Morning Wrap: ASX 200 to fall, Dow suffers worst say since September, Newmont to tumble

ASX 200 futures are trading 16 points lower, down 0.19%, as of 8:30 am AEDT.

US markets fell for a third straight session amid a growing list of worries (rising yields, re-inflation fears, US election uncertainty and high earnings expectations), the US dollar soars to a three month high, the Bank of Canada cuts rates by 50 bps and outlines plans for more plus a long list of companies release updates as part of their AGM presentation and/or quarterly report.

Let's dive in.

S&P 500 SESSION CHART

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

OVERNIGHT MARKETS

• Major US benchmarks finished lower, with the S&P 500 down for a third straight session for the first time since early September

• Equal-weight S&P 500 outperformed by 59 bps, reflecting the underperformance of tech and relative strength in defensives

• Markets continued to back off Friday’s record close, underpinned by recent yield spike, rising re-inflationary fears, increasingly higher earnings bar, election uncertainty and stretched valuations

• Yields rise for third-straight day amid repricing of Fed rate path, speculation around potential Trump victory (BBG)

• Treasury yields haven't risen this much post-Fed rate cut since 2020 and 1995 cycles (BBG)

• Dollar hits highest level since Aug-24 on strong economy, so-called Trump trade (FT)

• Tamed IPO activity set to end with possible US$50bn of new deals in 2025 (BBG)

STOCKS

• McDonald's down 5pc after CDC confirmed E. coli breakout across ten states (FT)

• Starbucks Q4 sales missed EPS expectations by more than 20%, US comps fell 6% amid a 10% decline in transactions, expanded product range failed to resonate with customers, FY25 guidance suspended (FT)

• Texas Instruments Q3 profit beat points to China automotive chip rebound as industrial weakness persists (RT)

• Deutsche Bank to resume share buybacks amid risking investment bank revenue and settled disputes (FT)

• Tokyo Metro surges in IPO debut (Bloomberg)

CENTRAL BANKS

• BoC cuts by 50 bp, reiterate expectation for further rate cuts (FT)

• Lagarde says ECB satisfied with inflation momentum, though pace of cuts still to be determined (BBG)

• BoE hawk Greene reiterates preference for gradual policy easing despite September inflation decline (RT)

POLITICS & GEOPOLITICS

• Early voting trends favouring Republicans amid record turnout (WP)

ECONOMY

• China State Think Tank urges US$281bn to stabilise markets (BBG)

ASX TODAY

• APA Group reaffirms FY adjusted EBITDA guidance of $1.96-2.02bn, in-line with market expectations (APA)

• Brambles reports Q1 sales revenue up 2% to $1.68bn, FY25 guidance largely in-line with market expectations (BXB)

• Insignia Financial reports FUMA of $319.6bn as at 30-Sep vs. $311.3bn as at 30-Jun, says NAB separation on track for 1H25 (IFL)

• Insurance Australia reaffirms FY25 guidance, expects gross written premium growth in mid-to-high single digits (IAG)

• Mount Gibson Iron reports Q1 iron ore sales of 559kwmt vs. 872kwmt a quarter ago, notes $412m in cash and investment reserves (MGX)

• Newmont misses Q3 EPS expectations by 5.3% ($0.81 vs. $0.86), board authorised an additional US$2bn share repurchase program (NEM)

• Northern Star reports Q1 production of 373.9koz vs. 383.9koz consensus, reaffirms FY25 production guidance (NST)

• Reliance Worldwide reaffirms first-half outlook at AGM, expects external sales to be broadly flat (RWC)

• Super Retail Group reports year-to-date (FY25) like-for-like sales up 2% and total sales up 4% (SUL)

WHAT TO WATCH TODAY

• Quarterly and AGM season: Big influx of quarterly reports and AGMs today. Most companies are simply reaffirming previous guidance. The two that stand out are Newmont (sizeable miss and shares down 4.7% in after hours on NYSE) and Super Retail Group (total sales for first 16 weeks up 4% whereas Macquarie is forecasting 0.07% for the first-half FY25 so looks rather strong so far)

• Commodity pullback: US dollar highest in three months, placing downward pressure on commodities. Most of our overnight resource-related ETFs down 1-3%, led by Uranium, Silver and Nickel.

BROKER MOVES

• Bluescope downgraded to Neutral from Buy; target remains $23 (CITI)

• Michael Hill International upgraded to Buy from Overweight; target up to NZ$0.80 from NZ$0.78 (JARD)

• St. Barbara downgraded to Neutral from Outperform; but target up to $0.49 from $0.33 (MQG)

Stocks trading ex-dividend: 

• Thu 24 Oct: None

• Fri 25 Oct: Bank of Queensland (BOQ) – 2.49%

• Mon 28 Oct: Alcoa Corp (AAI) – 0.17%

• Tue 29 Oct: Waterco (WAT) – 1.48% 

• Wed 30 Oct: Hotel Property Investments (HPI) – 1.79%, Acrow  (ACF) – 2.76%

Other ASX corporate actions today: 

• Dividends paid: New Hope Corp (NHC), Nine Entertainment Co. (NEC), Ridley Corp (RIC), Stealth Group (SGI)

• Listing: None

• AGMs: APA Group (APA), Brambles (BXB), Challenger (CGF), Chorus (CNU), Deterra Royalties (DRR), Insurance Australia (IAG), Reece (REH), Reliance Worldwide (RWC), South32 (S32), Super Retail Group (SUL)

Economic calendar (AEDT):

• 8:00 am: Australia Manufacturing and Services PMI (Oct)

• 5:30 pm: Germany Manufacturing and Services PMI (Oct)

• 6:00 pm: Eurozone Manufacturing and Services PMI (Oct)