Morning Wrap: ASX 200 to open at record highs, S&P 500 inches up despite tech underperformance

The S&P 500 continues to edge closer towards record levels while the Nasdaq struggled to tick higher overnight amid weakness from heavyweights Apple and Nvidia, gold prices set another record close but miners are struggling for further upside and everyone's waiting for the Fed rate cut on Thursday morning.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher in a relatively quiet session (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished mostly higher amid a relatively quiet session after stocks caught a big bounce last week

• S&P 500 closed within 1% of all-time highs while the Equal-weight S&P hit a record high

• Apple (-2.7%) and Nvidia (-1.9%) weighed on benchmarks but breadth was positive

• Today’s big story – Not a whole lot going on as the market waits for the Fed’s rate cut decision on Thursday, the market continues to price in 50 bp cut as the likely outcome

• Goldman Sachs says the second half of September is seasonally the worst two-week trading period of the year – since 1928, medium S&P return is negative in the 10 out of the last 11 days to finish the month

• US corporate buybacks, the biggest source of US equity demand, is expected to decline approximately 35% during buyback blackout window from 13-Sep

• Market positioning starting to normalise – Goldman says its sentiment indicator is down to Oct-23 levels (which was when the market bottomed last year)

• Dollar slides to weakest level since Jan-24 on growing bets of 50 bp Fed rate cut (BBG)

• Goldman Sachs prime brokerage desk says hedge funds switch to buying banks, insurance and trading firms (RT)

• Aluminium prices spike following report alumina refinery in India collapsed (BBG)

• Citi says both Trump and Harris will be negative for stocks (CNBC)

STOCKS

• Boeing announces wide-ranging cost cutting actions including cuts to supplier spending and hiring freeze (BBG)

• Analysts see shorter global shipping times indicating weaker-than-expected iPhone 16 demand (RT)

• Charles Schwab says revenue is rebounding; Q3 revenue likely to rise as much as 3% after dropping in Q2 (BBG)

• Vista, Blackstone in advanced talks to acquire Smartsheet in US$8bn deal (RT)

CENTRAL BANKS

• Fed enters tricky territory amid cutting rates in a decent economy (BBG)

• BoE expected to hold this week but growing number of investors want more aggressive action (BBG)

• BlackRock says Fed will likely not cut rates as deeply as market expects due to resilient economy (RT)

• ECB's Kazaks says rates to continue to come down, though not too fast given lingering inflation risk (BBG)

POLITICS & GEOPOLITICS

• Trump safe, assassination suspect Ryan Routh charged in federal court with two gun-related crimes (RT)

• US clamp downs on the tax-free import of Chinese goods imposes fresh uncertainty on China e-commerce giants (Bloomberg)

ECONOMY

• Economists lower 2024 projections for China's economic growth to 4.7% (RT)

ASX TODAY

• IGO changes focus to M&A, considers acquiring Rio Tinto asset (The Aus)

• Regal Partners is weighing up a bid for Platinum Asset Management (AFR)

• Star Entertainment lands $100m instant cash injection in bailout deal (AFR)

• Tabcorp’s institutional investors are seeking further board renewal as shares are down more than 50% year-to-date following disappointing earnings (AFR)

WHAT TO WATCH TODAY

There's not a whole lot going on. Defensive and cyclical sectors outperformed overnight (led by Financials. Energy and Materials) which should push the ASX 200 further into record territory. Gold closed at another record high but Gold Miners struggled to capture any further upside.

BROKER MOVES

• Generation Development Group initiated with $3.49 target (JEFF)

• Red 5 initiated with $0.40 target (JARD)

Stocks trading ex-dividend: 

• Tue 17 Sep: Base Resources (BSE) – $0.065, Duratec (DUR) – $0.025, Wotso Property (WOT) – $0.01, Cochlear (COH) – $2.10, Maas Group (MGH) – $0.035

• Wed 18 Sep: Flight Centre (FLT) – $0.30, Adrad (AHL) – $).016, Sports Entertainment Group (SEG) – $0.02, Supply Network (SNL) – $0.33, Service Stream (SSM) – $0.025, Auckland International Airport (AIA) – $0.059  

• Thu 19 Sep: Mader (MAD) – $0.04, Auswide Bank (ABA) – $0.11, Embelton (EMB) – $0.20, Tourism Holdings (THL) – $0.046, Midway (MWY) – $0.161, South32 (S32) – $0.046, Motorcycle Holdings (MTO) – $0.07, IPD Group (IPG) – $0.062, Count (CUP) – $).022, Enero Group (EGG) – $0.02, NRW Holdings (NWH) – $0.09, Lycopodium (LYL) – $0.40

• Fri 20 Sep: Inghams (ING) – $0.08, Vita Life Sciences (VLS) – $0.035, Capitol Health (CAJ) – $0.004, Eureka Group (EGH) – $0.007, Blackwall (BWF) – $0.025 

Other ASX corporate actions today: 

• Dividends paid: Objective Corp (OCL), Whitehaven Coal (WHC), Dalrymple Bay Infrastructure (DBI)

• Listing: None  

• AGMs: Webjet (WEB)

Economic calendar (AEST):

• 10:30 pm: Canada Inflation (Aug)

• 10:30 pm: US Retail Sales (Aug)