Details Cookies
Cookie Policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

Daily Financial Insights: Why we think US equities could be at risk of pulling back

Daily Financial Insights: Why we think US equities could be at risk of pulling back

Jessica Amir
Market Strategist

Summary:  US equities could be at risk of pulling back, with warning signs flashing in bond markets. The Fed collects more ammunition to keep hiking but markets still expect rate cuts. We cover potential portfolio positioning. And why the Aussie dollar and Pound Sterling move in different directions.

US equities move up despite hotter-than-expected retail sales and CPI. Why we see risk of a potential pullback

Investors digested stronger than expected retail sales for January, rising 3% which is the biggest jump in about two years, with car purchases soaring, with overall sales beating expectations (of 2% rise). Core sales also beat expectations (up 2.6% vs 0.9% expected). The bottom line is that this is the second set of data out this week, that puts the Fed in a tricky situation, with stronger growth and stronger inflation. This underpins arguments that the Fed can keep rates higher for longer, even though the market thinks the Fed will cut rates later this year. Bond markets are waking up that, that markets could be in for a shock. So, yields are moving higher, with the US 10-year yield back at 3.803%, its highest level since early January - flagging the possibility of equity markets pulling back. 

On top of that, we are seeing S&P500 earnings squeezed - 75% of S&P500 companies who reported results so far, reported aggregate average earnings falls of 2.2% in the quarter (but that’s slightly better than expected). Although the S&P500(US500.I) moved up 0.3% and the Nasdaq 100 (USNAS100.I) gained 0.8% on Wednesday, we don’t want to get too complacent here. Traders may want to consider putting in portfolio protection or taking some profits off the table and topping up defensive positions such as bond exposure in case markets pull back. Naturally, the 4,100 level is a key level to watch on the downside for the S&P500. What else to consider: later this week, traders will listen to speeches from Fed officials, which could be a catalyst for equities.

Australia equities (ASXSP200.I) moved lower to one-month lows, weighted by CBA. Gold miners and coal companies' results ahead

Yesterday Commonwealth Bank, Australia’s largest lender, issued a cautious outlook as its customers are feeling ‘significant strain’. Its shares sank about 6%, falling from their record highs to $103, while also dragging down the broader Australian share market (ASXSP200.I). Australia’s biggest bank and lender reported disappointing profit results and guided for a challenging year ahead - putting aside more capital for bad debts, as higher price pressures continue to hurt consumers, along with falling home prices. Its net interest margin came in at 2.1%, which was on par with expectations, but its cash profit missed expectations, despite rising 8.6% YoY to $5.15 billion (vs $5.17 billion Bloomberg consensus). The big Bank announced a $1 billion share buy-back and consensus expects 2023 profits to hit another record, and for margins to improve – that’s good to know for long term investors. However, for potential traders, it’s worthwhile noting, yesterday CBA shares gapped down, meaning the market may fill that gap and buy the dip today or in coming days.

Today we will be watching NAB’s quarterly results as well as results from miners, coal giant Whitehaven Coal, and gold companies, Newcrest Mining and Evolution Mining with the market expecting strong results 

In FX: the Aussie dollar is wobbly ahead of AU employmentdata. Watching AUDUSD and AUDGBP

The Aussie dollar stumbled after Australia’s biggest bank flagged a weaker outlook ahead with consumers feeling strain. Still the AUDUSD pair – seems to be supported by the 50-day moving average, but if today’s employment report is stronger than expected, i.e., more than 20,000 jobs are added, then we will be watching resistance levels, at perhaps 0.7114 for the Aussie. On the downside, if Australian employment is weaker than expected, look for potential support at perhaps at 0.6879. Also consider watching copper and iron ore prices which could guide the AUDUSD. Also consider watching the AUDGBP after the UK received slightly softer than expected UK CPI, which allows the bank of England to sit on their hands for a little longer, while the RBA can keep hiking.


Click here to look at more stocks to watch across the metals sector this week.
For our team's weekly look at markets, click here. 
To listen to our global team's take on markets - tune into our Podcast.



Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.