Morning Wrap: ASX 200 to bounce, Wall St recovers from worst week of 2024

ASX 200 futures are trading 78 points higher, up 0.97%, as of 8:30 am AEST.

Major US benchmarks bounced from their worst week of the year, the market is unsure whether or not the Fed will cut 25 or 50 bps in September and China's producer prices continued to deflate in August.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher, finished near session highs (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished higher and near best levels

• Market looking to rebound after worst week for S&P 500 in 18 months, driven by growth fears, pullback in 50 bp rate cut odds and seasonality headwinds

• Market is pricing in a ~27% likelihood of a 50 bp cut despite elevated growth concerns after weaker-than-expected August payrolls and fears the Fed is behind the curve

• Bond yields dipped lower, with the US 2-year trading at the lowest since Sep-22 and US 10-year at the lowest since Jun-23

• Copper prices bounced after selling off 3.3% last week, WTI crude up 1% after falling 8%  last week to the lowest since Jun-23 

• September already living up to its reputation as a tough month for stocks (WSJ)

• BofA strategists expect utilities to continue to outperform, citing higher volatility and falling interest rates (BBG)

• Traders question pace of forthcoming Fed rate cuts after jobs data (BBG)

• Morgan Stanley's Wilson says US stocks at risk of further unwinding on yen carry trade if Fed goes for jumbo rate cut (BBG)

• Iron ore selloff deepens amid sustained pressure from tepid Chinese demand and gathering worries over global growth (Bloomberg)

• Oil rebounds from lowest close since 2021, Morgan Stanley cuts oil forecast (BBG)

STOCKS

• Huawei receives ~3 million pre-orders for tri-fold phone ahead of Apple's iPhone 16 reveal (RT)

• Apple announces new products, confirms Apple Intelligence available in Oct (BBG)

• Google antitrust trial begins today with prosecutors alleging company stymied competition in online ad tech (RT)

• 7-Eleven parent says would be open to discussions with Circle K owner if the latter improves its US$39bn takeover bid (FT)

POLITICS & GEOPOLITICS

• Preview of Trump vs Harris debate: Focus will be on taxes, healthcare, immigration, abortion access, foreign affairs and other topics (NY Times)

ECONOMY

• China consumer inflation edges up while factory-gate prices stuck in deflation (BBG)

• UK labor market cools as job placements drop and wage growth slows (RT)

• Japan GDP data keeps BOJ rate hike in play while current account surplus reaches new record high (BBG)

• Mexico's inflation decelerated in line with expectations, more rate cuts in play (BBG)

ASX TODAY

• ASX 200 to continue yesterday's bounce (closed -0.32% from session low of -1.18%)

• KKR mull ditching consortium bid for a 74.25% stake in Queensland Airport (AFR)

• Newmont's Havieron and Telfer project divestment under advanced negotiations with Greatland Gold (AFR)

• ResMed shares tick higher after Apple announces sleep apnea detection on new Watch Series 10 (CNET)

• Steadfast Group rejects allegations in ABC news article about brokers ‘misleading’ customers (SDF)

WHAT TO WATCH TODAY

The market is set to bounce after a couple of rough days but the path of least resistance continues to be lower amid a long list of worries. Can the market find its footing or will we see 1-3 days of green followed by further weakness?

Nothing stands out from the overnight session. Most of the ETFs on our overnight watchlist bounced around 1% but most of them (e.g. Uranium, Copper, Gold, Biotech etc) are down around 5-10% this month.

BROKER MOVES

• Cooper Energy upgraded to Overweight from Neutral; target remains $0.23 (JPM)

• Northern Star initiated Add with $16.90 target (MORG)

Stocks trading ex-dividend: 

• 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  

• Thu 12 Sep: Spark New Zealand (SPK) – $0.128, Austin Engineering (ANG) – $0.008, BHP (BHP) – $1.092, McMillan Shakespeare (MMS) – $0.78, Navigator Global (NGI) – $0.044, Earlypay (EPY) – $0.002, Nine Entertainment (NEC) – $0.045, CTI Logistics (CLX) – $0.055, Perpetual (PPT) – $0.53, Atlas Pearls (ATP) – $0.01, Air New Zealand (AIZ) – $0.012, Cash Converters (CCV) – $0.001, TPG Telecom (TPG) – $0.09, PWR Holdings (PWH) – $0.092, Freightways (FRW) – $0.173, XRF Scientific (XRF) – $0.039, Breville Group (BRG) – $0.17

• Fri 13 Sep: Grange Resources (GRR) – $0.005, Ramelius Resources (RMS) – $0.05, FFI Holdings (FFI) – $0.125, Lovisa (LOV) – $0.37, Kelsian (KLS) – $0.095, Ariadne (ARA) – $0.005, Car Group (CAR) – $0.385, SKS Technologies (SKS) – $0.01, Data#3 (DTL) – $0.129, Cleanaway (CWY) – $0.025

Other ASX corporate actions today: 

• Dividends paid: Bell Financial Group (BFG), Shape Australia (SHA)

• Listing: None  

• Earnings: None

• AGMs: None

Economic calendar (AEST):

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

• 11:30 am: Australia Business Confidence (Aug)

• 1:00 pm: China Balance of Trade (Aug)

• 4:00 pm: UK Unemployment Rate (Jul)