Morning Wrap: ASX 200 to push fresh record highs, S&P 500 extends gains amid US-China trade talks

ASX 200 futures are up 24pts (+0.27%) as of 8:30 am AEST.

In a nutshell:

• The S&P 500 and Nasdaq are both within 2.3% of all-time highs

• A relatively uneventful overnight session, with limited details on current US-China trade talks

• Stocks and sectors broadly higher overnight, though weakness noted in sub-sectors like uranium and gold

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher, finished near best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks higher and finished near best levels, with the S&P 500 and Nasdaq both within 2.3% of all-time highs

• A relatively uneventful session, with the market keenly focused on ongoing US-China trade talks, tonight’s US CPI print and Friday’s 30-year bond auction

• US stocks see further upside as institutional investors will abandon their cautious stance and increase exposure to equities (BBG)

• Citi says US tech attracting a flurry of bullish bets as optimism around the economic outlook overshadows trade concerns (BBG)

• Section 899 from Trump-era tax law may drive foreign investors from US markets (CNBC)

• Asia's 'buy the dip' traders are now backing away, investors from South Korea and Japan turned net sellers of US equities and ETFs (BBG)

STOCKS

• IBM announces plan for new large-scale quantum computers, including new processor (CNBC)

• Apple unveils new OS redesign, Mac OS and announces updates to Apple Intelligence, giving developers access (AX)

• Nvidia and Hewlett Packard collaborating to build the Blue Lion supercomputer, set for 2027 (RT)

• OpenAI says annual recurring revenue has almost doubled to $10bn from $5.5bn a year ago amid surging demand for ChatGPT (FT)

• Novo Nordisk shares hit a two-month high after reports activist hedge fund Parvus Asset Management has acquired a stake (FT )

• TSM's May revenue soared 40% as chip stockpiling rose amid trade fears, AI demand remains strong (BBG)

CENTRAL BANKS

• BOJ Governor Ueda reiterates readiness to tighten if confidence in inflation target improves, but comments lean dovish (RT)

• Bessent reportedly being considered as potential candidate for Fed chair, though White House denies (BBG)

• Fed seen holding in June, with next cut unlikely until September (RT)

• Bank of Mexico to cut by another 50 bp this month despite inflation concerns (RT)

TARIFFS & GEOPOLITICS

• US-China trade talks in London continue into evening for second day, third day of talks is possible, still light on details (RT)

• US concludes four days of constructive trade talks with India, interim deal seen by the end of June (RT)

• US-China trade war escalates with new trade weapons, including visa threats, export controls and restrictions on goods like jet engines and ethane to gain leverage in trade dispute (BBG)

• China rare earths export curbs fuel alarm among global autos, defense about longer-term supply chain disruptions (RT)

• Federal appeals court nears decision on pausing ruling against Trump-era tariffs (BBG)

• Trump expressed worry that Iran is seeking too much in potential nuclear deal, including the ability to enrich uranium (BBG)

ECONOMY

• China taps 10.9t yuan fund to boost its housing sector, providing alternatives to bank mortgages (BBG)

• UK retail sales growth slows sharply in May, as higher prices and bills squeezed household budgets (BBG)

• Investor sentiment in Eurozone improved in June, with Germany's index at its highest since March 2022 (RT)

• Japan to enter slight technical recession in first half of 2025 (NK)

• Australian consumer sentiment rises in 'cautious pessimism' (BBG)

• World Bank cuts 2025 global growth projection to 2.3% from prior 2.7%, with trade discord seen as a drag (CNBC)

ASX TODAY

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WHAT TO WATCH TODAY

• ASX 200 makes a clear move to all-time highs: Futures are up, pointing to a clear move into record highs. Ten out of eleven US sectors finished higher overnight, with sectors like Energy, Discretionary, Health Care and Telcos all up more than 1.0%.

• NextDC, Metcash: These two stocks gained 5.1% and 3.5% respectively on Tuesday. NextDC announced another utilisation update, highlighting contract momentum in Malaysia. While Metcash provided an FY25 guidance upgrade that was slightly ahead of consensus expectations. Wouldn't be surprised to see analysts slightly lift their earnings forecasts and target prices today.

• Uranium, Gold weakness: Bit of a pullback for these two strong trending sectors, with the respective ETFs down 3.2% and 1.3% overnight.

BROKER MOVES

• Beach Energy downgraded to Neutral from Buy; target cut to $1.35 from $1.40 (UBS)

• SiteMinder initiated Outperform with $6.09 target (MQG)

Stocks trading ex-dividend: 

• Wed 11 Jun: Infratil (IFT) – $0.104, Tower (TWR) – $0.074, WCM Global Growth (WQG) – $0.019

• Thu 12 Jun: Champion Iron (CIA) – $0.112, Dominion Income Trust 1 (DN1) – $0.617, Transmetro Corporation (TCO) – $0.05

• Fri 13 Jun: Dyno Nobel (DNL) – $0.024, Plato Income Maximiser (PL8) – $0.006

Other ASX corporate actions today: 

• Dividends paid: None

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

10:30 pm: US Inflation (May)