Morning Wrap: ASX 200 to rise

In a nutshell:

• Major US benchmarks up for a second straight session, led by a rotation back into Mag-7 names like Apple (+4.0%), Alphabet (+3.6%) and Meta (+3.0%)

• US June producer prices was cooler-than-expected, slightly easing Fed rate hike expectations and sending bond yields lower for a second straight session

• PayPal jumped 17% on a takeover approach from Stripe and Advent worth more than US$53bn, while ASML lifted the AI-chip mood with a raised full-year outlook

Let's dive in.

• Major US benchmarks reversed early weakness to finish higher

• Investors rotated out of semis into megacaps, with Apple, Alphabet, Amazon and Meta all up 3-4%, while Micron (-8.0%), Intel (-4.4%) and AMD (-3.4%) sold off

• Breadth was still weak, with six sectors trading lower and the Equal-weight S&P 500 (-0.22%) underperforming by 50 bps 

• Softer-than-expected June PPI reinforced Wednesday’s cool CPI, further trimming the risk of a near-term Fed hike and sending bond yields down for a second day

• Rush of equity and bond issuance, buyback slowdowns seen as risk to bull market (WSJ)

• Soft US CPI data sees bond traders shift focus to September or October for possible rate hike (BBG)

• Margin loans, single-stock leveraged ETFs and extreme concentration fueling Korean market volatility (BBG)

• South Korea's President says Kospi's rapid surge needs time to stabilise after volatility tied to leveraged products (BBG)

• US mounted a fourth straight night of attacks against Iranian targets overnight while Iran continued hitting US regional allies, including launching a heavy wave of strikes against Kuwait (BBG) 

• Tehran threatened to block all regional oil-export routes in response to the US naval blockade (CNN)

• Only a handful of ships transited the Strait of Hormuz on Wednesday after US resumed its naval blockade (BBG)

• Chinese oil refiners cut output last month to weakest in six years amid weak demand and Persian Gulf crude disruptions (BBG)

• Apple gained 4% to an all-time high after a report the company won approval to launch its generative AI features in China (YF)

• ASML Q2 FY26 net sales of €9.3bn with a 54% gross margin and €2.9bn net income, and it raised full-year sales guidance to €43bn-45bn, shares up 2.2% (YF)

• Morgan Stanley Q2 FY26 EPS US$3.46 beat the US$2.94 ests on revenue of US$21.35bn against US$19.64bn ests, with shares up 0.3% (BBG)

• BlackRock Q2 FY26 EPS US$13.91 on revenue of US$7.08bn beat estimates, with shares rallied 6.6% (CNBC)

• PayPal surged 17% on record volume after Stripe and Advent International offered US$60.50 a share, valuing the payments group at more than US$53bn (CNBC)

• SpaceX fell below its US$135 IPO price for the first time, a fourth straight down session, cutting its market value to about US$1.75tn from a post-listing peak near US$2.6tn (BBG)

• DeepSeek annualised revenue nears $500m as company eyes potential Shanghai IPO next year (TI)

• China chip exports surged 96% in H1 amid global AI boom, demand for industrial robots and other high-tech products similarly robust (SCMP)

• Fed Chair Warsh says higher prices driven by AI not necessarily inflationary (BBG)

• Fed's Williams says inflation has peaked and should edge lower, rates are 'well positioned' (CNBC)

• Bank of Canada held rates at 2.25% for a sixth straight meeting, with Governor Tiff Macklem warning it may need to raise rates if oil prices spike (RT)

• Bank of Canada cut its 2026 growth forecast to 0.7% from 1.2% and lifted its 2026 inflation forecast to 2.5% from 2.3%, citing the Middle East conflict (RT)

• US June core PPI up 0.2% month-on-month vs. 0.4% ests, annualised core at 4.7% vs. 5.2% ests, headline PPI down 0.3% month-on-month vs. flat ests and the coolest print since May-25, final demand goods prices fell 1.4%, the largest monthly decline since Jul-22 driven by falling energy prices

• Nearly two-thirds of the June PPI decline came from gasoline, which dropped 12%, alongside falls in diesel, jet fuel and crude petroleum 

• China Q2 GDP growth falls below government's 2026 target range amid weak domestic demand (BBG)

• Australian Ethical Investment reports 30-Jun FUM of $14.50b, up 6.9% on $13.57b at 31-Mar. Retail and wholesale net flows $0.17b, institutional net flows $0.12b, and market & other $0.65b (AEF)

• Champion Iron appoints Michael Marcotte as CFO. Marcotte joined in 2018 and most recently served as Senior VP of Corporate Development and Capital Markets (CIA)

• Ora Banda Mining reports Q4 gold production of 39.6koz, a 1.5% beat vs ests of 39.0koz, though Q4 AISC of $3,870/oz came in 9% above ests of $3,548. FY26 gold prod of 141koz landed within guidance of 140-155koz at AISC of $3,496/oz. Guides FY27 production 125-140koz, AISC $3,400-3,600/oz and growth capex $425m (OBM)

• Perpetual receives a revised non-binding indicative bid at $22.07/share from EQT-backed Windflower, a 2% bump on EQT AB's original $21.64 offer. Conditional on completion of the Wealth Management sale to Bain Capital (PPT)

• Telix doses first patients in its OPTIMAL-e trial of TLX597-Tx, a single-arm, open-label study run with St Vincent's Hospital in men with metastatic hormone-sensitive prostate cancer (TLX)

• Not a whole lot: A fairly uneventful session on Wall Street, where the old guard (Mag-7) powered the indices higher. Chinese lithium carbonate futures fell 2.1% on Wednesday, pressuring lithium equities overnight, with Albemarle (-3.1%) and SQM (-1.9%) trading lower. Fintech stocks were bid up after the Paypal takeover offer, though the news dropped yesterday afternoon and names like Block (+5.1%) and Zip (+8.4%). NYSE-listed Block shares rose 2.2% overnight to US$81.81 vs. ASX-listed shares that closed at $118.15 (so we ran too much, US$81.81 implies a $116.75 open).

• Ampol downgraded to Neutral from Buy; target up to $36.65 from $31.50 (UBS)

• Coles Group downgraded to Neutral from Overweight; target cut to $23.50 from $24.10 (JPMorgan)

• Metcash upgraded to Neutral from Sell; target up to $3.00 from $2.80 (Citi)

• Woolworths downgraded to Sell from Neutral; target up to $36.00 from $34.00 (Citi)

Stocks trading ex-dividend: 

• Thu 16 Jul: None

• Fri 17 Jul: Wam Income Maximiser (WMX) – $0.006

• Mon 20 Jul: None

• Tue 21 Jul: None

• Wed 22 Jul: None

Other ASX corporate actions today:       

• Dividends paid: Graincorp (GNC) 

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 4:00 pm: UK GDP

• 10:30 pm: US Retail Sales