Morning Wrap: ASX 200 futures flat, Wall Street ekes out narrow gain, Eyes on Middle East

ASX 200 futures are trading 3 points higher, up 0.03%, as of 8:30 am AEST.

US markets finished marginally higher after a rocky open, Middle East tensions and cautious trading dominated sentiment, China stocks surged post-holiday, the Yen dipped after dovish comments from Japan's new Prime Minister and corporate updates from Nike, Tesla, and Ford disappoint.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 breakeven, finished well above worst levels (Source: TradingView)

OVERNIGHT MARKETS

• US benchmarks finished marginally higher, but well-off session lows

• Today’s big story – A relatively uneventful session as markets shrugged off recent Middle East developments, US port strike and underwhelming updates from Nike and Tesla

• Middle East flare up rekindles flight to safety but with no clarity on how it will evolve, markets trade cautiously (RT)

• Hong Kong-listed China shares surge after holiday (BBG)

• China real estate support measures fueling speculative buying of beaten down property developers (BBG)

• Narrowing Japan yield gap seen heralding long-term trend of capital repatriation (BBG)

• Yen plunges after Japan's new prime minister said economy isn't ready for another rate hike from central bank (BBG)

STOCKS

• Nike shares dip 6% after Q1 sales down 10.4% year-on-year but better-than-expected gross margins helped drive an almost 35% EPS beat, Q2 guidance came in light and the company pulled FY25 guidance due to CEO transition (RT)

• Tesla deliveries up year-on-year for first time in 2024 but still below analyst estimates (FT)

• Ford becomes latest US automaker to report weaker growth in domestic new vehicle sales in Q3 (RT)

• Boeing cuts healthcare coverage for ~33k workers as machinist union strike continues in Pacific Northwest (YH)

• Amazon to roll out more ads across Prime Video platform next year in add-supported streaming push (FT)

• Apple preparing to announce new low-end phone early next year alongside upgraded iPads (BBG)

• European automakers most affected of dock strikes due to reliance on East and Gulf Coast ports (RT)

CENTRAL BANKS

• BOJ's Ueda sent dovish signals regarding policy outlook in his first speech since incoming PM Ishiba (BBG)

• ECB's Kazaks signals October rate cut but aggressive easing bets may clash with stagflation risks (RT)

POLITICS & GEOPOLITICS

• Israel vows retaliation following Iranian missile barrage (FT)

• Israel readying "significant" response to Iran missile barrage, could involve targeting oil facilities (AX)

• Iranian Revolutionary Guard warns of 'crushing attacks' if Israel responds to Iranian missile strikes (CNN)

• White House says Iran to face severe consequences for missile attack against Israel (WP)

• White House and Trump show support to striking dock workers (BBG)

ECONOMY

• US private payrolls printed 143k vs. consensus 125k, job creation showed widespread rebound after a five-month slowdown, manufacturing added jobs for the first time since April (RT)

• Easing homebuying restrictions has led to spike in buying interest in China's top-tier cities (BBG)

• China railway network sees record travelling in first week of long holiday, signalling pickup in spending (BBG)

• South Korea inflation below 2% for first time since early 2021 (RT)

• South Korean factory activity slides to lowest since Jun-2023 (RT)

ASX TODAY

• Pilbara Minerals block trade worth $271m crosses at a 4% discount, sources say the trade was likely from China’s Ganfeng (AFR)

• Qatar Airways believed to have paid ~$750m for 25% stake in Virgin Australia, should provide valuation floor for expected IPO (The Aus)

WHAT TO WATCH TODAY

• Not a whole lot going on: A relatively uneventful overnight session and quiet morning as far as announcements are concerned.

• Boxes & Burritos: Goldman is 'cautiously optimistic' on the Quick Service Restaurants outlook. The analysts released a note overnight citing a Buy for Collins Foods, citing expectations that costs will moderate, discretionary spending will improve and European businesses will reach scale. Guzman y Gomez was hit with a Sell due to 'overly ambitious' long-term expansion plans and a stretched valuation.

• Energy: Keep an eye out for Middle East developments. Israeli Officials told Axios that they may initiate a "major retaliation" against Iran's middle strike, potentially targeting oil facilities.

BROKER MOVES

• Arcadium Lithium initiated Add with $5.40 target (Morgans)

• Audinate initiated Hold with $10.50 target (Moelis)

• Car Group upgraded to Overweight from Neutral; target up to $40 from $33.50 (JPM)

• Collins Foods initiated Buy with $10 target (GS)

• Endeavour Group downgraded to Neutral from Buy; target cut to $5.30 from $5.80 (BofA)

• Guzman y Gomez initiated Sell with $33.20 target (GS)

• Objective Corp initiated Buy with $17.60 target (Moelis)

• Pantoro initiated Speculative Buy with $0.16 target (Canaccord)

Stocks trading ex-dividend: 

• Thu 3 Oct: ARB Corporation (ARB) – 0.75%, Myer (MYR) – 0.60%, New Hope Corporation (NHC) – 4.21%, Qualitas Real Estate Income Fund (QRI) – 0.69%

• Fri 4 Oct: None

• Mon 7 Oct: Ridley (RIC) – 1.82%

• Tue 8 Oct:  Clime Capital (CAM) – 1.66%, MFF Capital Investments (MFF) – 1.81%, Perenti (PRN) – 3.77%, Reece (REH) – 0.64%

• Wed 9 Oct: Naos Emerging Opportunities (NCC) – 4.76%

Other ASX corporate actions today: 

• Dividends paid: Adrad (AHL), Bega Cheese (BGA), BHP Group (BHP), Centrepoint Alliance (CAF), CTI Logistics (CLX), Enero Group (EGG), Fleetwood (FWD), Humm Group (HUM), Integral Diagnostics (IDX), Lifestyle Communities (LIC), Pacific Current Group (PAC), Propel Funeral Partners (PFP), Qualitas (QAL), Seek (SEK), Sports Entertainment Group (SEG), Supply Network (SNL), Teaminvest Private Group (TIP), and Woodside Energy Group (WDS)

• Listing: None

• AGMs: Australian Foundation Investment Co (AFI), Perenti Global (PRN), Mirrabooka Investments (MIR)

Economic calendar (AEST):

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

• 12:00 am: US ISM Services PMI (Sep)