Market Wraps

Morning Wrap: ASX 200 to ease, Nvidia lifts S&P 500 higher, oil prices hit four-month low

Tue 04 Jun 24, 8:31am (AEST)

ASX 200 futures are trading 12 points lower, down -0.15% as of 8:30 am AEST.

The S&P 500 and Nasdaq ticked higher thanks to a 4.9% gain from Nvidia, Brent crude tumbled more than 3% overnight and traded below US$80 a barrel for the first time since February, GameStop shares surged after Roaring Kitty reveals $116 million position, overseas markets including Mexico and India swing on election outcomes and a rare earth and titanium explorer is set to list at 11:00 am AEST.

Let's dive in.

Overnight Summary

Tue 04 Jun 24, 8:22am (AEST)

Name Value % Chg
Major Indices
S&P 500 5,283 +0.11%
Dow Jones 38,571 -0.30%
NASDAQ Comp 16,829 +0.56%
Russell 2000 2,060 -0.50%
Country Indices
Canada 22,117 -0.68%
China 3,078 -0.27%
Germany 18,608 +0.60%
Hong Kong 18,403 +1.79%
India 76,469 +3.39%
Japan 38,923 +1.13%
United Kingdom 8,263 -0.15%
Name Value % Chg
Commodities (USD)
Gold 2,369.3 +1.00%
Iron Ore 110.1 -7.15%
Copper 4.6675 +1.42%
WTI Oil 74.22 -3.60%
Currency
AUD/USD 0.6688 +0.53%
Cryptocurrency
Bitcoin (AUD) 103,107 +1.69%
Ethereum (AUD) 5,633 -0.34%
Miscellaneous
US 10 Yr T-bond 4.402 -2.48%
VIX 13.11 +1.47%

US Sectors

Tue 04 Jun 24, 8:22am (AEST)

SECTOR % CHG
Information Technology +0.98%
Health Care +0.74%
Communication Services +0.49%
Consumer Discretionary +0.14%
Consumer Staples -
Real Estate -0.35%
SECTOR % CHG
Financials -0.60%
Materials -0.61%
Industrials -1.24%
Utilities -1.26%
Energy -2.60%

S&P 500 SESSION CHART

S&P 500 intraday
S&P 500 recovered from session lows to close slightly higher (Source: TradingView)

OVERNIGHT MARKETS

  • Major US benchmarks ended mixed overnight, recovering from session lows

  • Nvidia (+4.9%) lifted benchmarks higher while the blue-chip Dow (-0.3%) and Equal Weight S&P 500 (-0.5%) underperformed

  • Bond yields continued to fall, with the US 2-year yield down 16 bps in the last three sessions to 4.81%

  • Key moving pieces from the overnight session include AI growth theme with new data centre chips from Nvidia and AMD, big tech cushioning the broader market, meme stocks soaring on Roaring Kitty’s Gamestop stake, growth concerns after softer-than-expected US ISM manufacturing data and Atlanta Fed’s Q2 GDP downgrade

  • Market sentiment has become more stretched

    • BofA’s Sell Side Indicator rose 67 bps to 55.3% in May, the largest increase since December 2023 and now at 2 year highs

    • AAII bull-bear spread ended May at +12.3% vs. -1.8% at the end of April

    • Jefferies’ Conference Board survey revealed 48% expect equities to move higher over the next 12 months, the third highest reading of all-time

  • GameStop surged as much as 74% after Roaring Kitty's Reddit post shows $116m bet (Bloomberg)

  • Morgan Stanley and JPMorgan strategists split on US market outlook (Bloomberg)

  • Brent falls below US$80 for first time since Feb on OPEC+ output news (Bloomberg)

  • Mexico's stock market crashes, worst day since 2008 after Claudia Sheinbaum was elected as the next President (Reuters)

INTERNATIONAL STOCKS

  • AMD launches new AI chips it plans to develop over next two years to take on leader Nvidia (Bloomberg)

  • Microsoft will invest >US$3bn to expand cloud and AI infrastructure in Sweden (Reuters)

  • Global airlines full-year profit forecast to rise to US$30.5bn as travel soars (Reuters)

  • Target and Best Buy see customers increasingly trading down, retailers continue to price cuts or value offers to address customers hitting limit on price increases (NY Times)

  • Bill Ackman sells 10% stake in Pershing Square ahead of potential IPO (FT)

CENTRAL BANKS

  • Minneapolis Fed President Kashkari sees rates on hold for extended period of time (FT)

  • RBA seen as only other major central bank besides BOJ at risk of raising rates (Bloomberg)

  • ECB's incoming rate cut marks chance for Europe to address long-standing growth challenges (Bloomberg)

GEOPOLITICS

  • Far-right revolt against Israeli PM Netanyahu sees Biden ceasefire plan in jeopardy (FT)

  • Indian markets rally to record highs as exit polls show decisive victory for Modi's re-election (FT)

  • Mexican peso pressured after decisive ruling party election win (Bloomberg)

  • Chinese businesses target Vietnam and Mexico as trade tensions rise between Beijing and western nations (FT)

ECONOMY

  • US manufacturing activity slowed by more than expected in May as new orders dropped by the most in nearly two years (Reuters)

  • China Caixin PMI rises at fastest pace in about two years, in contrast with weak official reading (Reuters)

  • Japan's factory activity expands for first time in a year in May but overall growth was modest and demand was still subdued (Reuters)

  • South Korea factory activity expands at fastest pace in two years in May on stronger growth in output and orders (Reuters)

  • Eurozone PMI show new orders declined at slowest pace in two years, leading to improved business confidence (Reuters)

  • UK May PMIs show factories return to growth, prices rise by most in a year (Reuters)

Industry ETFs

Tue 04 Jun 24, 8:21am (AEST)

Name Value % Chg
Commodities
Gold Miners 35.51 +0.59%
Silver 27.89 +0.47%
Lithium & Battery Tech 43.64 +0.41%
Steel 70.91 -0.58%
Strategic Metals 51.23 -0.91%
Copper Miners 47.75 -0.91%
Uranium 31.56 -2.11%
Industrials
Global Jets 20.16 +0.65%
Agriculture 25.24 +0.44%
Aerospace & Defense 136.57 +0.40%
Construction 69.95 -1.16%
Healthcare
Biotechnology 135.5 +1.21%
Name Value % Chg
Cryptocurrency
Bitcoin 26.16 +2.54%
Renewables
Hydrogen 6.8 +1.80%
Solar 48.13 -0.31%
CleanTech 9.86 -0.50%
Technology
Video Games/eSports 66.2 +1.89%
Robotics & AI 31.12 +1.10%
Sports Betting/Gaming 16.87 +0.73%
Electric Vehicles 24.82 +0.45%
Semiconductor 234.39 +0.16%
E-commerce 23.61 -0.08%
Cloud Computing 19.45 -0.26%
FinTech 25.08 -0.56%
Cybersecurity 27.81 -1.10%

ASX TODAY

  • ASX 200 set for a relatively soft open as most materials, defensives and financial sectors struggled for upside overnight

  • Energy set for a tough session as Brent crude prices tumble 3.9% after Saudi Arabia and its allies plan to start increasing oil production in October

  • Global X Uranium ETF (-2.1%) was heavy overnight, which generally points towards a relatively weak session for local names

  • Biotech has been running hot this year, with plenty of large (Telix, Neuren) and small-to-mid cap (Dimerix, Botanix, LTR Pharma) rallying to all-time highs

  • Resouro Strategic Metals is set to list at 11:00 am AEST – The company is already listed on the Canadian stock exchange and seeks to develop its rare earth and titanium Tiros Project in Brazil. Its IPO offer price was 50 cents and it closed at C$0.55 overnight (A$0.60)

  • Life360 launches 5.8m share US IPO through Goldman Sachs (424B5 filing)

  • Genetic Signatures on track to price $30m raise at 75 cents per share (The Aus)

  • Guzman y Gomez tried its luck with PE before launching $2.2bn float (AFR)

BROKER MOVES

  • Lottery Corp upgraded to Buy from Neutral; target up to $5.60 from $5.50 (Citi)

  • Lovisa downgraded to Equal-weight from Overweight; target cut to $30.25 from $32.50 (Morgan Stanley)

  • Lovisa downgraded to Neutral from Buy; target remains $31.65 (Citi)

  • Navigator Global Investments downgraded to Neutral from Outperform but target up to $2.22 from $1.55 (Macquarie) 

  • Peter Warren Automotive Holdings downgraded to Equal-weight from Overweight; target cut to $1.90 from $3.0 (Morgan Stanley)

  • Premier Investments upgraded to Outperform from Underperform; target remains $32.0 (CLSA)

  • Ramsay Healthcare upgraded to Neutral from Underweight; target remains $50.0 (JPMorgan)

Key Events

Companies trading ex-dividend: 

  • Tue 4 June: Probiotec (PBP) – $0.037

  • Wed 5 June: Qualitas Real Estate Income Fund (QRI) – $0.012, Hancock & Gore (HNG) – $0.01, Infratil (IFT) – $0.017

  • Thu 6 June: None

  • Fri 7 June: None

  • Mon 10 June: None

Other ASX corporate actions today: 

  • Dividends paid: None

  • Listing: Resouro Strategic Metals at 11:00 am 

Economic calendar (AEST):

No major economic announcements. 

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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