Morning Wrap: ASX 200 to fall, S&P 500 and Nasdaq edge out another record high

ASX 200 futures are down 60pts (-0.69%) as of 8:30 am AEST.

In a nutshell:

• S&P 500 and Nasdaq eked out another record high

• Market breadth was broadly negative, with megacap strength buoying indices to record levels

• EU trade deal fails to spark a rally, though AI/semiconductor stocks continued to trend higher

Let's dive in.

S&P 500 SESSION CHART

S&P 500 ekes out a tiny gain (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks mostly higher, though the S&P 500 and Nasdaq edged out sixth-straight gains and both closed at record highs

• Breadth was negative, with the Equal-weight S&P 500 (-0.59%) underperforming the official benchmark by 61 bps

• Lots of headline volatility from US-EU trade deal, US-China tariff truce extension, weak 5-year Treasury auction and earnings jitters (four Mag-7 stocks report this week)

• Oppenheimer raises S&P 500 year-end target to consensus-high of 7,100 betting on strong earnings and easing trade tensions (RT)

• Wall Street faces "moment of truth" ahead of Fed meeting and Big Tech earnings (BBG)

• Hedge funds dump tech stocks as S&P 500 hits record highs and valuations surge to record levels (YF)

• Goldman Sachs says Chinese stocks like to rise as US-China soon to land a trade deal (BBG)

STOCKS

• Tesla signs $16.5bn chip deal with Samsung, AI chip production in Texas planned, Musk says the value of the deal as "just the bare minimum" (BBG)

• Figma boosts IPO price range, targeting $18.8bn valuation amid investor enthusiasm for tech stocks (RT)

• Audi cuts forecast, citing US tariffs and restructuring costs impact on revenue and margin (RT)

• Heineken welcomes EU-US trade deal, weighs tariff mitigation amid consumer worries (RT)

CENTRAL BANKS

• White House urges Fed for lower rates as Powell meeting looms, widening Trump rift (FT)

• Fed anticipated to hold rates steady as pressure for cuts builds (BBG)

• ECB's Kazimir says no September rate cut unless economy seriously worsens, wait-and-see approach favored (BBG)

TARIFFS 

• US and EU strike trade deal, averting bigger trade war with 15% tariff (BBG)

• French government criticises US-EU trade deal, urges EU tariff retaliation to avoid political weakness (NYT)

• PM Carney says Canada-US trade at 'intense phase' despite Trump's comments suggesting deal not a priority (BBG)

• Trump suggests potential 15-20% baseline tariff rate for the global economy (CNBC)

• EU admits it can't guarantee $600bn US investment pledge, relies on private sector (POL)

• Trump says US close to securing trade deal with China (RT)

• US eases tech export restrictions to China amid trade talks (FT)

• US executives visit China, coinciding with high-level US-China trade talks in Sweden (RT)

ECONOMY

• China introduces nationwide childcare subsidies to combat falling birthrates, offering 3,600 yuan a year per child under the age of three, expected to benefit more than 20m families (BBG)

• UK goods exports hit record low, reflecting Brexit impact and shift to services (FT)

ASX TODAY

Check out our Live Blog for the latest coverage and analysis for company announcements, market movements and economic updates.

• Regis Healthcare co-founder Bryan Dorman behind $133m block trade, Dorman Family trust to sell down stake to 10.8% from 16.4%, block priced at $7.84 a piece (AFR)

• MinRes to recognise FY25 non-cash impairment expense related to Resource Development Group’s voluntary administration (MIN)

• Monadelphous Group awarded new construction and maintenance contracts with Rio Tinto, Gladstone Pipeline and more, valued at over $110m (MND)

• Sandfire Resources reports Q4 copper production of 29.2kt vs. 29.0kt consensus, preliminary FY25 EBITDA of $528m (SFR)

WHAT TO WATCH TODAY

• More pullback, weak breadth: US stocks finished mostly lower overnight, minus some strength from Energy (+1.1%) and Tech (+0.7%). The weak five-year bond auction weighted on rate-sensitive real estate stocks, while the Materials sector continued its sharp pullback after the recent rally. Overall, a few announcements here and there, but companies are largely preparing for their FY25 results. Let's see what the day brings us.

BROKER MOVES

• Endeavour Group initiated Sector Perform with $4.40 target (RBC)

• Perseus Mining downgraded to Neutral from Overweight; target cut to $3.70 from $3.90 (JPM)

Stocks trading ex-dividend: 

• Tue 29 Jul: None

• Wed 30 Jul: KKR Credit Income Fund (KKC) – $0.017, Mirrabooka Investments (MIR) – $0.065

• Thu 31 Jul: Metrics Master Income Trust (MXT) – $0.013, Metrics Income Opportunities Trust (MOT) – $0.012, Metrics Real Estate (MRE) – $0.009

Other ASX corporate actions today: 

• Dividends paid: Turners Automotive (TRA) 

• Earnings: None

• IPOs: None

• AGMs: BWP Trust (BWP)

Economic calendar (AEST):

No major economic announcements.