Morning Wrap: ASX 200 to fall, S&P 500 slips ahead of Fed decision, RBA poised for a hawkish hold

ASX 200 futures are down 26pts (-0.30%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks mostly lower though Russell 2000 managed to close around breakeven

• Equal-weight S&P 500 down 0.60%, reflecting relatively broad weakness. Every S&P 500 sector was down expect tech

• Markets largely expecting a hawkish Fed cut on Thursday. This dynamic is driving bond yields slightly higher, with the US 10-year up 3 bps overnight to 4.17% (highest since September)

Let's dive in.

S&P 500 SESSION CHART

S&P 500 trended mostly lower, closed near intraday lows (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished a little lower, near worst levels

• Bond yield back up was the main downward driver, with the US 10-year yield up 3 bps to the highest since 26 September

• Markets largely expecting a hawkish Fed cut on Thursday, as broadening dissents could weaken their policy message

• JPMorgan warns recent US equity rally may stall post-Fed rate cut as investors take profits (BBG)

• Oppenheimer says S&P 500 may rally 18% next year, targeting 8,100 pts by end-2026 (BBG)

• Investors pivot from tech giants to small-caps, with Russell 2000 gaining 9.4% as 2025 laggards see revival towards year end (BBG)

• Bonds reacts unusually to Fed rate cuts with rising yields (BBG)

• Speculation mounts for BOJ rate hike, though market continues to bet on weaker Yen (BBG)

STOCKS

• Google tells ad clients it plans to bring ads to Gemini in 2026 (AW)

• Paramount launches hostile bid for Warner Bros Discovery for $30 a share in cash (BBG)

• Apple's chip boss Johny Srouji squashes exit rumors, says he's not leaving the company (CNBC)

• Trump raises antitrust concerns regarding Netflix's planned $72bn acquisition of Warner Bros (BBG)

• IBM in advanced talks to acquire Confluent for ~$11bn to boost cloud push (WSJ)

• Eli Lilly's Mounjaro to be added to China's health insurance scheme for type 2 diabetes (RT)

• Berkshire Hathaway announces multiple leadership changes, including departure of Todd Combs (CNBC)

• Magnum Ice Cream debuts at €12.96 per share, reaching a market cap of €7.93bn after Unilever spinoff (RT)

TARIFFS

• Trump to announce $12bn farm aid package for farmers affected by low crop prices and tariffs (BBG)

CENTRAL BANKS

• Survey shows Fed expected to cut rates amid mixed views on US economic outlook, with concerns over weak jobs and high prices (FT)

ECONOMY

• China's annual trade surplus surpasses $1tn, with November exports growing 5.9% (BBG)

• China's Politburo plans to expand domestic demand with proactive fiscal and loose monetary policies in 2026 to drive growth (BBG)

• Japan's PM Takaichi announces $135bn stimulus relying on bond markets for 60% funding (WSJ)

• Japan's GDP dipped 2.3% in Q3 marking first contraction in six quarters (BBG)

ASX TODAY

• Very slow on the news front heading into mid-late December, don't be surprised if there's only a few dot points here

• Bapcor issues trading update, guides to 1H26 NPAT of 5-8m, notes trading performance in October and December below expectations (BAP)

• ResMed receives FDA clearance for personalised therapy comfort settings, ‘Smart Comfort’ will launch in early 2026 in limited US beta version (RMD)

• Southern Cross Media Group holder ARN Media cuts holding from 14.8% to 6.83% via 19.1m share block trade at 75 cents per share, holder Samuel Terry discloses purchase of 19.1m shares (SXL)

WHAT TO WATCH TODAY

• Word on the street: Very strong session for lithium names on Monday, with PLS up 6.0% and Liontown ripping 14.7% higher. According to China’s National Business Daily, CATL’s Jianxiawo lithium mine failed to restart production on 5 December (this was the mine that was closed due to the expiration of its mining license). The article notes “trades said that many local companies have run out of lithium ore to sell.”

• RBA decision: RBA widely expected to hold today and keep rates at 3.60% through 2026. However, Bloomberg survey notes substantial divergences among forecasters. By May 2026, consensus is pricing in a ~50% likelihood of a 25 bp hike, though a few analysts from Westpac, Bloomberg Economics and Jarden project a 25 bp cut.

BROKER MOVES

• National Storage REIT upgraded to Equal-weight from Underweight; target up to $2.86 from $2.55 (MS)

Stocks trading ex-dividend: 

• Tue 9 Dec: Beacon Minerals (BCN) – $0.05

• Wed 10 Dec: WCM Global Growth (WQG) – $0.02

• Thu 11 Dec: Premier Investments (PMV) – $0.50 

Other ASX corporate actions today:       

• Dividends paid: None

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

• 11:30 am: Australia Business Confidence (Nov)

• 2:30 pm: RBA Interest Rate Decision (Ests: Hold at 3.60%)

• 2:00 am: US JOLTs Job Openings (Oct)