Morning Wrap: ASX 200 futures flat, S&P 500 lower as investors pivot out of tech

ASX 200 futures are down 5pts (-0.05%) as of 8:30 am AEDT.

  In a nutshell:

• Major US benchmarks modestly lower and closed near worst levels

• Equal-weight S&P 500 (+0.12%) outperformed the official benchmark by 28 bps as sectors like Healthcare (+1.27%), Utilities (+0.88%), Discretionary (+0.48%) and more finished higher

• Rotation dynamics continued to play out amid persistent AI bubble/financing/ROI concerns

Let's dive in.

S&P 500 SESSION CHART

S&P 500 chopped around session lows (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks lower and closed near session lows, this follows a broad selloff last Friday where the S&P 500, Nasdaq and Russell 2000 all fell more than 1%

• Equal-weight S&P 500 (+0.12%) higher as rotation dynamics continue to play out, with several value and defensive sectors trading higher while Tech (-1.0%) continued to fall

• Investors await key US data to determine Fed rate outlook, notably the early release of November nonfarm payrolls on Wednesday (BBG)

• Weaker US jobs could boost stocks by increasing likelihood of more Fed rate cuts, says Morgan Stanley’s Wilson (BBG)

• YTD rally in US transport stocks to near all-time highs boosts economic confidence (WSJ)

• Global deal values jump ~40% to $4.5tn this year, the second-highest on record (BBG)

STOCKS

• Oracle signs $150bn of data centre leases in November quarter, preparing for surge in cloud demand (TI)

• OpenAI hires Google executive to lead company's M&A (TI)

• Ford intends to repurpose Kentucky EV plant into battery plant for energy storage (BBG)

• Roomba maker iRobot files for bankruptcy, shares down 99% from 2021 highs, devices to continue to function normally during restructuring (WSJ)

TARIFFS

• Nvidia considering increasing H200 production capacity due to strong China demand (RT)

CENTRAL BANKS

• Hassett says Trump can offer advice, but his views wouldn't influence Fed decisions under his chairmanship (BBG)

• Hassett’s candidacy for Fed Chair has received pushback from high-level people close to Trump due to concerns he is too close to the president (CNBC)

• Fed's Williams sees rates as modestly restrictive, expects economy to pick up steam in 2026 (YF)

• Fed's Miran says underlying inflation is close to target, policy is too restrictive (FT)

• Boston Fed's Collins says rate cut was "a close call," seeks greater clarity before adjusting further (BBG)

• Market prepares for BOJ hike later this week amid positive wage growth and continued yen weakness (NK)

• BoE set to cut rates to 3.75% as unemployment rises and growth stalls, easing inflation concerns (BBG)

ECONOMY

• China's slowdown deepens in November as consumption, investment and industrial output all miss expectations (BBG)

• China's property prices decline in November, continuing downward momentum as authorities vow stability (BBG)

• China's Vanke creditors reject bond-delay proposals, default risk rises as payment looms (BBG)

• Japanese manufacturing sentiment hits four‑year high, reinforcing BOJ rate hike expectations (BBG)

• Eurozone industrial output accelerates in October, as trade fears ease and consumption rises (RT)

ASX TODAY

• Southern Cross Electrical Engineering subsidiaries receive range of awards in data centre and rail sectors worth $90m (SXE)

WHAT TO WATCH TODAY

• Not a whole lot: A fairly quiet morning, where US indices remain relatively directionless, though some strength emerging in ex-Tech sectors. Most of our overnight ETFs finished lower, with notable declines from Uranium (again, down ~9% in the last two sessions), Fintech and Strategic Metals.

• Morning wrap changes: The Morning wrap will undergo some slight changes early next year, including i) a link to an explainer/list for the overnight ETFs; ii) change country indices to actual index names (e.g. Hong Kong vs. Hang Seng), iii) replace irrelevant ETFs on the watchlist (e.g. Cleantech, Sports Betting, Video Games), iv) add relevant ETFs (only one addition that is Data Centres). Nothing crazy, just some slight tweaks. If you have anything in mind/feedback, feel free to reach out/reply to this email.

BROKER MOVES

• WA1 Resources initiated Buy with $26.30 target (GS)

Stocks trading ex-dividend: 

• Tue 16 Dec: Plato Income Maximiser (PL8) – $0.006, Whitefield Income (WHI) – $0.006

• Wed 17 Dec: Wam Income Maximiser (WMX) – $0.004

• Thu 18 Dec: None

• Fri 19 Dec: None

Other ASX corporate actions today:       

• Dividends paid: Dyno Nobel (DNL), Fisher & Paykel (FPH), Infratil (IFT)

• Earnings: None

• IPOs: None

• AGMs: Orica (ORI)

Economic calendar (AEDT):

• 9:00 am: Australia S&P Global Manufacturing PMI Flash (Dec) 

• 9:00 am: Australia S&P Global Services PMI Flash (Dec)

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

• 6:00 pm: UK Unemployment Rate (OCT)