Morning Wrap: ASX 200 to fall, US markets fall from record highs, Dow records worst day of 2024

Last night proved that some people still stick to the old adage - they sell in May and go away (or in this case, sell before a May long weekend they have coming up). The Dow Jones recorded its worst day in nearly a year yesterday with all 30 components of that index closing in the red.

Hot services PMI data also did its bit to send US markets lower - the number printed above expectations to a 12-month high. Hot services PMI readings will indicate rate cuts are even further away than investors expect.

All this negativity has filtered through to ASX futures this morning - and there are no immediate corporate catalysts that can change that (for now).

Let's dive in.

S&P 500 SESSION CHART

Sell, sell, sell. (Source: TradingView)

OVERNIGHT MARKETS

• Dow falls 600 points in worst day of 2024 as Nvidia's earnings fail to lift broader market

• Europe stocks close slightly higher as investors assess data; tech jumps 1% after Nvidia earnings

• Treasury yields climb on positive economy and labor data

• Oil prices fall for fourth session ahead of busy Memorial Day travel weekend

• Gold slips to over one-week low on hawkish Fed, US data

MARKETS

• Morgan Stanley tells investors to avoid hedge funds’ overcrowded trades

• JPMorgan’s Jamie Dimon says can’t rule out ‘hard landing’ for the U.S., stagflation will be ‘worst outcome’

• Dow transportation stocks are ‘area of potential concern’ for stock-market bulls

• The stock market’s entire return rests on a surprisingly small number of days

The answer to the above is just 9 days! And given this is historically normal rather than abnormal, it's proof that it's time in (and not timing) the market which makes all the difference.

INTERNATIONAL STOCKS

• Tesla CEO Elon Musk says he favors ‘no tariffs’ on Chinese EVs

• Alibaba bets on AI to fuel cloud growth as it expands globally to catch up with U.S. tech giants

• Biggest US retailers cutting prices amid consumer fatigue from three years of elevated inflation

• DuPont to split into three companies, separate out electronics and water divisions

• Intuit raises full-year forecast, and says AI is helping

• BHP's $49B bid for Anglo American still faces South Africa hurdle

• South Korea unveils $19B package to boost domestic semiconductor industry

ECONOMY

• ECB says Eurozone negotiated wages rose 4.69% y/y in Q1 2024 versus 4.50% in Q4 2023

• Eurozone composite PMI at 12-month high, PMI shows slower UK expansion as services sector activity dips

• Japan flash manufacturing PMI returns to expansion but details relatively soft

• G-7 finance ministers sideline debt concerns amid rising fiscal challenges

CENTRAL BANKS

• ECB's Schnabel sees economic revival as rate cuts draw near

• Major banks push back BoE rate cut from June to August, with markets seeing only 25bps of easing in 2024

• Elevated services inflation supporting case for another BOJ rate hike

• RBNZ Governor Orr says will only hike rates again if inflation expectations get away

• BOK keeps rates on hold, notes upside inflation risks have increased

Trading ex-dividend this week:

• Whitefield (WHF) - 24 May -$0.102

Economic releases:

• 9:30 am – JPY – National core CPI

• 4:00 pm – EUR – German final GDP, British retail sales

• 10:30 pm – CAD – Core retail sales, corporate profits

• 10:30 pm – USD – Durable goods order

• 12:00 midnight – USD – University of Michigan revised consumer sentiment and inflation expectations

This Morning Wrap was written by Hans Lee and Chris Conway.