ASX 200 to ease, Nvidia lifts S&P 500 higher, oil prices hit four-month low (2024)

ASX 200 futures are trading 12 points lower, down -0.15% as of 8:30 am AEST.

ASX 200 to ease, Nvidia lifts S&P 500 higher, oil prices hit four-month low (1)

S&P 500 SESSION CHART

ASX 200 to ease, Nvidia lifts S&P 500 higher, oil prices hit four-month low (2)

OVERNIGHT MARKETS

Major US benchmarks ended mixed overnight, recovering from session lows
Nvidia (+4.9%) lifted benchmarks higher while the blue-chip Dow (-0.3%) and Equal Weight S&P 500 (-0.5%) underperformed
Bond yields continued to fall, with the US 2-year yield down 16 bps in the last three sessions to 4.81%
Key moving pieces from the overnight session include AI growth theme with new data centre chips from Nvidia and AMD, big tech cushioning the broader market, meme stocks soaring on Roaring Kitty’s Gamestop stake, growth concerns after softer-than-expected US ISM manufacturing data and Atlanta Fed’s Q2 GDP downgrade
Market sentiment has become more stretched
- BofA’s Sell Side Indicator rose 67 bps to 55.3% in May, the largest increase since December 2023 and now at 2 year highs
- AAII bull-bear spread ended May at +12.3% vs. -1.8% at the end of April
- Jefferies’ Conference Board survey revealed 48% expect equities to move higher over the next 12 months, the third highest reading of all-time
GameStop surged as much as 74% after Roaring Kitty's Reddit post shows $116m bet (
Bloomberg
)
Morgan Stanley and JPMorgan strategists split on US market outlook (
Bloomberg
)
Brent falls below US$80 for first time since Feb on OPEC+ output news (
Bloomberg
)
Mexico's stock market crashes, worst day since 2008 after Claudia Sheinbaum was elected as the next President (Reuters)

INTERNATIONAL STOCKS

AMD launches new AI chips it plans to develop over next two years to take on leader Nvidia (
Bloomberg
)
Microsoft will invest >US$3bn to expand cloud and AI infrastructure in Sweden (
Reuters
)
Global airlines full-year profit forecast to rise to US$30.5bn as travel soars (
Reuters
)
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Target and Best Buy see customers increasingly trading down, retailers continue to price cuts or value offers to address customers hitting limit on price increases (
NY Times
)
Bill Ackman sells 10% stake in Pershing Square ahead of potential IPO (
FT
)

CENTRAL BANKS

Minneapolis Fed President Kashkari sees rates on hold for extended period of time (
FT
)
RBA seen as only other major central bank besides BOJ at risk of raising rates (
Bloomberg
)
ECB's incoming rate cut marks chance for Europe to address long-standing growth challenges (
Bloomberg
)

GEOPOLITICS

Far-right revolt against Israeli PM Netanyahu sees Biden ceasefire plan in jeopardy (
FT
)
Indian markets rally to record highs as exit polls show decisive victory for Modi's re-election (
FT
)
Mexican peso pressured after decisive ruling party election win (
Bloomberg
)
Chinese businesses target Vietnam and Mexico as trade tensions rise between Beijing and western nations (
FT
)
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ECONOMY

US manufacturing activity slowed by more than expected in May as new orders dropped by the most in nearly two years (
Reuters
)
China Caixin PMI rises at fastest pace in about two years, in contrast with weak official reading (
Reuters
)
Japan's factory activity expands for first time in a year in May but overall growth was modest and demand was still subdued (
Reuters
)
South Korea factory activity expands at fastest pace in two years in May on stronger growth in output and orders (
Reuters
)
Eurozone PMI show new orders declined at slowest pace in two years, leading to improved business confidence (
Reuters
)
UK May PMIs show factories return to growth, prices rise by most in a year (
Reuters
)

ASX 200 to ease, Nvidia lifts S&P 500 higher, oil prices hit four-month low (3)

ASX TODAY

ASX 200 set for a relatively soft open as most materials, defensives and financial sectors struggled for upside overnight
Energy set for a tough session as Brent crude prices tumble 3.9% after Saudi Arabia and its allies plan to start increasing oil production in October
Global X Uranium ETF (-2.1%) was heavy overnight, which generally points towards a relatively weak session for local names
Biotech has been running hot this year, with plenty of large (Telix, Neuren) and small-to-mid cap (Dimerix, Botanix, LTR Pharma) rallying to all-time highs
Resouro Strategic Metals is set to list at 11:00 am AEST – The company is already listed on the Canadian stock exchange and seeks to develop its rare earth and titanium Tiros Project in Brazil. Its IPO offer price was 50 cents and it closed at C$0.55 overnight (A$0.60)
Life360 launches 5.8m share US IPO through Goldman Sachs (
424B5 filing
)
Genetic Signatures on track to price $30m raise at 75 cents per share (
The Aus
)
Guzman y Gomez tried its luck with PE before launching $2.2bn float (
AFR
)

BROKER MOVES

Lottery Corp upgraded to Buy from Neutral; target up to $5.60 from $5.50 (Citi)
Lovisa downgraded to Equal-weight from Overweight; target cut to $30.25 from $32.50 (Morgan Stanley)
Lovisa downgraded to Neutral from Buy; target remains $31.65 (Citi)
Navigator Global Investments downgraded to Neutral from Outperform but target up to $2.22 from $1.55 (Macquarie)
Peter Warren Automotive Holdings downgraded to Equal-weight from Overweight; target cut to $1.90 from $3.0 (Morgan Stanley)
Premier Investments upgraded to Outperform from Underperform; target remains $32.0 (CLSA)
Ramsay Healthcare upgraded to Neutral from Underweight; target remains $50.0 (JPMorgan)

KEY EVENTS

Companies trading ex-dividend:

Tue 4 June: Probiotec (PBP) – $0.037
Wed 5 June: Qualitas Real Estate Income Fund (QRI) – $0.012, Hanco*ck & Gore (HNG) – $0.01, Infratil (IFT) – $0.017
Thu 6 June: None
Fri 7 June: None
Mon 10 June: None

Other ASX corporate actions today:

Dividends paid: None
Listing: Resouro Strategic Metals at 11:00 am

Economic calendar (AEST):

No major economic announcements.

This Morning Wrap was written by Kerry Sun.

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