a snag overnight, with major indices retreating amid renewed concerns over U.S. trade policies and the Federal Reserve's upcoming decision. The S&P 500 futures fell 0.19%, the Nasdaq 100 futures dropped 0.66%, while the Dow Jones futures bucked the trend with a 0.13% lift. Notably, tech stocks such as Tesla and Alphabet faced significant declines, with Tesla shares dropping 5.34% and Alphabet shares falling 2.2% following its $32 billion acquisition of cybersecurity firm Wiz.
In Europe, markets held up better, with the Euro Stoxx 50 and DAX rising. Optimism around economic stimulus in the EU and a potential Ukraine ceasefire (Trump-Putin talks happening this week) gave European investors something to cling to.
The Play Today: How to Trade the ASX Open
Gold stocks should remain a hot pick today, so keep them on your radar. Tech is vulnerable. Nasdaq got hammered, and ASX tech names could follow. EnCaution is key today. There’s a lot of uncertainty ahead of the Fed, and Trump-Putin headlines could swing markets either way. If talks go well, expect a relief rally. If not? Volatility will spike fast.
The bounce in the ASX has been weak and mainly driven by just a couple of sectors. This is a big warning sign that things might not be healthy under the surface. Check out the ASX Sector Dispersion section below for more detail.
Major Themes Driving the Financial Markets:
Tariffs and trade war: Markets are taking this very seriously, with a recession or hot war becoming a more serious prospect. There’s also a real risk that tariffs lead to higher inflation and lower GDP (stagflation).
The Ukraine war: The resolution to the conflict in Ukraine is important for global confidence in Trump’s leadership. If a resolution doesn’t occur quickly, the chances of the conflict getting bigger and Russia and China getting bolder increase.
Tech Sector Volatility: Significant sell-offs in major tech stocks, particularly Tesla, indicate that the market is taking risk off the table. This is supporting gold and keeping the USD strong.
Economic Data to Watch this Week:
Monday 17th:
Chinese industrial production 5.9% vs 5.3% expected
Chinese retail sales 4.0% vs 3.8% expected
US retail sales 0.2% vs 0.6% expected
Tuesday 18th:
Australia’s Sarah Hunter of the RBA to speak at the Australian Financial Review Banking Summit
Canadian CPI 1.1% vs 0.6% expected
US import prices 0.4% vs -0.1% expected
Wednesday 19th:
Japanese BOJ interest rate decision and press conference
Thursday 20th:
US FOMC interest rate decision and press conference
Australian unemployment rate
UK interest rate decision
Friday 21st:
Japanese CPI
Reading List
MIQ: Guide to Navigating the Sell-off
Ray Dalio: How Countries Go Broke
Global Market Prices
Global Markets(Source: TradingView)
ASX Sector Dispersion
The ASX is showing cracks. Financials, Consumer Discretionary, Consumer Staples, Communications, Information Technology and Healthcare are all still very very very heavy, wallowing at their lows despite the strong rebound in the US. Utilities are very strong, back near their highs. Industrials and Energy have put in an unconvincing bounce, while Materials are also up strongly in the last few days.
So with most sectors not believing the hype, and the overall index up, but hardly shooting the lights out this week, doubt can now creep in. Is this a bear rally? Is worse yet to come?
Having said that, there are some nice technical levels lining up. The following chart shows the 8000 level from October supporting price in the Financials.
ASX Financials sector index (Source: TradingView)
ASX Stock to Watch: Droneshielc (ASX:DRO)
While Droneshield's price falters and doubt may be starting to creep in, indicators of momentum remain strong. The resumption of hostilities in Gaza may lead to renewed interest in DRO.
ASX Stocks to Watch (Source: TradingView)
ASX Stock to Watch: APA Group (ASX:APA)
APA has benefited as a somewhat defensive stock, sitting somewhere between a utility with his network of pipelines and an energy company with the gas it transmits. Both have been stronger sectors recently. But this impulse higher now is getting long in the tooth. We expect longs will be tightening their stops here. Momentum remains, but the chart is messy here.
ASX Stocks to Watch (Source: TradingView)
The Daily Brief is prepared in partnership with Vitti Capital.
