Morning Wrap: ASX 200 to ease from record highs, all eyes on Fed decision

ASX 200 futures are trading 39 points lower, down 0.47%, as of 8:30 am AEST.

Sorry about the late one! The local sharemarket is set to retreat from all-time highs, ahead of the highly anticipated Fed rate decision at 4 am on Thursday.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 finished around breakeven, well-off best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished mixed overnight, with the S&P 500 trading slightly above breakeven after briefly peeking above its 16-Jul record high

• Today’s big story – Another quiet session ahead of tomorrow morning’s FOMC meeting, with the market still debating whether the Fed will kick off its cutting cycle with a 25 or 50 bp move

• BofA’s latest Global Fund Manager Survey – Global sentiment improved for the first time since June with 79% expecting a soft landing, two-thirds say recession is unlikely despite China growth optimism at a three-year low, cash levels down 0.1pp to 4.2%, rotation away from cyclicals into bond sensitive sectors like Real Estate, Tech overweight smallest since April-23 and commodities allocation at seven-year low

• Markets now pricing in ~64% chance of 50 bp Fed rate cut (FT)

• Goldman Sachs says AI pessimism excessive, sees buying opportunity amid falling interest rates, earnings growth (BBG)

• Iron ore seen falling further with supply needing to drop to help balance market (AFR)

• ETF focused on value stocks pacing for best month this year on bets of a rotation following Fed rate cut (BBG)

• Oil hedges surged by third-most on record last week after Brent selloff (Bloomberg)

STOCKS

• Microsoft unveils US$60bn buyback, raises quarterly dividend by 10% (BBG)

• Intel unveils cost cutting and restructure plans (FT)

• Boeing freezing hiring and weighs temporary furloughs to cut costs as strike continues (RT)

• Walmart-owned Sam's Club plans to raise hourly wages for ~100,000 workers ahead of the holiday season (RT)

• Newmont says on track to get US$2bn from asset sales, according to COO (Bloomberg)

CENTRAL BANKS

• Size of incoming Fed rate cut still in doubt (WSJ)

• Traders ramp up bets on BoE cut, following increase in bets on jumbo Fed cut (FT)

POLITICS & GEOPOLITICS

• Trump to capitalise on second assassination attempt as Harris advances in polls (BBG)

• Senior US officials travel to Beijing this week for a round of high-level meetings (WSJ)

• US and Japan close to deal that would curb tech exports to China, Tokyo remains concerns about risk of Chinese retaliation (FT)

• EU weighing up to €40B in new loans for Ukraine after efforts to freeze Russian assets failed (FT)

ECONOMY

• US August retail sales up 0.1% MoM vs. expectations of a 0.2% decline, largely driven by miscellaneous store retailers, online stores and health/personal care (RT)

• German ZEW investor morale for September weakest in nearly a year (BBG)

• Singapore electronic exports log fastest growth in 14 years (BBG)

ASX TODAY

• Healius major shareholder Tanarra Capital pushing for Healius to cancel Lumus Imaging business sale unless it can be sold for at least $825m (AFR)

• Peter Warren Automotive shareholder UniSuper ups stake to 11.75% from 8.97% (PWR)

• Webjet shareholders vote in favour of demerger of Webjet B2C from Webjet and name change to Web Travel Group (WEB)

BROKER MOVES

• Cooper Energy initiated Overweight with $0.24 target (WILSON)

• Origin upgraded to Outperform from Neutral; target up to $10.43 from $10.12 (MQG)

• NAB upgraded to Overweight from Equal-weight; target up to $38 from $34.20 (MS)

• New Hope upgraded to Add from Hold; target cut to $5.20 from $5.45 (MORG)

• Platinum Asset Management upgraded to Neutral from Underweight; target up to $1.05 from $0.90 (JPM)

• Select Harvest upgraded to Buy from Hold; target up to $4.95 from $4.40 (BP)

• Westpac upgraded to Equal-weight; target up to $29.70 from $26.50 (MS)

Stocks trading ex-dividend: 

• Wed 18 Sep: Flight Centre (FLT) – $0.30, Adrad (AHL) – $).016, Sports Entertainment Group (SEG) – $0.02, Supply Network (SNL) – $0.33, Service Stream (SSM) – $0.025, Auckland International Airport (AIA) – $0.059  

• Thu 19 Sep: Mader (MAD) – $0.04, Auswide Bank (ABA) – $0.11, Embelton (EMB) – $0.20, Tourism Holdings (THL) – $0.046, Midway (MWY) – $0.161, South32 (S32) – $0.046, Motorcycle Holdings (MTO) – $0.07, IPD Group (IPG) – $0.062, Count (CUP) – $).022, Enero Group (EGG) – $0.02, NRW Holdings (NWH) – $0.09, Lycopodium (LYL) – $0.40

• Fri 20 Sep: Inghams (ING) – $0.08, Vita Life Sciences (VLS) – $0.035, Capitol Health (CAJ) – $0.004, Eureka Group (EGH) – $0.007, Blackwall (BWF) – $0.025 

• Mon 23 Sep: Bisalloy Steel (BIS) – $0.115

• Tue 24 Sep: Pacific Smiles (PSQ) – $0.033, WT Financial (WTL) – $0.005, Briscoe (BGP) – $0.115, Southern Cross Electrical (SXE) – $0.05 

Other ASX corporate actions today: 

• Dividends paid: Infomedia (IFM), Lendlease (LLC), Challenger (CGF), Pengana Capital (PCG), Codan (CDA), Australian Ethical (AEF), APA Group (APA, Stanmore Resources (SMR), Ebos (EBO), MA Financial (MAF), Nickel Industries (NIC), Coronado Global (CRN), Lynch Group (LGL) 

• Listing: None  

• AGMs: Webjet (WEB)

Economic calendar (AEST):

• 4:00 pm: UK Inflation (Aug)

• 10:30 pm: US Building Permits (Aug)

• 4:00 am: Fed Interest Rate Decision

• 4:30 am: Fed Press Conference