Morning Wrap: ASX 200 to fall, S&P 500 ends lower, Copper and Lithium stocks surge

ASX 200 futures are down 41pts (-0.46%) as of 8:30 am AEST.

In a nutshell:

• Major US benchmarks on a two-day losing streak, pulling back from record levels

• Copper prices spiked after Freeport-McMoRan declared force majeure from contracted supplies

• Lithium Americas shares almost double on potential US government stake

Let's dive in.

S&P 500 SESSION CHART

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

OVERNIGHT MARKETS

• Major US benchmarks broadly lower, though off worst levels

• Stocks down for a second-straight session, with S&P 500 down 0.83% from Monday’s record close

• S&P 500, Nasdaq and Russell 2000 all modestly lower for the week

• Oil prices continued to climb, with Brent up 2.5% in the last two sessions

• No major directional drivers, markets in the midst of a small pullback

• Downward near-term drivers include month-and-quarter end rebalancing, corporate buyback blackouts, cautious headlines around Nvidia’s circularity/vendor financing, hawkish Fedspeak, US government shutdown risks 

• Market unwinding hopes for two more 2025 Fed rate cuts (BBG)

• Copper prices rallied more than 4% after Freeport-McMoRan declared force majeure from contracted supplies from its Grasberg mine in Indonesia (BBG)

• S&P 500 has gone 107 sessions without a 2% drop, the longest streak since July 2024 (BBG)

• Volume in Fed fund futures at record levels ahead of possible quarter-end stresses (BBG)

STOCKS

• Lithium Americas shares almost double as US is said to seek a stake, in discussions with Department of Energy and GM (BBG)

• Micron Q4 earnings top market expectations, revenue up 46% on strong demand for memory products (BBG)

• Alibaba lifts AI infrastructure capex, unveils new LLM (BBG)

• Zuckerberg says Instagram has grown to 3 billion MAUs (RT)

• Microsoft to partner with Anthropic on AI Copilot (CNBC)

• Kenvue Tylenol crisis deepens as company faced with possible FDA ruling forcing autism risk on label (YF)

• Tether raising as much as $20bn in private placement that could value company at roughly $500bn (BBG)

• Nvidia's investment deal with OpenAI giving rise to 'circularity'/vendor financing dynamic, reviving concerns about AI bubble (BBG)

• OpenAI plans a $1tn expansion of computing warehouses, including a major site in Texas (FT)

• OpenAI, SoftBank and Oracle investing $400bn to expand Stargate with new AI data center sites (AX)

TARIFFS

• Trump administration proposes new H-1B visa process favoring higher-skilled, better-paid workers (RT)

• India will ask US to ease access for its skilled workers at current round of trade talks (WSJ)

• Canada PM Carney sees more trade opportunities with China and expects to meet with President Xi (BBG)

CENTRAL BANKS

• Fed Chair Powell sees challenging situation from upside inflation risks and downside labor-market risks (FT)

• ECB's Cipollone sees no major inflation threats, indicating stable interest rates amid resilient economy (BBG)

• Chicago's Goolsbee warns against series of rate cuts, says labor market slowdown not a necessarily a recession sign (FT)

ECONOMY

• Japan manufacturing contracts at quickest pace since March, services remains in expansion (RT)

• Australian monthly inflation comes in hotter, reinforcing expectation of gradual rate cuts (BBG)

• Taiwan export orders in August rise for seventh straight month, beating forecast on strong AI demand (RT)

ASX TODAY

• Very quiet morning in terms of news and corporate updates, ASX 200 set to pull back in-line with Wall Street, let's see where the dust settles

• Monadelphous Group awarded new construction contracts with BHP and Fortescue, combined value of $220m (MND)

WHAT TO WATCH TODAY

• Lithium: VanEck Rare Earth/Strategic Metals ETF up 6.4%, largely thanks to the potential US equity stake in Lithium Americas. Unclear what kind of impact this has on local names.

• Copper: Copper prices rallied 4.0% after Freeport-McMoRan said a force majeure was declared from its second largest mine. This follows a major incident at the site two weeks ago, where 800,000 metric tonnes of mud flowed into underground levels. The price spike drove the Global X Copper Miners ETF 3.3% higher but off session highs of 5.0%.

BROKER MOVES

• Charter Hall Retail REIT upgraded to Outperform to Neutral; target up to $4.41 from $4.12 (MQG)

• Pilbara Minerals upgraded to Neutral from Sell; target up to $2.30 from $2.25 (UBS)

• Scentre Group upgraded to Neutral from Underperform; target up to $4.15 from $3.51 (MQG)

• Vicinity Centres upgraded to Neutral from Underperform; target up to $2.49 from $2.21 (MQG)

 Stocks trading ex-dividend: 

• Thu 25 Sep: Ambertech (AMO) – $0.006, PRL Global (PRG) – $0.02, Salter Brothers Emerging Companies (SB2) – $0.02, Teaminvest Private Group (TIP) – $0.015, Verbrec (VBC) – $0.001, Wiseway Group (WWG) – $0.006

• Fri 26 Sep: SRG Global (SRG) – $0.03, Veris (VRS) – $0.002

• Mon 29 Sep: Energy One (EOL) – $0.075, FOS Capital (FOS) – $0.01, Garda Property Group (GDF) – $0.02, Gold Road Resources (GOR) – $0.437, Gryphon Capital Income Trust (GCI) – $0.012, Lindsay Australia (LAU) – $0.015, Rural Funds (RFF) – $0.029, Shine Justice (SHJ) – $0.035, Sims (SGM) – $0.13

• Tue 30 Sep: Genusplus Group (GNP) – $0.036, Staude Capital Global Value Fund (GVF) – $0.033, Tasmea (TEA) – $0.06

• Wed 1 Oct: Cedar Woods Properties (CWP) – $0.19, Nick Scali (NCK) – $0.33

• Thu 2 Oct: ARB Corporation (ARB) – $0.35, Cosol (COS) – $0.012, Imperial Pacific (IPC) – $0.07, London City Equities (LCE) – $0.025, Wam Strategic Value (WAR) – $0.03

• Fri 3 Oct: Steamships Trading (SST) – $0.128

Other ASX corporate actions today: 

• Dividends paid: Accent Group (AX1), AGL Energy (AGL), Air New Zealand (AIZ), Amcor (AMC), Ampol (ALD), Apiam Animal Health (AHX), ARN Media (A1N), Ariadne Australia (ARA), Bapcor (BAP), Bega Cheese (BGA), BHP Group (BHP), Cue Energy Resources (CUE), EQT Holdings (EQT), EVT (EVT), GR Engineering Services (GNG), IDP Education (IEL), Iluka Resources (ILU), Kip McGrath Education Centres (KME), LGI (LGI), Monadelphous Group (MND), Netwealth Group (NWL), Northern Star Resources (NST), Prime Financial Group (PFG), Pro Medicus (PME), Ramsay Health Care (RHC), Rio Tinto (RIO), Telstra Group (TLS), The Lottery Corp (TLC), Universal Store Holdings (UNI).

• Earnings: Liontown (LTR), Premier Investments (PMV), Soul Patts (SOLDA)

• IPOs: None

• AGMs: Air New Zealand (AIZ), Suncorp (SUN)

Economic calendar (AEST):

• 10:30 pm: US Durable Goods Orders (Aug)

• 10:30 pm: US Q2 GDP Growth