Morning Wrap: ASX 200 futures flat, S&P 500 hits fourth straight record close

ASX 200 futures are trading 8 points lower, down -0.10% as of 8:30 am AEST.

The S&P 500 and Nasdaq had another record setting day after cooler-than-expected US producer price data and bumper earnings from Broadcom.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 recovered from midday weakness to close near session highs (Source: TradingView)

OVERNIGHT MARKETS

• US stocks finished mixed but not far off best levels after some midday weakness

• Breadth remains a concern – Nasdaq 100 is up 3% so far this week and traded higher on all four trading days but breadth has been 50/50, according to Bespoke

• Broadcom (+12.2%) is the latest AI bright spot after topping Q2 earnings expectations and upgrading its FY24 guidance – AI semiconductor revenue of US$3.1bn was up 35% quarter-on-quarter and 280% year-on-year

• Market struggled for momentum despite more signs of disinflation momentum from cooler-than-expected US PPI data – poor breadth, cyclical underperformance and upcoming buyback blackout period remain the key areas of concern 

• Bond yields down for a fourth straight session – the US 2-year closed at its lowest level since 5 April

• Traders push up odds of September Fed rate cut following CPI report (Bloomberg)

• Latest US inflation data could support stock market laggards (Reuters)

• Private credit funds have raised over US$13bn in US investment grade corporate bond market this year, pacing toward record (Bloomberg)

STOCKS

• Tesla extends gains after Musk says shareholders voting yes for his US$56bn pay package (Bloomberg)

• Apple not paying OpenAI as part of partnership, sees mutual benefits derived from distribution (Bloomberg)

• OpenAI has more than doubled annualized revenue in last six months (The Information)

CENTRAL BANKS

• Fed now projects one rate cut in 2024 from three previously (Bloomberg)

• Powell sends mixed interest rate signal (FT)

• ECB's Nagel says core inflation "still very sticky", stresses meeting-by-meeting approach to cuts (Bloomberg)

• BOJ to discuss tapering JGB purchases at Friday's meeting (Bloomberg)

GEOPOLITICS

• G7 members reach deal to provide US$50bn to Ukraine using profits from frozen Russian assets (FT)

• NATO says over 300,000 troops are now on 'high readiness' (Economic Times)

• Hezbollah says it attacked nine Israeli sites with rockets, reportedly largest attack on Israel since war began (Reuters)

• Biden administration extremely concerned about risk of all-out war between Israel and Hezbollah (Axios)

• US expands Russia sanctions to undercut its war machine, targeting chips sent via China (Reuters)

• China EV stocks shrug off EU tariff decision (Bloomberg)

ECONOMY

• US PPI unexpected fell in May to 2.2% vs. consensus 2.5%, core PPI unchanged month-on-month vs. expectations for a 0.3% rise (Reuters)

• Eurozone industrial production unexpectedly fell at the start of Q2, with intermediate goods driving decline (Bloomberg)

• Australian unemployment rate falls, markets pare RBA rate cut expectations (Bloomberg)

ASX TODAY

• ASX 200 set for a relatively flat start following a mixed overnight lead (where strength remains concentrated to a handful of megacap tech stocks)

• Commodity prices were relatively weak overnight after the US dollar bounced 0.5% to a near six week high

• Overnight resource-related ETFs (Rare earths, gold, silver, nickel, copper etc.) continued to roll over, pointing to a weak start for local names

• Chemist Warehouse deal can still get past ACCC health check (AFR)

• Deterra to buy UK-based Trident Royalties for $276m (DRR)

• Downer EDI seeking to sell its 30% stake in Linen Services (AFR)

• Winsome Resources seeking to raise $20m at 85 cents per share (AFR)

BROKER MOVES

• Champion Iron upgraded to Buy from Outperform; target up to $7.90 from $7.20 (CLSA)

• Corporate Travel upgraded to Buy from Hold; target down to $16 from $17.50 (Jefferies)

• Jumbo Interactive upgraded to Outperform from Neutral; target up to $17.45 from $17.15 (Macquarie)

• Lottery Corp upgraded to Outperform from Neutral; target up to $5.50 from $5.25 (Macquarie)

• Reece Australia initiated Sell with $23.35 target price (Goldman Sachs)

• Telix Pharmaceuticals upgraded to Buy from Hold; target remains $19 (Bell Potter)

Companies trading ex-dividend: 

• Fri 14 June: None

• Mon 17 June: None

• Tue 18 June: Premier Investments (PMV) – $0.63

• Wed 19 June: Afp Pharmaceuticals (AFP) – $).01 

• Thu 20 June: None

Other ASX corporate actions today: 

• Dividends paid: Technology One (TNE) – $0.05, Nufarm (NUF) – $0.04 

• Listing: Resouro Strategic Metals – 10:30 am AEST

Economic calendar (AEST):

• 10:30 am: Australia Consumer Confidence (Jun)

• 1:00 pm: BOJ Interest Rate Decision 

• 12:00 am: US Consumer Sentiment (Jun)