Wall Street ended higher overnight in a muted day of trade ahead of CPI data Wednesday. Dow Jones up 210 points (+0.62%). Dow at best up 223 points. Dow at worst down 29 points. S&P 500 up 0.24%. NASDAQ was little changed up 0.18%. VIX +1.62%. US treasuries were lower, 2Y yields continued to come off last week’s 5%+ highs, and the greenback softened with the USD Index falling 0.29% to 101.98. Oil eased on the increasing likelihood of more rate hikes, but crude supply cuts limited losses while iron ore continued to fall back toward US$100 a tonne. Among stocks, chip makers Intel +2.79% and Qualcomm +1.02% found support after US Treasury Yellen said over the weekend that meetings with senior Chinese officials were “direct” and “productive”.

• ASX to rise. SPI Futures up 43 points (+0.62%)
• Westpac Consumer Confidence at 10.30 am; NAB June Business Confidence and Conditions at 11.30 am.
• Gold flat overnight as the Fed signalled, they may be near the end of rate hikes.
• Copper rose 0.14%, steadying on a weaker USD.
• Nickel -0.08% Aluminium +0.14% Zinc flat, Lead +0.17% Tin -1.43%
• WTI Crude and Brent fell 1.16% and 0.82% as Iran signed a $27bn deal aiming to boost production.
• 10Y Bond yields: US 4.0%, Australia 4.2%, and Germany 2.63%.

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ASX 200closed down 38 points to 7004 (-0.5%) after a jump of 42 points at the opening bell, rebounding from last week’s sell-off before the market turned lower on weak consumer inflation data from China. Gold outperformed today, tracking an uptick in bullion prices. NST and NCM up 1.8% and 1.1%, respectively. Energy stocks jumped in early trade after oil prices rose sharply amid supply concerns before losing steam down 0.5%. BPT down 0.4%, STX gained 1.2% and KAR 2.3% higher. Tech stocks are in the green, with Info-Tech up 0.2%. XRO +0.9% WTC +0.2% and SQ2 +2.7%. Iron ore futures traded lower on the Singapore exchange dragging down our miners. FMG down 2.0%, BHP off 1.1% and RIO shed 1.1%. REITS slipped as bond yields rose. Big four banks all down. Big Bank Basket down to $168.26 (-0.2%). Defensive sectors underperformed. Healthcare stocks were mostly down, SHL down 0.6% and CSL off 1.0%. Insurers eased with QBE, MPL and AMP down 0.8%, 1.7%, and 1.0%.

In corporate news, ALG +13.5% on good results. GQG up 3.1% after reporting a $5.2bn increase in FUM in June. EMR +4.7% hits full-year production guidance, and BST off 0.8% following BBRC to acquire all remaining ordinary shares. In economics, Australia’s building permits rose the most in 9 months up 20.6%. China’s CPI unexpectedly came in flat YoY, and PPI was down 5.4% YoY marking the ninth month of producer deflation. Asian markets mixed, Japan down 0.5%, HK up 0.4%, snapping a three-day losing streak, and China flat. Australian bond yields rose to decade highs, 10Y yield up 2bps to 4.27%. Australian dollar down 0.6% to 66.47c. Dow Jones futures down 112 points and Nasdaq futures down 97 points.

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Stocks fell on Friday, and finished lower for the week, as Wall Street struggled to shake off fears that the Federal Reserve may start hiking rates again later this month.

The S&P 500 lost 0.29% to end at 4,398.95, while the Nasdaq Composite dipped 0.13% to close at 13,660.72. The Dow Jones Industrial Average dropped 187.38 points, or 0.55%, to settle at 33,734.88.

• Gold rose 0.71%, as US yields slip on further rate hike possibilities.
• Copper rose 1.07%, as USD falls making.
• Tin -0.63% Nickel -1.72% Aluminium +0.5% Zinc -0.59%, Lead -0.02%
• WTI Crude and Brent rose 3% and 2.56% as supplies tighten.
• 10Y Bond yields: US 4.06%, Australia 4.28%, and Germany 2.64%.

HEADLINES

• ASX to rise, global rates in ever sharper focus.
• Wall St Week Ahead-As earnings loom, investors weigh recession resilience.
• Global stocks index flat, Dollar falls on mixed U.S. jobs data.
• Yellen sees 'progress' in rocky US-China ties, expects more communication.
• Yellen urges China to support existing institutions to fight climate change.
• China sets wide-ranging rules for $2.9 trln private investment funds.
• Biden begins three-nation tour with stop in London.
• French central bank head warns against raising ECB inflation target.
• UK set to ease stock market listing rules.
• Meta's 'friendly' Threads collides with unfriendly internet.
• Twitter may face difficulties showing Meta stole trade secrets.
• Tesla rolls out customer referral incentive globally as EV price war heats up.
• Tesla wants EPA to finalize tougher vehicle emissions rules.
• Rivian's stock rallies to highest in 2023 after posting strong deliveries.
• Brilliant Brook and big-hitting Wood drag England back into Ashes series.

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 ASX 200 fell 121-points to 7042 (1.7%). Another soggy end to the week. ASX 200 down 2.2% for the week. Losses across the board from the open, banks hit hard with the Big Bank Basket down to $168.52 (-1.5%) led lower by CBA with MQG down 1.3%. Insurers dropped despite a huge rise in yields, QBE down 1.1% and IAG off 1.0%. Fund managers suffering from some downgrades and MFG losses again of 3.3%. REITs slid on higher rates, GMG down 3.8% and SGP off 2.7% with commercial real estate valuations under pressure. Healthcare was supposed to be defensive, wasn’t. CSL down another 2.1%, RHC off 1.3% and SHL down 1.5%. Industrials fell back to earth everywhere. WES off 3.0%, WOW down 1.2% and TLS falling 0.9%. Tech stocks under some pressure, WTC down 2.3% and XRO down 2.0% with the All-Tech Index down 2.1%. Miners were hit hard. Iron ore down, BHP down 1.8%, RIO off 0.7% and FMG down 0.4%. Gold miners fell, NCM down 2.6% and NST down 3.8%. Lithium stocks were patchy. PLS down 3.8% and IGO falling 3.0%. Oil and gas stocks drooped, WDS down 1.0% and STO off 1.5%.
In corporate news, IAG provided a reinsurance update, RSG flagged record production and AIS withdrew guidance on some seismic issues.
Nothing on the economic front as we await NFP tonight. Asian markets weaker, 10-year yields continue to soar up to 4.25%

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US markets closed sharply lower overnight in a broad sell-off after fresh jobs data indicated a strong labor market boosting yields and fanned fears that the Fed will be more aggressive in hiking rates. The Dow Jones fell 366 points (-1.07). Dow at worst down 517 points. S&P 500 posted its biggest daily drop since May, down 0.79%. NASDAQ down 0.82%. Wall Street’s fear gauge VIX jumped, up 8.9%. Gains in mega-cap tech stocks helped mitigate declines which ended above their session lows. Microsoft +0.92% and Apple +0.25%. Short-dated 2Y US treasuries rose above 5.0% for the first time since early March and touched their highest levels since June 2007. In currencies, the USD Index fell 0.20%

• ASX 200 to fall at the opening bell. SPI Futures down 90 points (1.26%)

European markets lower, slumping to their lowest level in three months as further interest rate hikes globally dented risk sentiment. STOXX 50 -2.9% FTSE -2.2% CAC -3.1%, and DAX -2.6%. Asian markets are also in the red, apart from India +0.52%. Goldman Sachs downgraded major Chinese banks over government debt concerns raising worries over a sector already under pressure from a sluggish property market and economic growth. The Hang Seng Mainland Index fell 2.69%.

• Gold dropped 0.35%, after better-than-expected private payrolls in the US.
• Tin rose 3.42%, hitting a 5-month high as worries around long-term supply sent the price higher.
• Copper -0.72% Nickel -0.09% Aluminium -0.4% Zinc +0.47%, Lead -0.48%
• WTI Crude and Brent almost flat overnight as tighter supplies were offset by the risk of US rate hike.
• 10Y Bond yields: US 4.03%, Australia 4.22%, and Germany 2.61%.

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Blood on the streets on ASX 200 today, closingdown 90 points to 7163 (-1.2%), as investors exercised caution after the FOMC meeting minutes reaffirmed expectations that interest rates would remain higher for longer. Financials and miners weighed, with the big four banks losing between 1%-2%. The Big Bank Basket took a hit down to $171.07 (-1.6%). Copper prices fell overnight as overseas data dampened demand outlook. BHP, RIO and FMG all lost over 1.4% each with iron ore dropping in Asia. Energy stocks fell while oil prices steadied as demand fears offset tighter supply forecasts. WDS off 1.4%, and STO down 0.5%. Tech stocks struggled for direction but finished up with the All-Tech Index up 0.2%. SQ2 surprised, jumping 3.9%, XRO +0.1% and WTC +1.0%. Defensive sectors were no good. Healthcare and telecoms both in the red, RHC down 1.4%, and TLS off 0.5%. REITS down as bond yields rose. Retailers hit hard WES -2.6%, DMP -3.2%, and MYR down 4.6%.
In corporate news, MFG -8.3% after it disclosed $2.1bn in outflows in June. BUB -2.2% disclosed the outcome of its strategic review. JLG completed $65m institutional placement. TIE -1.0% on Commercial production news.
In economic news, Australia's trade surplus exceeds expectations widening to $11.79bn in May 2023 from a downwardly revised $10.45bn in April. Asian markets are down, Japan’s Nikkei down 1.3% on tech pullback, HK down 3.1%, with mainland China off 0.6%. Australia's 10Y yield up to 4.13%. Dow Jones futures down 112 points, and Nasdaq futures down 70 points.

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US stocks closed lower overnight following July 4th Independence Day holiday as the market digests the latest FOMC meeting minutes, trade barriers from China and oil output cuts from OPEC+. The Dow Jones closed down 130 points (-0.38%). Dow at worst down 191 points. S&P 500 down 0.2% NASDAQ fell 0.18, and the VIX rose 3.5%. Chip stocks fell after China said it would control exports of some metals widely used in the semiconductor industry as tensions rise between Beijing and Washington over access to high-tech microchips. Intel shares fell 3.3%, and the Philadelphia SE Semiconductor Index fell 2.2%. US treasuries edged higher after a softer-than-expected reading on US-made goods, and the US greenback gained as the likelihood the Fed raises rates by another 25bps at its next meeting rises to 88.7%.

• ASX to open lower. SPI Futures down 37 (-0.51%).
• China's chipmaking export curbs 'just a start', Beijing adviser warns before Yellen visit.
• US says it opposes export controls by China on metals, will consult allies.
• Yellen's China visit aims at 'new normal' with Beijing.
• A united U.S. Federal Reserve agreed to hold interest rates steady at the June meeting.
• New orders for U.S.-made goods increased less than expected in May.
• Euro zone business activity contracts in June -PMI.
• MSCI's global equities index lost ground on weaker-than-expected overseas data.
• ChatGPT, the AI chatbot, saw monthly traffic decline for the first time in June.
• Russia-Saudi oil cooperation is still going strong as part of the OPEC+ alliance.
• Exxon signals sharp profit drop, cites low natgas prices, refining margins.

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ASX 200closed down 26 points to 7253 (-0.4%), letting go of yesterday’s gains, snapping a three-day advance. Financials weighed on the market, with significant losses in the banking sector. NAB -0.8% CBA -0.5%, ANZ -0.8% and WBC -0.7%. Big Bank Basket down to $173.81 (-0.6%). Resources and base metals were mixed, with commodity prices falling as the commodity outlook turned negative, BHP -0.4%, RIO flat, and S32 +1.1%. Energy stocks mixed as oil prices eased, AGL +2.4%, hitting a 52-week high in the morning, while STX finished flat, and WDS fell 0.4%. Lithium mostly down, Canadian lithium darling PMT jumped 15% in early trade after it flagged high-grade lithium processing  before closing up a mere 2.5%. Tech closed in positive territory, All-Tech Index up 0.2%. REITs finished higher as bond yields dipped, GMG up 0.1%.

In corporate news, UBS upgraded TLS to buy, up 1.2%. JLG, signed two agreements to acquire Smoke Alarms Australian and Link Fire Holdings. RED -4.9% despite hitting production guidance. BGL rose 4.1% on a signed agreement with GMD to process material from BGL’s mine.

In economic news, Ai Group Australian Industry Index fell to -11.9 in June from -10.9 in May. China services PMI fell to 53.9 in June from 57.1 in the previous month. Asian markets are down as weak manufacturing and services data amplified market concerns about a global economic slowdown, Japan flat, HK off 1.4%, and China down 0.6%. 10Y yield down to 4.0%. Dow Jones futures down 49 points, and Nasdaq futures down 29 points.

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Global stock market trading was light overnight, with US markets closed for the Independence Day holiday. European markets muted in thin trading overnight, with indices ending around session lows. STOXX 50 -0.2% FTSE -0.1% CAC -0.2%, and DAX -0.3%. US equity futures flat with markets closed. Asian markets mixed overnight. Hang Seng led gains in China, up 0.57%, as mainland equities finished flat. Japan’s Nikkei 225 fell from its highest level since 1990, down 0.62%, while the Japanese Yen hovers near an eight-month low.

ASX to open lower. SPI Futures down 12 points (-0.17%).

Among stocks, Meta lost its fight against a German data curb order as Europe’s top court backed the German antitrust watchdog’s power also to investigate privacy breaches. Apple infringed two telecommunications patents used in iPhones and iPads, London’s Court of Appeal ruled overnight, dismissing the appeal from a long-running dispute with the US patent holder. Microsoft is likely to face a European Union antitrust investigation in the coming months after discussions with the EU watchdog to avert such a move have hit a roadblock. Meanwhile, Telsa achieved record deliveries of their China-made vehicles in Q2, totalling 247,217 EVs, the most since it started delivering vehicles from Shanghai in early 2020.  

• German 2Y bond yields near 15-year highs as debt markets ready for rates to rise further and stay higher for longer.
• Pfizer announced two deals with Samsung Biologics worth a combined $897m which will see the biotech division of Samsung manufacture biosimilar products ranging from oncology and inflammation to immunotherapy for the US pharmaceutical giant.
• China imposes export controls on gallium and germanium products, seen as a retaliatory measure in the US-China tech dispute, leading to concerns of potential curbs on rare earth exports; companies rush to secure supplies, and semiconductor firms consider alternative materials.
• Gold continued up 0.19%, waiting to see if the fed will hold rates.
• Copper dropped 0.41% overnight on a gloomier economic outlook.
• Nickel -0.63% Aluminium +0.37% Zinc ++1.22%, Lead +0.07%, and Tin -0.66%.
• Brent rose 1.55% as as Saudi Arabia extended its voluntary output cut, while Russia and Algeria also reduced their output and export levels for August. The total cuts amount to more than 5 million barrels per day, or 5% of global oil output.
• Domestic data: Judo Bank Services PMI, Ai Group Industry Index.
• Japan data: Jibun Bank Services PMI.
• China data: Caixin Services PMI.

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The ASX 200rallied 33 points to 7279 (+0.5%), bouncing back from 7,232 lows following the RBA’s decision to hold rates at 4.1%. The Aussie dollar fell 0.2% to 66.58c, and the 2Y yield was virtually unchanged, up 1bps. Gold miners are happy, buoyed by stronger bullion prices. EVN up 1.8%, NST gained 1.6%, NCM up 1.2%. Iron ore miners mixed as US manufacturing PMI fell, and optimism was buoyed by the RBA, BHP lower 0.1% and RIO down 1.2%. Lithium was mostly up as PLS gained 2.2% and SYA rose 3.0%. Base metal stocks rose on the back of higher copper prices overnight. Banks had a good day. Big Bank basket closed up at $174.87 (+1.3%), led by CBA up 1.3% and NAB up 1.3%. Energy stocks were in demand thanks to Saudi Arabia and Russia cutting oil production, sending prices higher, WDS up 1.4%, WHC gained 2.4%, and BPT rose 1.1%. Healthcare under pressure, RMD down 1.3% and SHL off 0.8%, while insurers found support QBE gained 1.0% and MPL up 1.7%. In corporate news, CGC jumped 12.8% after receiving a takeover bid, EMR up 5.9% on gold discovery, SUN gained 0.6% despite announcing the cost of reinsurance premiums to increase more than $250m in FY24, IVC down 0.2% after extending TPG exclusivity offer, and SLR gained 5.8% on record quarterly sales results. In economic news, the RBA decided to leave the cash rate unchanged at 4.1%. Further tightening may be required, but the decision to hold provides the board more time to assess the state of the economy and economic outlook and associated risks. Asian markets down. Japan down 0.6% on profit-taking, while HK is on track for a third consecutive day of losses, down 0.1%, and China off 0.2%. Australia 10Y yield up to 4.01% after a steep fall on the pause announcement. Bitcoin down 0.33%. Dow Jones futures down 10 points and Nasdaq futures down 18 points.

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