Morning Wrap: ASX 200 to fall, S&P 500 and Nasdaq extend record run, Gold and copper stocks to rally

ASX 200 futures are trading 11 points lower, down -0.14% as of 8:30 am AEST.

The S&P 500 and Nasdaq logged another record close while resources and value underperformed, gold and copper prices rallied strongly overnight – setting local miners up for a strong open and Keir Starmer is the UK's new prime minister after his Labour Party swept to power in a landslide election victory.

Let's dive in.

S&P 500 SESSION CHART

Another clean trend day for the S&P 500 (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks pushed higher last Friday, with the S&P 500 and Nasdaq both logging solid weekly gains and fresh record closing highs

• Big tech stocks continued to drive the indices higher, led by Meta (+5.8%), Alphabet (+2.4%), Apple (+2.1%) and Tesla (+2.0%) 

• Weekly performance recap: Nasdaq (+3.5%), S&P 500 (+1.95%), Dow (+0.66%), Equal Weight S&P 500 (-0.37%) and Russell 2000 (-1.02%)

• Streak of weaker-than-expected economic data gathering some attention, with Citi’s Economic Surprise Index now the most negative since August 2022

• Market consensus around a September rate cut continues to firm, the likelihood of a 25 bp Fed cut currently sits at 72.5%, up from 46.6% a month ago

• Nancy Pelosi buys Nvidia and Broadcom, offloads Tesla (Investing.com)

• Q2 earnings season has a high bar to clear (FT)

STOCKS

• Nvidia shares eased after receiving a rare negative call on Wall Street – New Street Research downgraded the stock to Hold from Buy, citing limited upside given the big run already this year (CNBC)

• Teck Resources ticked higher after Canada approved Glencore’s US$6.9bn acquisition of Teck’s metallurgical coal business (CNBC)

CENTRAL BANKS

• ECB President Lagarde says more reassurance needed inflation heading to 2% before cutting rates again (Bloomberg)

• PBOC has bond stockpile ready to sell in bid to slow descent in yields (Bloomberg)

• FX watchers eye potential BOJ interest-rate hike and cut to bond purchases to finally bring some relief to the yen (Bloomberg)

POLITICS

• Big Democratic donors weigh putting their money elsewhere in bid to pressure Biden to exit (Bloomberg)

• Biden says not going anywhere as calls for him to step down grow (Axios)

• Rishi Sunak concedes as Labour wins historic majority in UK election, ending 14 years of Conservative rule (London Times)

• Le Pen rivals set to block far-right French majority (Bloomberg)

ECONOMY

• US job gains fewest in six months as labour market cools, unemployment rate ticked higher to 4.1%, above consensus 4.0% (Reuters)

• German industrial production unexpectedly plunges in May (Bloomberg)

ASX TODAY

• ASX 200 set to tick lower after a relatively weak overnight lead for value and cyclical stocks

• GQG Partners reports 30-Jun FUM $155.6bn vs month-ago $150.1bn (GQG)

• Ramelius Resources reports Q4 gold production of 82Koz vs. guidance 75-85Koz (RMS)

• Regis Resources reports FY24 gold production 417.7koz vs guidance 415-455koz (RRL)

• South32 receives FIRB approval for proposed sale of Illawarra Metallurgical Coal to Golden Energy and Resources (S32)

 WHAT TO WATCH TODAY

• Gold: One of the best performing sectors overnight after prices rallied 1.45% to US$2,391. Shares in NYSE-listed Newmont rallied 2.4% to mark its highest close since July 2023. This should set local gold names up for a strong session.

• Silver: Silver prices also trended higher, up 2.7% to US$31.2, within an arms reach of recent highs of US$32.5. A few silver names of interest include the recently listed Sun Silver (ASX: SS1) and Mitre Mining (ASX: MMC)

• Copper: Copper prices surged 2.6% overnight, capping a 7% rally over the past five sessions. This upswing is breathing new life into local copper stocks, which are beginning to recover after a sharp 15-30% pullback from their June peaks. Some of the less-known names to watch include the dual-listed Capstone Copper (ASX: CSC) and Metals Acquisition (ASX: MAC)

• Energy: Energy was the worst performing S&P 500 sector overnight, down 1.5%. Oil prices (Brent) eased 0.8% overnight but still finished last week up 2.3%

BROKER MOVES

• REA Group upgraded to Outperform from Neutral; target up to $212 from $196 (Macquarie)

• Suncorp Group downgraded to Neutral from Outperform; target cut to $15.80 from $17 (Macquarie)

Companies trading ex-dividend: 

• Mon 8 July: Collins Foods (CKF) – $0.155

• Tue 9 July: Katana Capital (KAT) – $0.05, Red Hill Minerals (RHI) – $1.50

• Wed 10 July: None

• Thu 11 July: Transmetro Corp (TCO) – $0.05, Westgold Resources (WGX) – $0.013

• Fri 12 July: None

Other ASX corporate actions today: 

• Dividends paid: Danakali (DNK) – $0.0107 

• Listing: None

• Earnings: None

• AGMs: None

Economic calendar (AEST):

• 11:30 am: Australian Home Loans (May)

• 4:00 pm: Germany Balance of Trade (May)