ASX 200 to kick off FY25 in red, S&P 500 gives back early gains (2024)

ASX 200 futures are trading 35 points lower, down -0.45% as of 8:30 am AEST.

S&P 500 SESSION CHART

OVERNIGHT MARKETS

• Major US benchmarks finished mostly lower and near worst levels after a late-session selloff, likely attributed to quarter-end flows

• Relatively uneventful session outside of a few themes – US May core PCE showed continued disinflation momentum, consumer spending growth was weaker than expected, Nike earnings underwhelmed

• US 10-year yield ticked higher throughout the session, up 11 bps to a near three-week high of 4.40%

• Major US benchmarks mostly higher in June, led by the Nasdaq (+5.96%), S&P 500 (+3.47%), Dow (+1.12%) and Russell 2000 (-1.08%)

• First-half bullish highlights – Nvidia up over 150%, above-trend US economic growth, choppy disinflation, consensus for double-digit 2024 S&P 500 earnings growth, US$1tn 2024 buyback expectations and strong inflow trends (US$130bn to US equities)

• First-half bearish highlights – Hawkish repricing of Fed easing expectations, stick services inflation, exhausted excess savings, dampened corporate pricing lower, breadth concerns, elevated sentiment and geopolitical tensions

• Wall Street bears struggle to convince optimistic clients, saying they have embraced 'fanatical thinking' (

  FT

  )

• French election sparks domestic market turmoil with bonds, stocks and Euro under pressure (

  Bloomberg

  )

STOCKS

• Amazon intends to invest over US$100bn in AI and data centers over next decade (

  WSJ

  )

• Ford's planned US$30,000 EV expected to be profitable in two years (

  Reuters

  )

• Nestle forecasting stable sales growth for remainder of year amid easing cost inflation (

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  Wells Fargo hiring Associate Customer Service Representative Everyday Banking in Phoenix, Arizona, United States | LinkedInTiny Chain Bridge is top banker to Trump, Republican campaignsThings to do in Philly this weekend – Phillies vs. Marlins, Chris Brown, Chinese Lantern Festival and more

  Reuters

  )

• Nike tanks 20% to 4-year low following Q4 sales miss and FY25 guidance cut amid softness in lifestyle products and worse-than-expected China performance (

  Forbes

  )

CENTRAL BANKS

• Atlanta Fed President Bostic still anticipates rate cut in Q4 amid disinflation signs (

  Bloomberg

  )

• RBA Deputy Governor Hauser says mistake to base policy decision on single CPI print (

  Bloomberg

  )

GEOPOLITICS

• Biden underwhelms in debate with Trump (

  Bloomberg

  )

• US and European diplomats warn Hezbollah against striking Israel as IDF mulls operation into Lebanon (

  AP

  )

• Iran warns of 'obliterating war' if Israel launches large attack on Lebanon (

  NYT

  )

• Le Pen's far-right party bolsters its lead ahead of the first round of France's snap legislative election on Sunday (

  Bloomberg

  )

ECONOMY

• Fed’s preferred inflation gauge rises at the slowest pace in six months – May core PCE up 0.1% month-on-month, in-line with consensus (

  Bloomberg

  )

• China's factory activity falls for a second month in June while services activity slumps to five-month low (

  Reuters

  )

• UK GDP grew faster than expected in Q1 as consumer spent more (

  Bloomberg

  )

• Japan industrial production, Tokyo core inflation firmer than expected (

  Reuters

  )

• French inflation slows further in July as food and energy prices fall (

  Bloomberg

  )

ASX TODAY

• ASX 200 set to kick off FY25 on a weaker note and resuming last Friday's weakness (index finished up 0.1% from session high of 0.77%)

• July has historically (last decade) been the best performing month of the year, up an average 3.0% and positive 90% of the time

• Relatively uneventful overnight lead with downward pressure across a few sectors including Uranium (-2.1%), Lithium (-1.5%), Gold (-0.8%) and Biotech (-0.4%)

• Cettire responds to ASX query (CTT)

• Nine Entertainment staff express fury at the decision to announce 200 job cuts, including 70-90 in publishing – staff across The Age, SMH, AFR and WA Today pass a motion of no confidence in Nine Chief Executive Mike Sneesby and the Board (MEAA)

BROKER MOVES

• Amcor initiated Equal Weight with US$9.80 target (Wells Fargo)

• Insurance Australia downgraded to Overweight from Buy; target up to $.735 from $6.80 (Jarden)

• Lynas Rare Earths upgraded to Outperform from Underperform; but target cut to $6.55 from $6.85 (CLSA)

• Reliance Worldwide downgraded to Neutral from Buy; target cut to $4.50 from $5.05 (BofA)

• Southern Cross Electrical Engineering initiated Buy with $1.94 target (Moelis)

• Strike Energy downgraded to Underperform from Neutral; target remains $0.22 (Macquarie)

KEY EVENTS

Companies trading ex-dividend:

• Mon 1 July: Approximately 210 ETFs are trading ex-dividend. See a

  full list here

• Tue 2 July: Ricegrowers (SGLLV) – $0.45, Ram Essential Services Property Fund (REP) – $0.014

• Wed 3 July: Graincorp (GNC) – $0.24

• Thu 4 July: Clime Capital (CAM) – $0.014

• Fri 5 July: None

Other ASX corporate actions today:

• Dividends paid: ANZ Group (ANZ) – $0.83, CSR (CSR) – $0.12

• Listing: None

• Earnings: None

• AGMs: None

Economic calendar (AEST):

• 11:45 am: China Caixin Manufacturing PMI (Jun)

• 3:00 pm: Japan Consumer Confidence (Jun)

• 10:00 pm: Germany Inflation (Jun)

• 12:00 am: US ISM Manufacturing PMI (Jun)

This Morning Wrap was written by Kerry Sun.