Market Updates

Wall Street ended virtually flat overnight ahead of a big week of tech earnings, Fed interest rate decisions and US labour data all due this week. The Dow slid 49 points (-0.12%). S&P 500 and NASDAQ finished near flat, up 0.08% and 0.07%, respectively. Small caps Russell 2000 underperformed, down 1.09% and Wall Street's ‘fear gauge’ the VIX rose 2.41%. Mcdonald's shares gained 3.7% despite reporting a surprise drop in sales, its first in 13 quarters, as executives pledge to launch new promotions. Telsa jumped 5.6% after Morgan Stanley added it to its “top pick” US autos list. Bitcoin hit seven-week highs before easing a touch resulting in some choppy trading in Crypto stocks. Coinbase fell 3.59%, while Marathon Digital and Riot Platforms fell over 5% each. US treasuries barely budged. 10Y yield eased 2.3bps, and 2Y yield rose 1.6bps. Markets are expecting a Hold from the Fed this week, while the consensus is that the Fed will cut in September, with the probability sitting at 88.7%, according to CME FedWatch tool.  

ASX to slip. SPI Futures down 55 points (-0.69%).

COMMODITIES

• Union at BHP's Escondida mine urges rejection of contract offer, strike possible.
• Trump effect in clean tech sector deepens angst in Europe's boardrooms.
• Aluminium at 4-month low on short positions buildup, high inventory.
• Gold slips as dollar gains, traders eye Fed meeting.
• Dalian iron ore pares losses on better China data, stimulus hopes.
• Oil falls 2% as Israel seeks to avoid broader Middle East conflict.

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ASX 200 rallies another 68 points to 7990 (0.9%). Big week with Dow futures showing a positive start to the week. Banks and industrials once again the star of the show as CBA lifted another 1.3% with the Big Bank Basket up to $230.61 (1.0%). ANZ lagging, falling 1.2%, as the bond trading scandal hold buyers back. Insurers strong again and financials in demand, MQG up 1.2% and ASX up 1.3%.  REITS doing well again, GMG up 2.1% and SGP pushing 1.1% higher. Healthcare better except RMD falling 2.1% as US falls reverberate, CSL up 1.1% and PME up 2.1%. Tech stocks better too following Nasdaq higher , WTC up 2.2% and the All-Tech Index up 1.5%. Resources were flat with no real follow through, BHP, FMG and RIO relatively unchanged after early gains faded. Lithium patchy, as was uranium and rare earths. Gold miners were mixed NST up 0.9% and EVN down 0.3%. Oil and gas pushed higher on higher crude prices. Uranium stocks eased with PDN falling 2.2% and BOE slipping on news it had tried to buy Jabiluka. In corporate news, KGN raced ahead before crashing back to earth, down 0.9%. Nothing on the economic front, some news from APRA on mortgage buffers. Asian market strong. 10-year yields steady at 4.28%.

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US equities closed out the week on a positive note recouping some ground lost earlier in the week, boosted by inflation data raising optimism for a September rate cut. The Dow rallied 654 points (+1.64%), buoyed by gains in 3M up 22.9% its largest daily gain in decades after it raised the lower end of its profit forecast. The S&P 500 closed 1.11% higher, and the NASDAQ gained 1.03%, aided by rebounds in mega cap tech stocks. Meta leading gains for the Magnificent Seven, up 2.7%. Rotation into small caps continues. Russell 2000 rose 1.67%, and Small Cap 600 rose 1.81%. In economics, PCE data showed prices increased moderately in June. PCE up 0.1% MonM, and 2.5% YonY. Core PCE rose 0.2% MonN, and 2.6% YonY. Additionally, consumer spending and income advanced 0.3% and 0.2%, respectively. Treasury yields fell. 10Y yield fell to a one-week low down 4.9bps, and the 2Y yield fell 5bps. Bitcoin joined the rally, up 2.9%, while the USD Index ended flat, down 0.03%.

ASX SPI up 60 points

COMMODITIES

• Chile's Codelco says output falls 8% in first half of 2024.
• Vale on track to hit top end of iron ore guidance, upbeat on China.
• Citi expects copper to recover to $9,500/t within three months.
• Copper set for third weekly decline on Chinese demand woes
• Oil falls 1.5%, ends week lower on China demand fears.
• Gold rises as yields slip after US data lifts rate-cut hopes.

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ASX 200 rallies 60 points to 7928 (0.8%) as iron ore rallies and China throws some money at stimulus. The ‘Three Amigos’ all spurted ahead, BHP up 2.2%, RIO jumps 2.8% and FMG more muted post quarterly only up 1.0%. Lithium stocks got a lift from EV stimulus, PLS up 3.8% and MIN up 3.5% on quarterly. Some short covering adding to gains. Gold miners crashed as BGL returned, down 21.6%. NST dropped 3.2% with PRU off 3.1%. Oil and gas a little firmer, KAR up 5.8% on research WDS up 0.3% and some buying in uranium appeared. Banks were again a little better, WBC up 0.9% and the Big Bank Basket up to $228.30 (0.4%). MQG saw a 1.5% rally as brokers hoped for a 2H rebound. Insurers did well, QBE up 2.5% and SUN up 1.2%. REITs improved, GMG bouncing 1.1% with SGP up 1.4%. Industrials firm across the board, WES up 1.0%, TCL up 0.6% and retail powering ahead still. PMV up 1.7% with JBH 1.0% ahead. Tech stocks better, WTC up 1.5% and XRO up 1.1%. The All-Tech Index up 0.3%. In corporate news, NEC is facing strikes from staff on eve of Paris Olympics. Nothing on the economic front but US PCE tonight. Asian markets little changed as China moves again to try and stimulate.

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Wall Street ended mixed overnight, following its worst performance since 2022 yesterday as markets began to doubt the sustainability of the AI-driven rally. The Dow edged 81 points higher (+0.20%). Up 585 points at best. Down 36 points at worst. The Russell 2000 gained 1.26% recouping most of the previous days' losses. Approximately 300 companies in the S&P 500 advanced, but the index fell 0.51%, falling below 5,400. The S&P 500 is now down ~5% from its all-time high. The NASDAQ lost 0.93%, weighed down by losses in mega-cap tech stocks. In economics, US Q2 GDP showed the economy grew at 2.8% QonQ, significantly above expectations of 1.9% and the prior quarters 1.4%. Initial jobless claims dropped more than expected by 10k, and US durable goods orders unexpectedly fell 6.6% MonM in June after four consecutive monthly increases. Longer dates treasury yields fell on GDP numbers. 10Y yield fell 4.1bps, while the 2Y yield finished near flat. USD Index flat, and Bitcoin up a touch. In Asia, Chinese blue chips stocks the Shenzhen fell 0.22% and Hong Kong's Hang Seng 1.77%, finding little support from Beijing's latest easing step.

ASX to rise. SPI futures up 33 points (+0.42%).

• Oil edges higher on upbeat US economic data.
• Gold hits over 2-week low as investors book profit; US data in focus.
• Iron ore drops further as strong supply, China steel sell-off weigh.
• Copper falls below $9,000 level, prompting Chinese buying.
• Brazil government mulls 'tougher measures and sanctions' on Vale, minister says.
• Anglo American has a job to exit post-BHP hole.

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ASX 200 falls 103 points to 7861 (-1.3%) on US tech falls and quarterly disappointments. Banks held up relatively well as the Big Bank Basket fell to $227.50 (-0.4%). NAB down 0.9% and MQG falling 3.4% on its AGM update showing weakness on deal flow still. MFG bucked some weakness in the sector, insurers eased slightly. REITs got sold down, GMG down 3.1%, leading losses, GPT up 0.9% and VCX unchanged. Industrials fell across the board, WES dropped 2.9%, with TCL off 1.9% as tech stocks fell hard, WTC down 3.2%, and XRO off 3.5%, with the All-Tech Index down 1.8%. Utilities also under a little pressure, ORG off 1.5% and AGL down 1.0%. Resources stuck to the playbook and fell despite a cut to some rates again in China. BHP down 0.9%, and FMG cratering 5.5% on its quarterly and a potential jump in unit costs. Gold miners slid as bullion dipped, EVN down 3.4% and GMD off 2.3%. Lithium stocks weaker again, PLS slid 0.7% and LTM off 2.2%. Oil and gas back in the red, WDS down 1.4% and STO off 3.2%, with uranium stocks easier too. PDN down 3.7%, and DYL off 4.6%. In corporate news, the ANZ bond trading scandal is getting more serious, NST down 0.4% on its quarterly. SEK wrote down its Chinese investment in Zhaopin by $141n. In Asia, Japan clobbered down 3.0%, with HK off 1.7% and China off 0.5%. Nothing locally on the economic front. 10Y yields steady around 4.31%. US GDP tonight.

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Stocks sold off Wednesday, weighed down by underwhelming reports from Tesla and Alphabet, leading the S&P 500 and the Nasdaq Composite to post their worst session since 2022. The broad market index lost 2.31%, closing at 5,427.13, while the tech-heavy Nasdaq slid 3.64% to end at 17,342.41. The Dow Jones Industrial Average lost 504.22 points, or 1.25%, closing at 39,853.87.

 The U.S. PMI flash manufacturing output index fell to 49.5 in July, unexpectedly slipping into contraction territory as new orders, production and inventories declined.

Bank of Canada cuts rates again.

ASX SPI Down 75 points.

• Gold rises on softer dollar, traders eye more US data.
• Oil prices finish higher as US oil, fuel inventories ease.
• Copper falls to 3-1/2-month low on high inventory, selling by funds.
• Dalian iron ore extends falls on weakening steel market, demand outlook.
• Newmont beats profit estimates on higher gold production.
• Anglo to face investors with wary eye on BHP's potential return.
• Chile's lower house of Congress asks Boric to void Codelco-SQM deal.
• US refiners' Q2 profits fall on low margins, soft fuel demand.

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ASX 200 down 7 points in range-bound trade as we watch and wait (for what?) The index fell to 7964 (-0.1%), with banks steady, CBA down slightly, the Big Bank Basket at $228.39 (0.1%). Insurers did well, QBE up 0.4% and SUN up 1.3%. REITS got whacked led lower by GMG down 2.1%. Industrials a little mixed, TCL fell 0.4%, with WOW and COL modestly lower, tech slipped slightly, WTC off 1.2% and SEK down 1.1%, with CAR off 1.4%. Resources found some love finally, FMG up 0.5% and PLS unchanged on quarterly numbers. Gold miners green across the screen. EVN up 4.1% and NST up 2.4% as AUD fell below 66c. Oil and gas eased again, WDS down 1.1%, uranium stocks down again, PDN off 2.2%, and BOE falling 2.2%. In corporate news, plenty of quarterlies, FLT fell 4.7% on narrower guidance, TLX fell 7.2% on a convertible hedge trade. PPT lost 0.7% on latest FUM numbers, and PTM put on 0.9% on fund restructure. Nothing on the economic front locally. Asian markets lower again, Japan down 1%, China off 0.4% and HK eased 0.6%. 10Y yields steady at 4.33%

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Wall Street finished broadly lower, ending near worst levels before Tesla and Google kicked off the “Magnificent Seven” reporting season after the closing bell. The Dow Jones closed 57 points lower (-0.14%). Up 112 points at best. Down 96 points at worst. The S&P 500 lost 0.16%, and the NASDAQ was flat. Small caps outperformed. The Russell 2000 gained 1.02%, and the VIX edged lower.  Telsa fell 2.0% before results and is currently down 7.0% in after-hours trade after the company reported its lowest profit margin in more than five years and missing earnings expectations. Google rose 0.1% before results, now down 1.56% in after-hours trade despite beating Q2 revenue and profit estimates. US treasuries are down a touch following a weak housing market report and a strong 2Y note auction. USD rose 0.12%, and bitcoin gained 0.21%.

Tesla drops 7.4% after hours on quarterly. Alphabet modestly lower.

ASX to inch higher. SPI Futures up 11 points ( +0.14%).

COMMODITIES

• Iron ore hits three-month low on bleak China demand outlook.
• Oil prices fall 2% to six-week low on ceasefire talks, demand concerns.
• Copper hits multi-month low on growing Chinese demand fears.
• Gold gains ground as investors eye US data for Fed clues.
• BHP must stop funding legal action to halt Mariana dam claim, court rules.
• API shows weekly US crude, fuel stockpiles fell, market sources say.

Recent editions of PRE-MARKET REPORT   
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Tuesday, 23 Jul 2024  
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Friday, 19 Jul 2024  
Thursday, 18 Jul 2024  
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Tuesday, 16 Jul 2024  
Monday, 15 Jul 2024  
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Thursday, 11 Jul 2024  
Wednesday, 10 Jul 2024  

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ASX 200 rises 39 points to 7671 (0.5%). Banks and industrials lead the market back from Monday’s loss. CBA up 1.1%, NAB up 1.2% and the Big Bank Basket up to $228.53 (1.1%)  Insurers and other financials also doing well. QBE up 0.5% and SOL up 0.9%. REITS a little mixed, GMG down 1.0% but others firm. Healthcare stocks also in demand, CSL up 1.0% COH up 2.9% and RMD up 1.7%. Supermarkets saw sellers, WES up 1.9% and TCL up 1.3% on Brisbane news. Tech stocks ran, the All -Tech Index up 1.4% with WTC and XRO up around 2%. Resources were once again the drag, iron ore stocks fell, FMG down 1.4% with RIO off 0.6% and the gold sector under some pressure as risk wanes. NST down 1.4% with EVN off 1.9%. Lithium stocks remain out of favour as do rare earths, new entrant AXL collapsed 37.5%  on listing., Oil and gas under pressure as WDS lost 3.7% after disappointing with quarterly and broker review following acquisition. Uranium continues to lose its gloss. In corporate news, LYC quarterly fails to impress, PNV up 7.9% on quarterly revenue jump. SPR jumped 23.6% on a reserve upgrade, and ARU locks in debt funding.  Nothing on the economic front today. Asian markets a little weaker, Japan unchanged, HK unchanged and China down 1%. 10 -year yields 4.34%.
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