Morning Wrap: ASX 200 to ease, S&P 500 slips, Tesla tumbles 14% amid Trump-Musk feud

ASX 200 futures are down 13pt (-0.15%) as of 8:30 am AEST.

In a nutshell:

• Major US benchmarks finished slightly lower, weighed by Tesla's 14% tumble amid an ongoing feud between President Trump and Elon Musk

• ECB cut rates by 25 bps to 2.0%, in-line with market expectations, but the central bank says its nearing the end of its rate cut cycle

• Trump said his call with Xi was "very good" and respective trade teams will meet shortly

Let's dive in.

S&P 500 SESSION CHART

S&P 500 lower, finished near worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished lower, and near worst levels

• Another relatively quiet session, markets weighed by worsening Trump-Musk feud and US initial jobless claims rising to an eight month high

• Futures may be under pressure as closely watched Broadcom (#7 largest S&P 500 company by market cap) missed lofty earnings expectations 

• Global funds rethink exposure to US markets amid fallout from tariffs and escalating debt (FT)

• Japan 30-year bond auction met with weakest demand in almost two years, but better-than-feared, with yields edging lower after the sale (BBG)

• US small-cap stocks entering a favorable season, historically outperforming larger stocks 60% of the time in June (BBG)

STOCKS

• Broadcom shares tumble after hours on softer-than-expected quarterly earnings and lacklustre revenue forecast, suggesting AI spending frenzy is not meeting lofty expectations (BBG)

• Procter & Gamble set to cut ~7,000 jobs or 15% of non-factory headcount due to uneven demand (RT)

• Tesla shares sink more than 10% as it faces $1.2bn risk to full-year profit if EV credit removed (BBG)

• Stablecoin issuer Circle rockets higher in IPO (CNBC)

• Amazon developing software for humanoid robots that could ultimately replace delivery workers (TI)

CENTRAL BANKS

• ECB cut rates by 25 bps to 2.0%, with President Lagarde indicating that the bank is nearing the end of its rate cut campaign (BBG)

• BOJ to consider slowing pace of bond tapering next year (RT)

• Reserve Bank of India expected to cut by another 25 bps to boost economic growth (BBG)

TARIFFS & GEOPOLITICS

• Trump says call with Xi was “very good … resulted in a very positive conclusion for both countries,” respective trade teams will meet shortly (BBG)

• China's control of rare earths puts US in vulnerable position amid trade tensions (AX)

• EU urges China to end rare earths export restrictions amid 'alarming situation' facing Europe's auto industry (SCMP)

• Aluminum industry executives warn manufacturers may not be able to absorb latest 50% tariff hike, threatening to crush demand (BBG)

• Canada PM Carney holds off on retaliating against US tariffs, citing 'intensive' trade discussions (BBG)

ECONOMY

• US initial jobless clams rise to 247,000 vs. 236,500 consensus, the highest since October 2024 (BBG)

• US business optimism sharply declines, with only 27% of executives confident about economic outlook for the next 12 months, down from 47% in the first quarter (BBG)

• China services PMI printed 51.1 in May, up from 50.7 in the previous month (BBG)

ASX TODAY

• Evolution Mining reports annual mineral resource (30Moz gold and 4.4Mt copper) and ore reserve (11Moz gold and 1.4Mt copper) update (EVN)

• Insignia Financial takeover still in the works, sources say debt funding is a hurdle for CC Capital (AFR)

• Fletcher Building faces legal proceedings from Skycity Entertainment, alleges that breaches of contract and seeking damages of over NZ$330m (FBU)

• Ora Banda Mining issues Davyhurst operations update, guides to FY25 production of 95koz vs prior 100-105koz, AISC to be A$2,600 vs. prior A$2,350-2,500 (OBM)

• Retirement living operator GemLife targeting $700m IPO and $1.5bn valuation, with at least 50% free float (The Aus)

• Web Travel Group Managing Director John Gusic offloads 2.7m shares, beneficially owns 6.1m shares after the transaction (WEB)

WHAT TO WATCH TODAY

• Silver: Silver prices rallied 3.3% overnight to US$35.7/oz, breaking out to the highest level since February 2012. This could drive a strong move for silver stocks, though there aren't many names ASX-listed names to watch. The few that come to mind include Silver Mines (SVL, Sun Silver (SS1), Adriatic Metals (ADT) and Unico Silver (USL).

• Copper: Copper briefly rallied 3% overnight and pushed above the US$5/lb for the first time since 2-Apr, before closing flat at US$4.94/lb. The volatility was driven by worries of a US copper tariff, after Trump doubled steel and aluminium imports earlier this week. More recently, copper prices have pushed higher after supply disruptions in Congo reduced Ivanhoe's Kamoa-Kakula copper mine operations.

• Lithium bounce: Pilbara Minerals is now up almost 20% in the last two sessions, experiencing a powerful bounce after briefly falling to $1.07. There hasn't been too much action for lithium prices, with Chinese carbonate futures hovering four year lows of 60,000 yuan a tonne.

BROKER MOVES

• Cosol reiterated Buy; target cut to $0.90 from $1.15 (BP)

• Cuscal reiterated Buy; target up to $3.50 from $3.00 (BP)

Stocks trading ex-dividend: 

• Mon 9 Jun: None

• Tue 10 Jun: Pepper Money (PPM) – $0.125, Tasmea (TEA) – $0.12

• Wed 11 Jun: Infratil (IFT) – $0.104, Tower (TWR) – $0.074

• Thu 12 Jun: Champion Iron (CIA) – $0.112, Transmetro Corporation (TCO) – $0.05

• Fri 13 Jun: Dyno Nobel (DNL) – $0.024

Other ASX corporate actions today: 

• Dividends paid: Alcoa (AAI), Tamawood (TWD), United Overseas Australia (UOS)

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 10:30 pm: Canada Unemployment Rate (May)

• 10:30 pm: US Nonfarm Payrolls (May)