Morning Wrap: ASX 200 futures flat, US markets give back early strength, Oil hits two-year low

US markets failed to bounce overnight, the US 2-and-10 year  yield turns positive as markets bet on more aggressive Fed rate cuts, US job openings hit a three-and-a-half year lows as labour market eases, commodity prices continue to sag lower on growth concerns and 

Let's dive in.

S&P 500 SESSION CHART

S&P 500 faded from session highs to finish near worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished lower and faded from positive territory

• Session highs for the benchmarks: Russell 2000 (+0.78%), Nasdaq (+0.59%), Dow (+0.58%) and S&P 500 (+0.44%)

• Market’s path of least resistance is lower amid “bad news is bad news” dynamic, renewed concerns about Yen carry trade unwind, stretched positioning, lingering selling pressure in Nvidia and negative September seasonality

• Commodities extended weakness after sharp selloff on Tue-Wed – Brent crude down 1.3% after undercutting US$75 for the first time since Dec-23 

• Iron ore sinks closer to lowest since 2022 on China's crisis-wracked steel industry (BBG)

• Goldman Sachs slashes copper forecast for 2025 (FT)

• US 2-and-10 year spread briefly turns positive as market bets on more aggressive Fed rate cut path (BBG)

• OPEC+ reportedly discussing delaying planned oil output hike in October (RT)

• US oil and gas M&A is approaching 2023 record with nearly US$100bn year-to-date (RT)

STOCKS

• DOJ issues subpoenas to Nvidia and others in antitrust probe (BBG)

• Volkswagen warns staff to adapt to lower demand (RT)

• Lyft to sell portion of bike business and cut jobs in effort to control costs (BBG)

• Volvo rolls back only EV plan to 2030 amid changing market conditions and cooling demand (CNBC)

• Dollar Tree shares plunge 22% after discounter cuts full-year forecast, citing increasing pressure on middle-and-higher income customers (CNBC)

• Zscaler shares tumble 16% after full-year guidance missed analyst expectations, macroeconomic challenges slowed cybersecurity spending (RT)

CENTRAL BANKS

• Bank of Canada cuts interest rates for a third straight meeting to 4.24%, Governor Tiff Macklem considers a larger cut amid weak growth (FT)

• China considering cutting rates on as much as $5.3tn of mortgages in two steps to reduce impact on banks (BBG)

• Fed's Bostic says Fed cannot wait until 2% inflation target hit before cutting (CNBC)

ECONOMY

• US job openings hit three-and-a-half year low of 7.67m vs. 8.1m consensus, healthcare and state/local government saw the biggest decreases while business services and federal government saw the largest increases (RT)

• China services PMI unexpectedly softens with firms reducing staffing levels (RT)

• China growth forecasts trimmed by analysts amid fading confidence (FT)

• Eurozone services PMI grows at fastest pace in three months (RT)

• Australian GDP growth in-line as consumers pull back on discretionary spending (BBG)

ASX TODAY

• ASX 200 futures set to open flat after a weak lead from Wall Street and continued commodity market weakness

• Don't get your hopes up for a bounce amid volatile market conditions, the local VIX spiked 21% on Wednesday to a three-week high of 13.6

• Challenger major shareholder Apollo seeking buyers for a 10.6% stake, the sale was underwritten at a floor price of $6.51 a piece (AFR)

• Star Entertainment’s banks push back against please for more short-term debt, arguing any new loan should be matched by government concessions (AFR)

WHAT TO WATCH TODAY

There's not a whole lot to look at – Pretty much everything overnight tried to rally in early trade but finished lower and near worst levels. It will be interesting to see if local sectors manage to finish flat or will the negative momentum drive them lower?

BROKER MOVES

• GPT upgraded to Overweight from Equal-weight; target up to $5.60 from $4.80 (MORG)

• JB Hi-Fi downgraded to Hold from Outperform with $77.45 target (CLSA)

• Orora upgraded to Overweight from Neutral; target up to $2.85 from $2.40 (JPM)

• Orora upgraded to Buy from Hold; target up to $3 from $2.40 (JEF)

• Premier Investments downgraded to Hold from Outperform; target up to $33.40 from $32 (CLSA)

• Webjet downgraded to Hold from Outperform; target $8.25 (CLSA)

• Whitehaven Coal re-initiated Overweight with $9.20 target (JPM)

• Woodside downgraded to Sell from Neutral; target cut to $24.50 from $25 (CITI) 

Stocks trading ex-dividend: 

• Thu 5 Sep: Reliance Worldwide (RWC) – $0.038, Ironbark Capital (IBC) – $0.013, Laserbond (LBL) – $0.008, Nib Holdings (NHF) – $0.14, Veem (VEE) – $0.008, Beacon Lighting (BLX) – $0.038, Monash IVF (MVF) – $0.025, SDI (SDI) – $0.019, Woodside (WDS) – $1.018, GTN (GTN) – $0.017, Helloworld (HLO) – $0.06, Origin Energy (ORG) – $0.275, Schaffer Corp (SFC) – $0.45, Sky Network (SKT) – $0.109, Amcor (AMC) – $0.19, Fleetwood (FWD) – $0.025, Resimac (RMC) – $0.035, Kina Securities (KSL) – $0.034, Monadewlphous Group (MND) – $0.33

• Fri 6 Sep: Summerset Group (SNZ) – $0.088, Smartgroup (SIQ) – $0.175, Cryosite (CTE) – $0.05, AUB Group (AUB) – $0.59, G8 Education (GEM) – $0.02, Generation Development (GDG) – $0.01, Aussie Broadband (ABB) – $0.04, Wisetech Global (WTC) – $0.092

• Mon 9 Sep: Objective Corp (OCL) – $0.09, Viva Energy (VEA) – $0.067, CSL (CSL) – $2.203, Hub24 (HUB) – $0.195, Super Retail Group (SUL) – $0.87, Australian Finance (AFG) – $0.04, Perseus Mining (PRU) – $0.037

• Tue 10 Sep: SG Fleet (SGF) – $0.243, News Corp (NWS) – $).107, Regis Healthcare (REG) – $0.066, Shriro Holdings (SHM) – $0.03, Bluescope Steel (BSL) – $0.30, Eagers Automotive (APE) – $0.24, Peet (PPC) – $0.028

• Wed 11 Sep: EVT (EVT) – $0.20, Kogan (KGN) – $0.075, Ive Group (IGL) – $0.085, Adairs (ADH) – $0.07, Dusk Group (DSK) – $0.04, Pepper Money (PPM) – $0.05, IDP Education (IEL) – $0.09, IGO (IGO) – $0.26, Qualitas (QAL) – $0.058, Brambles (BXB) – $0.289, Mercury NZ (MCY) – $0.127, Accent Group (AX1) – $0.045, LGI (LGI) – $0.013, Cue Energy (CUE) – $0.01, Finbar (FRI) – $0.08  

Other ASX corporate actions today: 

• Dividends paid: None

• Listing: None  

• Earnings: None

• AGMs: None

Economic calendar (AEST):

• 11:30 am: Australia Balance of Trade (Jul) 

• 12:00 am: US ISM Services PMI (Aug)