Morning Wrap: ASX 200 to edge higher, S&P 500 slips for third day, Oil prices hit lowest since 2021

ASX 200 futures are up 10pts (+0.11%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks mostly lower but off worst levels

• Nasdaq snapped a four-day losing streak amid a small bounce for Big Tech, though S&P 500 posted a third-straight decline

• Brent crude down 2.5% to US$58.8, closing at the lowest since Feb 2021 following Russia-Ukraine peace headlines

• US November nonfarm payrolls better-than-expected, unemployment rate jumps to 4.6% (vs. 4.4% ests), with markets pricing in slightly more rate cuts

Let's dive in.

S&P 500 SESSION CHART

S&P 500 lower but off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks mostly lower but off worst levels

• Nasdaq snapped a four-day losing streak amid a small bounce for tech stocks

• S&P 500 now down for three straight sessions, giving back ~1.5% since last Thursday’s record close

• Oil sold to oblivion, Brent down 7.9% in the last seven sessions, marked the lowest closing price since February 2021

• BofA survey shows fund managers bullish next year on everything from economic growth to equities and commodities (BBG)

• Nasdaq files to roll out 24/7 trading in stocks (RT)

• China stocks near correction as weak economy, stretched valuations and stimulus disappointment weigh (BBG)

• White House is prepping to announce additional deals in the mining sector (RT)

• WTI falls to lowest level since early 2021 amid optimism over potential Russia-Ukraine peace deal (FT)

STOCKS

• Ford flags $19.5bn charge in Q4 as it retreats from EVs, pivots to gas and hybrid models (RT)

• Pfizer sales guidance disappoints, looking at longer-term investments to counter waning Covid and existing drug sales (CNBC)

• Databricks raising $4bn at $134bn valuation, up 34% since August (CNBC)

• CoreWeave at epicenter of AI selloff driven by concerns over debt, data centre construction delays and profit uncertainty (WSJ)

• PayPal applies to become a bank, eyes small business lending (BBG)

• VW halts production at Dresden plant, marking first-ever German plant closure amid weak demand and US tariffs (NYT)

• China's Vanke shares set for record quarterly fall amid creditor talks over 2bn yuan bond extension (BBG)

TARIFFS

• US suspends UK technology deal due to lack of progress on trade barriers (FT)

• USTR says US will use "every tool at its disposal" if EU continues to discriminate against US tech companies (BBG)

• EU says China has begun issuing rare earths export licenses with lengthier terms (BBG)

• UK and South Korea sign upgraded FTA aimed at easing rules of origin for Korean autos and consumer goods (FT)

CENTRAL BANKS

• BOJ widely expected to hike by 25 bp on Friday; rate outlook clouded by yen, elevated inflation and rising yields (BBG)

ECONOMY

• US November nonfarm payrolls printed ~64,000 vs. ~50,000 ests, October figures at -105,000 largely in-line with market expectations, unemployment rate came in at 4.6% vs. 4.4% ests or the highest since September 2021 (BBG)

• US October retail sales up a tiny 0.03% month-on-month, though in-line with market expectations, annual headline sales up 3.5% year-on-year (BBG)

• OECD says surge in AI investment will keep rising and drive sustained global economic gains (BBG)

• Eurozone PMI sees private sector growth slowing to lowest in three months (BBG)

• Japan manufacturing contraction eases amid signs demand is stabilizing; services growth slows (RT)

• UK PMI improves amid sharp rise in new business (BBG)

• Australia's consumer sentiment drops in December as households grapple with renewed pressure on inflation (BBG)

ASX TODAY

• Cedar Woods upgrades FY NPAT guidance to at least 20% year-on-year growth vs. prior guidance of at least 15% (CWP)

• Macmahon receives new three year contract at Byerwen coking coal mine valued at $792m (MAH)

• Perseus Mining continues to look at M&A opportunities after losing bid for Predictive Discovery, article speculates Turaco Gold as a potential target (The Aus) 

• South32 to place Mozal Aluminium into care and maintenance on 15-Mar-26, FY26 production unchanged at 240kt, one-off costs to be ~$60m (S32) 

• Worley’s Power Services business to be acquired by SPIE Global Services, purchased price not disclosed (WOR)

WHAT TO WATCH TODAY

• More bearish vibes: ASX back to an uncomfortable level, as the last two sessions wiped out Friday's ~1.2% rally. A sizeable pullback for Chinese equities/US tech and weak Chinese economic data weighing on local stocks (alongside hawkish repricing of RBA rate outlook). Market needs to show some strength here.

• Commodity softness: Last week was a massive breakthrough for the commodity space, now we're seeing a broad pullback. Resource-related overnight ETFs continued to pull back, including Uranium, Strategic Metals and Copper.

• Announcements: I'm pretty sure this is CWP's third FY guidance upgrade in a matter of months, MAH's contract win looks very material despite no change in FY26 guidance and S32's Mozal was widely expected to stop producing post FY26

BROKER MOVES

• IGO upgraded to Overweight from Neutral; target up to $10.20 from $5.40 (JPM)

• Liontown upgraded to Overweight from Neutral; target up to $1.85 from $1.10 (JPM)

• PLS Group retained Overweight; target up to $4.80 from $3.60 (JPM)

Stocks trading ex-dividend: 

• Wed 17 Dec: Wam Income Maximiser (WMX) – $0.004

• Thu 18 Dec: None

• Fri 19 Dec: None

Other ASX corporate actions today:       

• Dividends paid: ALS (ALQ), Amcor (AMC), Desane Group Holdings (DGH), Embark Early Education (EVO), GQG Partners (GQG), Macquarie Group (MQG)

• Earnings: None

• IPOs: None

• AGMs: Dyno Nobel (DNL)

Economic calendar (AEDT):

• 6:00 pm: UK Inflation (NOV)