Morning Wrap: ASX 200 futures flat, S&P 500 bounces as bank worries and China trade tensions ease

ASX 200 futures are down 7 pts (-0.07%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks mostly higher as markets assess regional bank headwinds and easing China trade tensions

• Gold and other precious metals dipped following a massive run and potential peak FOMO

• Zip Q1 report, ASM cap raising and China Q3 GDP data today

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher, closed near best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks mostly higher after a wobbly start, closed near session highs

• Gold down sharply, with other precious metals including Silver (-4.2%), Palladium (-9.4%) and Platinum (-5.2%) also down sharply

• Markets reversed some of last Thursday’s weakness amid worries about rising credit stress at regional banks, analysts mostly believe challenges will be contained

• US weekly recap: Russell 2000 (+2.40%), Nasdaq (+2.14%), S&P 500 (+1.70%) and Dow (+1.56%)

• US regional banks dip amid concerns about bad loans, rising credit risk (BBG)

• Collapse of First Brands may be early sign of trouble in leveraged loan market (FT)

• Last Thursday's selloff triggered biggest options volume day ever, latest signal of retail traders support for market (CNBC)

• Wall Street upgrades profit expectations despite economic concerns, S&P 500 earnings revisions rise for five straight months (BBG)

• JGB market facing biggest net supply glut in two decades (NK)

STOCKS

• iPhone 17 driving strongest smartphone sales growth for Apple since 2020 (FT)

• Kering nearing sale of its beauty division to L'Oreal for around $4bn (RT)

• Auto industry facing multiple supply chain headwinds, including aluminum shortages, geopolitical chip export bans (WSJ)

• Zions and Western Alliance shares fall on loan fraud disclosure (YF)

• Micron exits China's server chip market after a ban, continuing sales in automotive and mobile sectors (RT)

TARIFFS

• Trump says proposal for 100% additional tariffs on Chinese exports is not sustainable, noted the US is "going to do fine with China" (RT)

• Trump extends exemption on imported auto parts, but imposes 25% tariff on imported trucks, 10% on buses (NYT)

• Treasury Secretary Bessent to meet with Chinese counterpart next week, could determine if Trump/Xi summit happens (FT)

• Chinese officials trying to ease concerns over rare earth curbs, said it will not harm normal trade flows (BBG)

• China's rare earth exports fell month-on-month last month by 800 tons to 7,338 tons (BBG)

• European autos warn of significant disruptions to production unless China and Netherlands quickly resolve dispute over Nexperia (RT)

CENTRAL BANKS

• BoE's Bailey says Brexit trade restrictions to have negative impact on UK economy for the foreseeable future (FT)

• Fed Governor Waller favors October rate cut amid concerns over weakening labor demand (FT)

• Fed's Kashkari believes labour market risks outweigh inflation concerns, cautions against overstating economic slowdown (RT)

GOVERNMENT SHUTDOWN

• GOP senators looking for more clarity on White House moves to fund military paychecks (TH)

• Health insurance prices for 2026 under ACA set to surge as subsidies remain key piece of shutdown negotiations (NYT)

ECONOMY

• China Q3 GDP likely grew at slowest pace of the year despite export boom, domestic weakness to offset any export contribution (BBG)

• S&P cut France's credit rating over expectations debt will rise higher than previously forecast (FT)

ASX TODAY

• Australian Strategic Metals seeking to raise $50 million for $1.20 a piece, shares have rallied 177% this month (AFR)

• Aura Energy MD Andrew Grove tenders his resignation (AEE)

• Elevra Lithium (formerly Sayona Mining) CFO Dougal Elder resigns to pursue other opportunities effective 20-Oct (ELV)

• Infratil to acquire TECT Holdings 4.92% shareholding in Contract Energy at NZ$8.95 per share, purchase price of NZ$437.7m funded via debt and new shares (IFT)

• Larvotto Resources holder United States Antimony Corp discloses 10% stake in the company (LRV)

• NRW Managing Director Julian Pemberton discloses sale of 4.0m shares, now owns 8.1m shares after the selldown (NWH)

• Zip reports Q1 revenue up 11.3% quarter-on-quarter to $318.5m, cash EBTDA up 98% year-on-yea to $62.8m, lifts buyback limit from $50m to $100m (ZIP)

WHAT TO WATCH TODAY

• Resources pullback: A heavy overnight session for several high-flying resources, with Silver (SIL) and Gold Miners (GDX) down 7.6% and 6.7% respectively, Uranium (URA) down 4.3%) and Rare Earth/Strategic Metals (REMX) down 1.8%. Looks like all the photos of shoppers lining up for physical gold/peak FOMO really set a bit of a near-term top?

BROKER MOVES

• Iluka Resources downgraded to Neutral from Overweight; target up to $7.25 from $6.75 (JPM)

Stocks trading ex-dividend: 

• Mon 20 Oct: Clover Corp (CLV) – $0.01, WAM Capital (WAM) – $0.077

• Tue 21 Oct: GQG Partners (GQG) – $0.04, WAM Alternative Assets (WMA) – $0.03

• Wed 22 Oct: None

• Thu 23 Oct: None

• Fri 24 Oct: None

Other ASX corporate actions today:       

• Dividends paid: COSOL (COS)

• Earnings: None

• IPOs: None

• AGMs: Tabcorp (TAH)

Economic calendar (AEDT):

• 1:00 pm: China GDP Growth (Q3)

• 1:00 pm: China Industrial Production, Retail Sales, Fixed Asset Investment (Sep)