Morning Wrap: ASX 200 to open flat, Nvidia turmoil weighs on S&P 500 and Nasdaq despite posting weekly gains

In a nutshell:

• Major US benchmarks mostly fell as chipmakers slumped again, though the S&P 500 still rose 2.5% for the week and the Nasdaq posted its best week since August

• Nvidia faces mounting Washington pressure ahead of Tuesday’s results, with Treasury Secretary Bessent calling for a leadership overhaul and Senate Republicans seeking Lutnick’s testimony on China chip controls

• Iran said several tankers struck naval mines in the Strait of Hormuz over the weekend, while Houthis took control of the Bab el-Mandeb chokepoint after Yemeni forces withdrew

Let's dive in.

• Major US benchmarks mostly lower, S&P 500 and Nasdaq opened higher on producer price data but turned negative in morning trade as Nvidia selling resumed

• A closely watched gauge of chip giants sank 3.4% and Nvidia lost 13% this week, its worst since April 2025. Annex Wealth’s Brian Jacobsen said the real test is whether Nvidia’s order book has changed when it reports on 17 November

• Brent settled near US$96 a barrel for a second weekly decline after the IEA said the oil market will be in surplus this quarter for the first time since the Iran war began

• Treasuries capped a punishing week, with the two-year yield up 35 basis points, the most in more than two years, as stubborn inflation and hawkish Fed rhetoric left traders bracing for more hikes

• Bitcoin fell below US$70,000 for the first time since August, extending a two-day slide of as much as 9% as inflation and rate-hike concerns weighed on crypto

• US and European bond yields rose on Friday. SEB’s Jussi Hiljanen said upside growth surprises suggest Fed policy isn’t yet restrictive, supporting the case for more tightening (WSJ)

• The Fed’s semi-annual Financial Stability Report flagged elevated asset valuations, partly driven by enthusiasm for AI, as a key vulnerability, tempered by concerns over tech capex and debt issuance (BBG)

• Goldman Sachs strategists led by Peter Oppenheimer forecast the S&P 500 reaching 8,700 within 12 months, a 14% gain, arguing the tech selloff has left hyperscaler valuations historically cheap (BBG)

• BofA’s Michael Hartnett said global equity funds are drawing record inflows of US$1.4tn annualised, including US$656bn into US equity funds and US$222bn into tech, with few investors making bearish bets (BBG)

• JPMorgan expects AI spending and refinancing needs to drive record US investment-grade bond issuance of US$2.1tn in 2027, topping this year’s projected US$2tn record (BBG)

• Blackstone-backed data centre operator QTS is cutting a planned private debt sale by about 60% to roughly US$300m after struggling to attract investor demand at the yields it offered (BBG)

• Treasury Secretary Scott Bessent said Nvidia needs a major leadership overhaul and demanded answers on export controls, intensifying pressure on its CEO search after Jensen Huang’s ouster. Some Huang backers are campaigning for his return ahead of Tuesday’s results (BBG)

• Banks on Anthropic’s IPO have rebuffed orders from mainland China and Hong Kong institutional investors, partly due to US defence-trade rules, ahead of a planned Nasdaq debut under the ticker ANT (BBG)

• Microsoft struggled to restore Outlook, Teams and other services after a global outage disrupted companies and governments worldwide (AP)

• Samsung Electronics is in talks to acquire Modine Manufacturing, a US maker of data-centre cooling systems valued at about US$5.6bn, with a deal possible in the coming weeks (BBG)

• China and the US held the first meeting of a new trade council by video, discussing a reciprocal US$30bn-for-US$30bn tariff-cut arrangement and agricultural trade, Beijing’s Commerce Ministry said (BBG)

• Trump will meet Xi Jinping on Thursday on the sidelines of APEC in Shenzhen, with a proposed US$60bn reciprocal tariff-cut package, including about US$17bn of US farm goods, yet to be finalised (CNBC)

• Commerce Secretary Howard Lutnick faces scrutiny over Nvidia AI chips reaching China after Treasury Secretary Bessent blamed his department for failing to blacklist Singapore-based Megaspeed over possible violations (BBG)

• Senate Republicans are pressing Lutnick to testify before Congress over allegations the Commerce Department failed to stop Nvidia’s AI chips reaching China (BBG)

• Boston Fed President Susan Collins said some additional policy tightening will soon be appropriate given high inflation, suggesting rates may need to rise further than she initially expected (RT)

• San Francisco Fed President Mary Daly said the Fed will in all likelihood need to raise rates, flagging inflation moving in the wrong direction and signs of persistence (RT)

• Fed officials locked in expectations for a December rate hike through a blitz of speeches this week and opened the door to a January follow-up, which would be the first back-to-back increases since 2023 (BBG)

• German Chancellor Friedrich Merz said Berlin will put forward a proposal next week for a package filling three top ECB posts, including President Christine Lagarde’s role (BBG)

• Iran’s Revolutionary Guards navy said two tankers caught fire after hitting naval mines in the Strait of Hormuz on Sunday, claims Reuters could not independently verify (RT) arabnews

• Iran’s navy said three oil tankers caught fire on Saturday after hitting naval mines in the Strait of Hormuz, according to Iranian state media (RT)

• Yemeni government forces withdrew from the area overlooking the Bab el-Mandeb Strait, leaving Iran-backed Houthis in control of the Red Sea chokepoint while Iran disrupts Hormuz traffic (RT)

• US PPI rose 0.3% month-on-month in October vs ests of 0.4%, and 6.5% year-on-year vs 6.6% ests, the fastest annual pace since November 2022. Core PPI rose 0.3% month-on-month, in line with ests (AP)

• Eurozone Q3 GDP growth was confirmed at 0.4% quarter-on-quarter, slowing from 0.6% in Q2, with Ireland up 5.5% on AI-related investment and France contracting 0.1% (TE)

• Contact Energy’s October mass market electricity and gas sales rose 10% to 422GWh, with customer netback up 4% to NZ$152.13/MWh. Wholesale electricity and steam net revenue fell 10% to NZ$105.42/MWh under a revised internal transfer pricing methodology, and contracted wholesale sales rose 3% to 1,027GWh (CEN)

• Southern Cross Electrical Engineering’s Heyday and Force Fire businesses have won more than $300m of data centre and buildings contracts, the largest single announcement of works in the group’s history. The awards include Heyday’s electrical design and construct contract for the initial stage of NEXTDC’s S4 data centre in Horsley Park, NSW, due to complete in early 2028, and several ACT buildings projects (SXE)

• Vulcan Energy has started civil construction at the Lithium Extraction Plant site for its Lionheart lithium and geothermal project in Germany, completing all major execution milestones it set for 2026. The project remains on schedule and within budget and targets first production in the second half of 2028, with planned capacity of 24,000 tonnes of lithium hydroxide a year (VUL)

Stocks trading ex-dividend: 

• Mon 16 Nov: Plato Income Maximiser (PL8) – $0.006, Spheria Emerging Companies (SEC) – $0.011, WAM Alternative Assets (WMA) – $0.03

• Tue 17 Nov: Global Masters Fund (GFL) – $0.15, L1 Global Long Short Fund (GLS) – $0.02, L1 Long Short Fund (LSF) – $0.039, Solaris Australian Equity Income Plus (SET) – $0.007, WAM Active (WAA) – $0.032, WAM Income Maximiser (WMX) – $0.007, WAM Leaders (WLE) – $0.048

• Wed 18 Nov: None

• Thu 19 Nov: Rand Mining (RND) – $0.10, Tamawood (TWD) – $0.105, Tribune Resources (TBR) – $0.20

• Fri 20 Nov: None

Other ASX corporate actions today:       

• Dividends paid: Cromwell Property Group (CMW), Stanmore Resources (SMR), Autosports Group (ASG)

• IPOs: None

• AGMs: BlueScope Steel (BSL)

Economic calendar (AEDT):

• 1:00 pm: China Industrial Production