Morning Wrap: ASX 200 to edge higher, Nasdaq retreats from record highs + Gold, copper prices rise

The Dow outperformed the S&P 500 and Nasdaq overnight as big tech stocks pulled back, several commodities including gold and copper ticked higher, Guzman Y Gomez is trading higher pre-market after a massive debut on Thursday, Pilbara Minerals releases the outcomes of a pre-feasibility study and Woolworths receives a sizeable upgrade from Morgan Stanley.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 gives back early gains to finish slightly lower (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished mostly lower, a little off worst levels

• Growth and tech lagged value for a change – Broadcom (-3.7%), Nvidia (-3.5%) and Apple (2.1%) pulled back after recent run

• Equal Weight S&P 500 (+0.06%) outperformed the official benchmark by 31 bps

• Bond yields ticked slightly higher from near three-month lows

• US dollar up 0.4% to close at highest level since 2 May  

• Treasuries on verge of erasing 2024 losses on rising Fed rate cut bets (Bloomberg)

• Foreign outflows from Chinese stocks extends to an eight month (Bloomberg)

• US crude and gasoline stockpiles decline more than expected (Bloomberg)

STOCKS

• Accenture shares rally despite missing Q3 earnings and sales expectations, the company reported more than $900m in generative AI bookings for the quarter (Yahoo)

• AMD says cyber-attack won't have significant impact on operations (Bloomberg)

CENTRAL BANKS

• Switzerland delivers back-to-back 25bp rate cut; sees inflation pressure easing (Reuters)

• Norway leaves rates unchanged, sees it at current level for a while (Bloomberg)

• Brazil holds rates, halting easing cycle on rising inflation projections (Bloomberg)

• Fed's Kashkari says could take up to two years to achieve 2% inflation (Investing.com)

GEOPOLITICS

• US government to redirect Patriot air defence orders to Ukraine (FT)

• Hezbollah warns Israel of war ‘without limits’ and threatens Cyprus (FT)

• Shipping industry urges action to halt attacks from Houthis following sinking of second vessel (Reuters)

• North Korea-Russia pact calls for immediate military aid if invaded, with each side coming to defence of other (Reuters)

ECONOMY

• US initial jobless claims little changed at 238,000 (Bloomberg)

• US housing starts fall 5.5% month-on-month vs. expectations of a 1.1% rise in May, led by sharp drop in single-family housing starts (Bloomberg)

• China loan prime rates unchanged as expected as economists 2H24 cut (Bloomberg)

ASX TODAY

• ASX 200 to edge higher after a strong lead from value and cyclical sectors overnight

• Strong overnight session for resource-related ETFs including Silver, Gold and Copper – This could see some positive flow for local miners

• Guzman Y Gomez day 2 – Likely strong open on US investor bids, the $30.00 level was heavily supported by a large buyer yesterday and further retail support (as they released GYG listed)

  • Update: The $30.00 buyer stopped at around 10:10 am AEST and without this buyer, the stock nosedived 7% lower by 10:20 am AEST

• Deterra Royalties Chair Jennifer Seabrook discloses purchase of 16,200 shares – This is interesting because DRR is trading at its lowest level since Nov-22 after plans to half its payout ratio for a largely lithium-oriented royalty company (DRR)

• Pilbara Minerals releases outcomes of pre-feasibility study at Pilgangoora, could be expanded to production volume of more than 2Mtpa (PLS)

• West African Resources says Kiaka constructions is 50% complete, costs in-line with expectations and first gold pour on track for Q3 2025 (WAF)

BROKER MOVES

• Beach Energy downgraded to Underperform from Neutral; target cut to $1.40 from $1.60 (BofA)

• REA Group upgraded to Buy from Neutral; target up to $221 from $192 (Citi)

• Treasury Wine upgraded to Buy from Overweight; target remains $14.50 (Jarden)

• Woolworths Group upgraded to Overweight from Underweight; target up to $37 from $31 (Morgan Stanley)

Companies trading ex-dividend: 

• Fri 21 June: CSR (CSR) – $0.12 

• Mon 23 June: None

• Tue 24 June: None 

• Wed 25 June: None

• Thu 26 June: Fisher & Paykel (FPH) – $0.218 

Other ASX corporate actions today: 

• Dividends paid: Calima Energy (CE1) – $0.126

• Listing: None

Economic calendar (AEST):

• 9:30 am: Japan Inflation Rate (May)

• 4:00 pm: UK Retail Sales (May)

• 5:30 pm: Eurozone Manufacturing and Services PMI (Jun)