Morning Wrap: ASX 200 futures flat, S&P 500 extends losing streak to a fourth day

ASX 200 futures are down 10pts (-0.11%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks lower but off worst levels (e.g. S&P 500 down -0.83% vs. session low of -1.47%)

• Solid breadth, with the Equal-weight S&P 500 (+0.01%) outperforming the cap-weighted benchmark by 84 bps

• Discretionary (-2.50%) and Tech (-1.68%) sharply lower, but sectors like Energy (+0.61%), Healthcare (+0.54%), Real Estate (+0.36%) bounced

• Nvidia to report quarterly results tomorrow morning, analysts already expecting a big beat and guidance upgrade, while options market pricing in a ~7% share price move

Let's dive in.

S&P 500 SESSION CHART

S&P 500 lower but off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks mostly lower, though off worst levels

• S&P 500 logged its fourth straight decline, though the Equal-weight S&P 500 finished breakeven (+0.01%)

• Bitcoin up 0.9% to US$,92,920, reversing earlier declines of ~3% but still down 26% from its 6-Oct record high

• Stocks struggled to hold intraday highs, though a clear rotation is taking place given the solid breadth and gains from sectors like Energy, Healthcare, Real Estate and Staples

• No major catalyst behind today's session, markets still in a fragile state amid technical breakdowns, unwind triggers for systematic longs, AI skepticism, consumer and labour market cautiousness

• Nvidia results tomorrow morning, with most analysts expecting another big beat and guidance upgrade as demand for AI compute continues to meaningfully exceed supply

• Options market is pricing in a $350bn market cap swing, or 7% share price move, on Nvidia earnings (RT)

• Bitcoin now down ~30% from its 2025 peak, now struggling to keep pace with Treasuries (BBG)

• S&P 500's move below 50-day moving average fuels concerns market could head into correction (BBG)

• Japan stocks and bonds dipped amid diplomatic tensions with Beijing and worries over fiscal health and tech valuations (BBG)

• Bitcoin's drop below US$90,000 intensified selling pressure in Asia's markets (BBG)

BofA SURVEY

• BofA’s latest Global Fund Manager Survey remained broadly bullish, with sentiment at its highest since February, equity allocations at a nine-month high, cash down slightly to 3.7% and the Bull & Bear Indicator steady at 6.3.

• Managers sharply cut discretionary exposure, marking the biggest reduction since 2005 and the lowest weighting since December 2022, while tech exposure saw its largest drop in eight months.

• Long Mag 7 was identified as the most crowded trade, overtaking gold as the top consensus position.

• The AI bubble was viewed as the biggest tail risk, rising to 45 percent of respondents.

• A net 20% of investors said companies are overinvesting for the first time since August 2005, driven by concerns about an AI related capex boom.

• Looking to 2026, 42% expect international equities to outperform, compared to 22 percent for United States equities.

• For the S&P 500, 43% of investors expect a year end level between 7,000 and 7,500 which implies gains of 5 to 12 percent.

STOCKS

• Anthropic valued in range of $350 billion following investment deal with Microsoft, Nvidia (CNBC)

• Google unveils Gemini 3, eight months after introducing Gemini 2.5; now has 650M MAUs (CNBC)

• Alphabet chief Sundar Pichai says nobody would emerge unscathed if AI spending boom collapses (QZ)

• Alphabet chief Sundar Pichai says he sees 'elements of irrationality' in the AI boom (TH)

• Cloudflare successfully restores services after outage caused by an automatically generated configuration file (RT)

• Activist investor Elliott Investment Management has built a significant stake in Barrick Mining (RT)

• Apple's iPhone captured one in four smartphones sold in China in October with 37% sales increase (RT)

TARIFFS

• China's rare-earth exports fell to 6,173 tons in October, the lowest since June amid trade negotiations (BBG)

• Traders are piling into new market wagering Trump tariffs will be ruled illegal (BBG)

• India says close to finalising first phase of US trade deal focused on reciprocal tariffs (BBG)

CENTRAL BANKS

• Fed Governor Barr cautions scale-back of supervision will make it harder for regulators to prevent build-up of excessive risk (BBG)

• Fed's Barkin strike optimistic tone on inflation though warns labor market may be weaker than available data shows (BBG)

• Fed Governor Waller reiterates support for December rate cut, citing weak labor market (CNBC )

• RBA minutes show board sees conditions to keep cash rate on hold at coming meetings (RT)

ECONOMY

• US initial jobless claims reached 232,000 for w/e 18-Oct while continuing claims rose slightly to 1.957 million (BBG)

• China government spending in October fell by most since early 2021, indicating waning fiscal support (BBG)

ASX TODAY

• Nufarm reports FY25 underlying EBITDA of $302.5m vs. $295.8m ests, underlying net loss of -$22.9m vs. -$13.2m ests, no specific FY26 guidance but expects "strong" underlying EBITDA growth (NUF)

• Sandfire Resources believed to be interested in BHP’s West Musgrave nickel project (The Aus)

• Webjet receives non-binding indicative takeover from Helloworld Travel at 90 cents per share or a 19% premium to last close (WJL)

• Webjet reports 1H25 results in-line with preliminary announcement last week (which triggered a 17% selloff), reaffirms FY26 adjusted EBITDA margin of $30-32m (WJL)

WHAT TO WATCH TODAY

• Rotation dynamics: Quite a high-beta/value/defensive rotation overnight. There was the same relative outperformance for ASX sectors on Tuesday, with Staples (-0.20%), Healthcare (-0.52%) and Utilities (-0.74%) vs. ASX 200 (-1.94%). Wonder if this trend will continue today.

• Gold vs. other commods: Gold finished the session up 0.57% (vs. session low of -1.15%). Energy also strong (S&P 500 Energy Index up 0.80% overnight and oil prices pretty much unchanged in the past week). Though most other commodities like copper and aluminium now on a four-day skid and starting to trade at 3-4 week lows.

BROKER MOVES

• Lynas Rare Earths upgraded to Buy from Neutral; target up to $17.80 from $15.10 (UBS)

• Lynas Rare Earths upgraded to Buy from Neutral; target up to $16.60 from $13.70 (GS)

• Sigma Healthcare initiated Buy with $3.40 target (UBS)

• Steadfast Group downgraded to Neutral from Outperform; target cut to $4.90 from $7.00 (MQG)

• TechnologyOne upgraded to Overweight from Equal-weight; target up to $36.50 from $29.30 (MS)

• TechnologyOne upgraded to Overweight from Neutral but target lowered to $35 from $38.50 (JPM)

Stocks trading ex-dividend: 

• Wed 19 Nov: None

• Thu 20 Nov: None

• Fri 21 Nov: N1 Holdings (N1H) – $0.003, Orica (ORA) – $0.32

Other ASX corporate actions today:       

• Dividends paid: None

• Earnings: Nufarm (NUF)

• IPOs: None

• AGMs: EML Payments (EML), IGO (IGO), Medibank Private (MPL), Ridley Corp (RIC), Seek (SEK)

Economic calendar (AEDT):

• 6:00 pm: UK Inflation (Oct)

• 6:00 am: US FOMC Minutes