Morning Wrap: ASX 200 futures flat, S&P 500 higher as chip stocks bounce, Oil prices ease

In a nutshell:

• Wall Street closed higher with the Nasdaq up 1.3% and the S&P 500 up 0.8%, both finishing near session highs as a sharp semiconductor rebound offset weakness in the AI hyperscalers, staples and energy stocks

• Chipmakers led the advance after Micron unveiled a US$3 billion domestic supply deal and SK Hynix drew heavy demand for its US listing, reviving the AI memory trade

• Staples underperformed on soft earnings from Pepsi and Costco, US and Iran continued to trade strikes, Hormuz traffic has come to a near halt and oil prices eased ~4% overnight

Let's dive in.

• Major US benchmarks finished higher and near best levels after a flattish start

• Momentum was a big outperformer on semis/tech strength, SOX up 3.0% but still down 11.5% from 22-Jun high

• Tech-led move has not stopped the broadening out trade, with Financials, Communications and Industrials posting solid gains

• Staples under pressure amid Pepsi (-3.2%) and Costco (-4.2%) earnings which flagged North American softness and inflation headwinds

• Oil prices pulled back, with Brent down ~4% to US$71.80 a barrel, but still up 5.6% in the last three sessions

• Morgan Stanley sees global M&A on track for ~US$6.4tn in volume for the year, topping 2021's record (RT)

• US equity funding costs jumped to 200 bp above fed funds rate in late June, highest since Dec-24 (RT)

• South Korea's leveraged ETF retail frenzy now drives over 70% of trading value (BBG)

• US Central Command said forces struck about 90 Iranian military targets on Thursday, including air defences and missile and drone sites, to curb Tehran's ability to threaten Strait of Hormuz shipping (CNBC)

• White House preparing for a prolonged Iran confrontation over the Strait of Hormuz (AX)

• Ship traffic through the Strait of Hormuz nearly halted after US strikes on Iran for a second straight day (BBG)

• Low stockpiles, still elevated petroleum products prices mean global oil market will have a hard time with another strait closure (WSJ)

• Thirteen tankers crossed yesterday compared with ~33 per day over the previous week (CNBC)

• SK Hynix's US listing more than 7x oversubscribed, long only and sovereign wealth funds among participants (BBG)

• SK Hynix's Friday IPO set to price at $149 per share, could raise ~$26.5bn (RT)

• Micron bumps up size of US investment plan by $50bn to $250bn, says New York semiconductor campus project ahead of schedule (RT)

• Micron closed up 4.5% after unveiling up to US$3bn of US semiconductor supply investment and a 10-year silicon wafer deal with GlobalWafers, helping spark a broad chip rally (YF) 

• Costco reports higher Q3 sales as it draws inflation-weary consumers, including to fuel pumps (WSJ)

• Pepsi Q2 revenue up 6.4% to US$24.1bn, guidance reaffirmed, management flagged tighter US consumer budgets on inflation and higher fuel, with international volumes carrying the quarter (BBG)

• Porsche deliveries fell 16% in the first half, including a 13% drop in North America (WSJ)

• KPMG UK cutting 10% of staff across its support teams, affecting approximately 200 back office roles (BBG)

• Chinese manufacturers leverage rare earths export restrictions to seize market share and move up industrial value chain (FT)

• Fed Williams said policy needs to remain data-dependent, sees labor market as strong, no signs of second-order inflation, though inflation remains too high (WSJ) 

• BOJ says Iran war may push more firms to raise prices later this year, reinforcing caution on inflation (RT)

• BOK Governor Shin reiterates need to raise interest rates amid inflation risks (BBG)

• PBOC reaffirms accommodative monetary policy amid weak domestic demand, external shocks (RT)

• US initial jobless claims fell to 215,000 for the week ended 4 July, below the 218,000 consensus and the lowest since late May, while continuing claims rose 8,000 to 1.814 million (CNBC)

• US existing home sales unexpectedly fell 2.4% month-on-month in June to a seasonally adjusted annualised 4.9m pace, against expectations for a gain (CNBC)

• Aroa Biosurgery CFO James Agnew resigns to pursue another opportunity. Will remain until end-November 2026 to ensure a smooth transition (ARX)

• Sandfire Resources updated Black Butte Copper PFS lifts mine life 50% to 12 years and cuts unit operating costs $2.28/t via addition of the high-grade Lowry Deposit. Post-tax NPV8 of US$126m (IRR 13.3%) at US$4.70/lb copper, rising to US$516m (IRR 26.3%) at US$6.00/lb. Construction capex held at US$474m (SFR)

• Resources bounce: Commodities traded broadly higher overnight, with notable gains for gold (+1.0%), platinum (+2.1%), copper (+2.1%), aluminium (+2.2%) and silver (+2.9%). Though Chinese lithium carbonate futures fell 5.3% to 153,020 yuan a tonne, now down 27% since early May. This'll mark a timely bounce for local miners, with the S&P/ASX 200 Materials Index bouncing off the key 200-day moving average on Thursday.

• SkinKandy initiated Overweight with $2.90 target (Jarden) 

Stocks trading ex-dividend: 

• Fri 10 Jul: Dominion Income Trust (DN1) – $0.598

• Mon 13 Jul: Beacon Minerals (BCN) – $0.255, Collins Foods (CKF) – $0.15, Sandon Capital (SNC) – $0.005, Turners Automotive (TRA) – $0.074

• Tue 14 Jul: Metcash (MTS) – $0.095

• Wed 15 Jul: None

Other ASX corporate actions today:       

• Dividends paid: Antam (ATM)

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

No major economic announcements.