Morning Wrap: ASX 200 to fall, S&P 500 and Nasdaq hit another record high, Gemlife debuts at noon

ASX 200 futures are down 11pts (-0.12%) as of 8:30 am AEST.

In a nutshell:

• S&P 500 and Nasdaq continued to trend higher, both scoring another fresh all-time high

• Trump announces trade deal with Vietnam, driving volatility for retail stocks

• Gemlife is set to make its debut at 12:00 pm, one of the largest IPOs this year

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher but well off opening levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks mostly higher and near best levels, with the S&P 500 and Nasdaq closing at all-time highs

• Slight rotation back into Tech, with yesterday’s losers leading the move – Tesla (+4.9%), Nvidia (+2.5%), Apple (+2.2%) and Broadcom (+1.9%)

• Oil prices rallied around 3% after OPEC announced a smaller-than-expected production hike

• Today’s big story – A few incremental headlines, with Trump’s ‘Big Beautiful Bill’ set to face challenges at the House, US securing a trade deal with Vietnam and better-than-feared Q2 Tesla deliveries 

• Hedge fund returns soared in June, as broader stock markets hit record highs (RT)

• Retail stocks whipsaw after Trump announced Vietnam trade deal (BBG)

• Bond traders eye US jobs report, hoping it sustains yield fall amid Fed rate cut hopes (BBG)

• Euro's winning streak against dollar hits two-decade high, traders eye $1.20 level (BBG)

• Bitcoin's implied volatility near lowest in two years, likely due to options activity (BBG)

• OPEC increased crude production by 360,000 barrels a day in June led by Saudi Arabia (BBG)

STOCKS

• Microsoft to lay off 9,000 employees, or ~4% of the company (TC)

• Tesla's Q2 vehicle deliveries down 14% from prior year, second-straight quarter of y/y declines (CNBC)

• Apple begins early foldable iPhone prototyping, targeting potential 2026 release (WSJ)

• Jeff Bezos sells US$736.7m in Amazon shares, continues funding Blue Origin, philanthropy (BBG)

• Google's data center energy use doubles in four years despite carbon-free pledge (TC)

• Alibaba invests billions in AI hubs, and data centers to expand Southeast Asia presence (WSJ)

• US bank stocks surge to three-year high amid buyback, dividend speculation (BBG)

• JPMorgan boosts dividend, approves $50bn share buyback after stress test results (WSJ)

• Stellantis US sales drop 10% in Q2, Jeep and Ram gains offset Chrysler, Dodge declines (BBG)

CENTRAL BANKS

• Trump says he has two or three top choices to succeed Fed Chair Powell (RT)

• ECB's Centeno says not rushing further rate cuts, concerned about weak growth despite inflation target (BBG)

TARIFFS 

• Trump announced trade deal with Vietnam, including 20% overall tariff and 40% for transshipments (FT)

• Trump shows no sign of extending 9-Jul deadline, criticises Japan for not accepting US rice exports, but sees potential deal with India on lower tariffs (BBG)

GEOPOLITICS

• Trump says Israel agrees to 60-day Gaza ceasefire, Hamas to receive proposal (BBG)

• Iranian military loads naval mines, raising US concerns of Strait of Hormuz blockade (RT)

ECONOMY

• US private payrolls unexpected fall 33,000 vs. consensus for a 115,000 increase, lowest reading since Mar-23, declines largely from professional services (-56k) and education/health services (-52k) (BBG)

• German inflation unexpectedly falls to 2.0%, reaching ECB target in June (CNBC)

• Australian retail sales rise less than expected, reinforces potential July rate cut (BBG)

• South Korea's inflation jumps to fastest pace since January, exceeding expectations (RT)

ASX TODAY

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

WHAT TO WATCH TODAY

• Resource strength: Strong overnight session for the resource sector, with oil prices up around 3% and most of our overnight ETFs (lithium, steel, copper) up 2-4%. Though this move may be in response to the strength we saw on Wednesday, where names like South32, Fortescue and Rio Tinto rallied 2-5%.

• Palladium: Prices rallied 5.0% to US$1,158/oz, the highest since October 2024. This is generally a tailwind for names like Chalice Mining.

• Gemlife IPO: Gemlife (GLF) is set to list at 12:00 pm AEST. The company develops, owns and operates a portfolio of land lease community assets. The IPO successfully raised $750m, making it one largest listing so far this year.

• Domino's day two: Domino's shares tumbled 15% on Wednesday to levels not seen since February 2014 after its CEO departed after less than a year in the role and did not provide a trading update (which it typically does around this time of the year).

BROKER MOVES

• ALS initiated Buy with $19.45 target (CITI)

• Bellevue Gold downgraded to Neutral from Overweight; target cut to $0.90 from $1.00 (JPM)

• G8 Education downgraded to Neutral from Outperform; target cut to $1.15 from $1.53 (GEM)

• Genesis Minerals initiated Neutral with $5.00 target (GS)

• Genesis Minerals downgraded to Neutral from Overweight; target cut to $4.40 from $4.60 (JPM)

• Greatland Resources initiated Neutral with $7.80 target (GS)

• Helia Group upgraded to Neutral from Underperform; target up to $3.35 from $3.25 (MQG)

• Paladin Energy downgraded to Underweight from Neutral; target remains $6.00 (JPM)

• Pantoro initiated Buy with $3.70 target (GS)

• Ramelius Resources initiated Neutral with $2.75 target (GS)

• South32 downgraded to Neutral from Overweight; target cut to $3.30 from $3.50 (JPM)

• Vault Minerals initiated Buy with $0.48 target (GS)

• Westgold Resources initiated Buy with $3.50 target (GS)

Stocks trading ex-dividend: 

• Thu 3 Jul: Als (ALQ) – $0.197, Clime Capital (CAM) – $0.014

• Fri 4 Jul: The Reject Shop (TRS) – $0.77

• Mon 7 Jul: Collins Foods (CKF) – $0.15

• Tue 8 Jul: None

• Wed 9 Jul: None

Other ASX corporate actions today: 

• Dividends paid: Dyno Nobel (DNL)

• Earnings: None

• IPOs: Gemlife Communities (GLF)

• AGMs: None

Economic calendar (AEST):

• 11:30 am: Australia Balance of Trade (May)

• 10:30 pm: US Non Farm Payrolls (Jun)