Morning Wrap: ASX 200 futures flat, S&P 500 posts four-day losing streak, Oil and silver prices rally

ASX 200 futures are up 7pts (+0.08%) as of 8:30 am AEDT.

In a nutshell:

• S&P 500 and Russell 2000 down for a fourth straight session, Nasdaq gave back yesterday's small bounce and now down 3.8% in the last four sessions

• Overall, US market feels rather heavy, with very selective upside and continued weakness among AI and tech-related sectors

• Strong session for commodities, with silver (+4.0%) and gold (+0.9%) continuing to trend higher, copper (+1.2%) back within 2% of recent all-time highs, oil bouncing off multi-year lows and more

Let's dive in.

S&P 500 SESSION CHART

S&P 500 trended lower to close at worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks lower and closed at session lows

• S&P 500 and Russell 2000 down for a fourth straight session, Nasdaq gave back yesterday’s small bounce and now down 3.8% in the last four sessions

• Equal-weight S&P 500 was briefly up 0.69% but finished 0.29% lower, still showing relative outperformance as some cyclical sectors tick higher

• Today’s big story – Credit default swaps on Oracle’s debt have surged above 150 bps, doubling from early-October levels amid concerns over the company’s ability to deliver recently announced data centre buildouts

• Oracle is now down 50% from its record high on 10 September as the cost of protection against default is at its highest since 2009 

• US market feels rather heavy as upside becomes increasingly selective, with clear selling among AI and tech-related sectors 

• Brent bounces off multi-year lows, back above US$60 a barrel after Trump announced blockade of all sanctioned oil tankers entering or leaving Venezuela, also preparing new sanctions on Russian energy if Putin rejects a Ukraine peace plan

• Medline shares jump ~30% after $6.3bn IPO, largest debut of 2025 (FT)

• JPMorgan withdraws $350bn from Fed to buy Treasuries, as they seek to secure higher yields before rate cuts (FT)

• China markets considered investable again, but wariness persists amid weak economy (BBG)

STOCKS

• Amazon in discussions to invest ~$10bn in OpenAI, valuation now sits over $500bn (TI)

• Warner Bros. Discovery to reject Paramount's $108bn bid, claiming it is inferior to Netflix's proposal (BBG)

• Apple's next generation of Siri set for launch next year is expected to be key hurdle amid stiff AI competition (CNBC)

• Robinhood is rolling out NFL parlay and prop bets on prediction markets platform (CNBC)

• Alphabet's Waymo in talks to raise more than $15bn in latest financing round, valuing company near $100bn (BBG)

• Ford cancels $6.5bn EV battery deal with South Korea's LG Energy Solution (RT)

• China chipmaker MetaX surges 700% in trading debut, retail component of IPO was 2,986x oversubscribed (BBG)

TARIFFS

• US and Japan to review energy projects as potential first investments in $550bn joint fund (BBG)

CENTRAL BANKS

• Fed's Waller says he favours more rate cuts in 2026, would 'absolutely' defend Fed independence (YF)

• Fed Bostic reiterates inflation should remain priority for policymakers (BBG)

ECONOMY

• UK inflation was 3.2% in November vs. 3.5% ests, lowest in eight months, strengthens case for tonight's BoE rate cut (BBG)

• Australian government raises inflation forecast to 3.75% for year to June 2026 but plans to keeps spending intact (RT)

ASX TODAY

• APA to divest 20% equity of GDI (owns Allgas gas distribution network) to Stonepeak, selldown to generate $64m (APA)

• Bapcor CEO Angus McKay resigns, Chris Wilesmith (former CEO of Jaycar, and Mitre 10 New Zealand) appointed as CEO from 14-Jan (BAP)

• Netwealth agrees to pay over $100m in compensation and admits it contravened the Corporations Act in relation to the First Guardian Master Fund (NWL)

• Treasury Wine Estates could become a private equity target given the recent share price decline (The Aus)

WHAT TO WATCH TODAY

• More weakness: A relatively ugly overnight session as major US benchmarks continued to roll over. The main pockets of strength was Energy (oversold bounce), miners and defensives (staples and real estate), which is a positive read through for the ASX. Commodities performed generally well overnight, with most major ones ticking higher, though risk-off sentiment might not see equities/miners move the way they should.

BROKER MOVES

• Deep Yellow initiated with Neural rating and $1.85 target (GS)

• Paladin Energy initiated with Neutral rating and $9.05 target (GS)

Stocks trading ex-dividend: 

• Thu 18 Dec: None

• Fri 19 Dec: None

Other ASX corporate actions today:       

• Dividends paid: Beacon Minerals (BCN), ResMed (RMD)

• Earnings: None

• IPOs: Equus Energy (EQU) at 12:00 pm

• AGMs: ANZ (ANZ), Elders (ELD)

Economic calendar (AEDT):

• 11:00 pm: Bank of England Interest Rate Decision (Ests: 25 bp cut to 3.75%)