Market Updates

ASX 200 up 40 points to 7324 (0.6%) in quiet trade again. Lacking conviction. Narrow range and once again banks leading the way higher, following US peers higher on NIM. CBA up 2.0%, ANZ up 2.0%, and the Big Bank Basket up to $180.15(2.0%). Insurers better too, QBE up 0.8% and SUN better. Money managers also in demand, ASX up 0.9% and MFG up 2.3%, with MQG rising 1.2%. REITS in demand after the drubbing yesterday, GMG missed out flat, SGP up 2.0% and MGR up 1.3%. Healthcare mixed, CSL up 0.4% after early losses, FPH up 0.7%. Industrials firmed WES up 0.5%, TCL up 0.2% and CPU up 2.1%. WOW and COL steady. ANN continued 2.5% lower after downgrades. Tech stocks better, WTC up 0.8% and XRO up 1.3%. The All-Tech Index up 0.6%. Resources were weaker again today, iron ore down in Singapore, BHP off 0.3%, RIO dropped 0.7% after production report pointed to production of IO at upper end of range. Base metal stocks going nowhere, gold stocks disappointing although DEG down 1.7% on management changes. Oil and gas better, WDS up 1.4% on production numbers, coal doing well as heatwave bites, WHC up 2.8%. In corporate news, ALD did well up 4.4%, on a strong business update, NST fell 5.8% on production numbers, and AEF FUM grows to $9.2bn. In economic news, the Westpac-Melbourne Institute Leading Economic Index in Australia rose 0.1%. Asian markets were mixed again, Japan up 1.2%, HK down 0.6%, China down 0.1%.

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All major US indices were up overnight, boosted by stronger-than-expected earnings results from heavy-weight banks and AI stocks. The Dow rose 367 points (+1.06%). Dow at worst down 55 points. Dow at best up 401 points. S&P 500 up 0.71%. NASDAQ up 0.76%. USD slid to a 15-month low before rebounding as futures point to a 99.2% probability that the Fed will hike rates by 25bps at its next meeting. US Treasury yields mixed. The yield inversion between 2Y and 10Y notes widened to -97.5 basis points. Among stocks, Morgan Stanley up 6.45%, their biggest one-day jump since November 2020, shrugging off the 14% fall in profit as growth in its wealth management business offset lower trading revenue. Bank of America up 4.42%, beating profit expectations.  

• ASX to open higher. SPI Futures up 39 points (+0.54%)

European markets rose on Tuesday, with pan-European indices reversing earlier losses and ending around best levels. STOXX 50 +0.3%, FTSE +0.6%, CAC +0.4%, and DAX +0.3%. Asian markets mixed, Japan’s Nikkei rose 0.59% with advances in bank and chip-related stocks. HK and China down 2.05% and 0.37% as bearish sentiment towards China equities take hold amid disappointing GDP data.

• Russell 2000 +1.27%
• Microsoft + 3.98%, hitting an all-time of $366.78 during the session after announcing a new AI Subscription service for Microsoft 365.
• US Retail sales rose 0.2% MoM in June, falling from 0.5% in May, below forecasts of a 0.5% rise.

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 ASX 200 slid 15 points to 7284 (-0.2%) after an early loss kicked on by RBA minutes reminding all that there could be more rate rises to come. Banks held up with the Big Bank Basket up to $176.79 (1%). NAB led the charge higher, up 2% with ANZ up 1.7%. Insurers too in demand, QBE up 0.4% and some buying in financial services with GQG up 1.3%. ASX continues to struggle down 0.2%. REITs slid with GMG off 1.1% and SGP hurt falling 2.4% as yields rose again. Industrials were also weaker, drifting lower, ANN off 14% on a cost pressure warning, TLS fell 1.9% with ‘Old Skool’ platforms lower, REA down 0.4% and CAR falling 1.3%. Consumer stocks also on the nose, ALL off 2.7%, QAN down 0.8% and WOW down 1%. Healthcare mixed, CSL finding a base up 2.2% on broker upgrades, RMD down 0.2% and SHL falling 1.2%. Tech stocks flat, the All- Tech Index down 0.04%. Resource stocks were again sold lower with BHP off 1%, RIO down 0.8% and IGO falling 3.8% on broker downgrades. Gold shares held up, just, lithium majors did ok, PLS up 1.2% and AKE better by 0.8%. Oil and gas sold down with WDS off 1.1% on a Sangomar project update.

In corporate news, ANN fell 14% on an update, AZJ off 5% as it held an investor day. SYR slipped 16.3% on its quarterly and IVC fell 3.7% as the TPG deal continues to drag.

On the economic front, ANZ Roy Morgan Consumer Confidence again down and RBA minutes suggest the RBA is far from done, but data dependent. Meanwhile Asian market slipped slightly, Japan back from Marine Day rose 0.2% and HK after a Typhoon day playing catch up down 1.8% with China flat. 10-year yields 3.97%. Dow futures up 2 points. NASDAQ futures down 21 points.

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US markets rallied over the possibility the Federal Reserve may soon conclude its rate-hiking campaign, while China’s economic data came in softer than expected. Dow Jones up 76 points (+0.22%). Dow at best up 156 points. Dow at worst down 90 points. S&P 500 up 0.39%. NASDAQ gained 0.93%. VIX +1%. US Treasuries were flat, 2Y yields dropping 0.9bps and the dollar softened with the USD Index falling 0.07% to 99.89. Oil continued to drop as China demand sentiment eased, as did commodities, Iron ore fell 0.51% and Copper fell 2.14%.

Activision rose 3.49% after holding “productive” talks with Microsoft +0.14% and British regulators, while Ford Motor Co fell 5.94% after cutting the sales price of their electric F150 truck.

• ASX to fall. SPI Futures down 20 points (-0.28%)
• Copper fell 2.14%, as China’s economic data continues to disappoint, sending all base metal prices lower.
• Nickel -2.91% Aluminium -0.81% Zinc -0.99, Lead -1.34% Tin -0.86%
• WTI Crude and Brent fell 1.68% and 0.64% over Chinese demand fears.
• 10Y Bond yields: US 3.81%, Australia 3.97%, and Germany 2.45%.

HEADLINES

• ASX to open lower; US earnings season looks solid, says BofA
• Wall St ends higher with earnings poised to ramp up.
• US stocks rise on earnings outlook, global shares dip on China data.
• Moscow halts grain deal in what UN says is a blow to people in need everywhere.
• Fed faces broader debate as it tees up rate hike.
• Yellen does not see recession in U.S.
• World economy in a difficult place but not destined to stay there - W.Bank chief.
• U.S. chip lobby presses Biden to refrain from further China curbs.
• Chip companies, top US officials meet on China policy.
• U.S. stocks rise on earnings outlook, global shares dip on China data.
• China's frail Q2 GDP growth raises urgency for more policy support.
• US bank mergers frozen by capital rules, regulatory uncertainty.
• Netflix shielded from Hollywood strike by global crew, strong pipeline.
• Race towards 'autonomous' AI agents grips Silicon Valley.
• US SEC developing rules on AI 'conflicts of interest'.
• Buffett cut Activision stake before judge approved Microsoft merger.

Catch up on the latest news with Henry Jennings’ Pre-Market Podcast.

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US markets closed out the week mixed on Friday as the US Q2 reporting season kicks off. Dow Jones up 114 points on Friday (+0.33%). NASDAQ -0.18%. S&P 500 -0.1%. All markets were higher for the week on softer-than-expected US CPI data followed by lower-than-expected PPI data, the lowest in three years. For the week, the Dow Jones was up 2.3%, the S&P 500 up 2.4% and the NASDAQ up 3.3%. The ASX 200 was up 261 points, up 3.7% for the week, recovering the previous week’s losses and then some.

• ASX to edge lower. SPI Futures down 2 points (-0.03%).

Q2 US reporting season kicked off Friday. Major U.S. banks, including JPMorgan +0.6%, Wells Fargo -0.3, and Citigroup -4.0%, reported increased profits due to higher interest rates, signalling a resilient economy. But they warned of risks ahead, such as declining consumer spending and mounting losses in credit cards and office commercial real estate. State Street -12.05% beat profit estimates but cautioned about a decline in net interest income due to lower deposits.

• Copper fell 0.12% after hitting a 3-week high last week.
• Nickel +1.79% Aluminium -0.24% Zinc -1.6%, Lead +0.09%, Tin -0.73%.
• WTI Crude and Brent fell 1.85% and 2.06% despite a Libyan Oil field closing due to production.
• 10Y Bond yields: US 3.83%, Australia 3.99%, and Germany 2.48%.

HEADLINES

• ASX to inch down with new era for RBA in focus.
• Yellen 'eager' to work with China on debt, other global challenges.
• Japan finance minister: "No discussion" of exchange rates at G7.
• India to push G20 to raise share of taxes on firms where they earn 'excess profit'.
• Taiwan ruling party pledges steady hand as opposition rallies.
• US, China aim to revive climate cooperation as tensions simmer.
• China's Xiaomi bets bigger on India retail stores amid Samsung rivalry.
• China economic data likely to show recovery is fading quickly.
• 'Heat storm' stretches into southern Europe, health alerts issued.
• Trade body considers calling for EU ban on Russian aluminium, but not Rusal.
• Black Sea grain deal still in Limbo.

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Why not sign up for a free trial? Get access to expert insights and research and become a better investor.

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Why not sign up for a free trial? Get access to expert insights and research and become a better investor.

Make life simple. Invest with Marcus Today.

Why not sign up for a free trial? Get access to expert insights and research and become a better investor.

Make life simple. Invest with Marcus Today.

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US markets closed higher overnight, extending gains for the second session and ending just off best levels after rallying the last hour of trade. Dow Jones up 317 points (+0.93%). Dow at best up 344 points. S&P 500 up 0.67% (+16.09% YTD). NASDAQ up 0.55%. Markets await US CPI data tomorrow and the official start of Q2 reporting season on Friday with the banks, which are expected to report higher profits in Q2 as rising interest payments offset a reduction in dealmaking. US 10Y yield fell 2.8bps to 3.978%, having broken below 4% the day before, while the 2Y yield rose 2.5bps, and the USD Index fell 0.24% to 101.66. Among stocks, Amazon rose 1.3% with its “Prime Day” 48-hour discount shopping event going this week, and Salesforce shares are up 3.9% after the firm said it would increase prices of some of its cloud and marketing tools for the first time in seven years.

• Russell 2000 +0.96%
• The likelihood that the Fed raises rates remains unchanged at 93%, up from 86.8% last week.
• Microsoft +0.2% gets US judge approval for US$69bn deal to buy videogame maker Activision Blizzard. FTC has until Friday to appeal the decision.
• Google 0.7% get hits with class action, which accuses Google’s data scraping of violating privacy and property rights.
• Energy stocks best-performing sector in the S&P 500, jumped along with sharply higher oil prices.
• Gold dropped 18%, slipping to a 2-month low ahead of US inflation tonight.
• Copper -0.64% Nickel -0.76% Zinc flat, Lead flat, Tin flat.
• WTI Crude and Brent gained 2.49% and 2.08% as OPEC announced that Global energy demand will increase by 23% by 2045.
• 10Y Bond yields: US 3.98%, Australia 4.17%, and Germany 2.65%.

Catch up on the latest news with Henry Jennings’ Pre-Market Podcast.

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