Morning Wrap: ASX 200 to rise + 3 broker initiations + The charts of the week

ASX 200 futures are up 12 points, or 0.16% to 7,166 as of 7:30am AEST.

The value trade was in vogue last night with the Dow Jones being the clear outperformer among the major market indices. Bank stocks rallied after all of them passed the Federal Reserve's annual stress test. On the macro front, the US economy expanded by 2% in the first quarter of 2023 and a downtick in unemployment claims is providing the bulls with a sigh of relief. Chinese PMIs will headline the final day of the financial year.

Let's dive in.

S&P 500 Session Chart

A rally was sparked two hours before the close and the chart never looked back. (Source: TradingView)

MARKETS

• Tiger Global turned down hundreds of bids for private asset, seeing offers as too low

• Fed stress test shows big US banks can withstand severe recession and CRE turmoil

• Bank of America sitting on $100B in unrealized losses at end of Q1

• AI driving a fresh wave of corporate acquisitions as businesses seek to build their strategies

• M&A deal volumes down more than $1T so far in 2023, smallest first half total in a decade

STOCKS

• Morgan Stanley's board to focus on selection of next CEO at summer and fall meetings

• Polestar the latest EV maker to plan to adopt Tesla charging standard

• Google set to remove news links in Canada amid new law requiring payment to publishers

• China's Shein confidentially files for IPO; could come before year's end

ECONOMY

• World's top central bankers flag more tightening in response to still-elevated inflation

• Sweden's central bank hiked rates by 0.25% and signaled at least one more hike this year

• Spanish inflation cools in June, falling below 2% for the first time in two-years

• Former IMF official says China likely to underwhelm on stimulus

The Nickel and Aluminium ETFs have been removed and will be replaced by Invesco Agriculture ETF (DBA) and Invesco Construction ETF (PKB). Changes coming soon. A new education piece is out about the above ETF list. If you want to learn more about why this list can be helpful (or you just want to suss what the tickers are) read here.

Charts of the Week

This segment of the morning wrap brings you weekly technical commentary on the ASX 200 and some of the more interesting charts in the market. These are not meant as recommendations. They are for illustrative purposes only. Any discussion of past performance is for educational purposes only. Past performance is not a reliable indicator of future return. Always do your own research. ASX 200 – Back in the zone

As quickly as the market broke higher, it faded back into the muck. That’s what we’ve seen over the past week, with the false break up towards 7400 fading back to the bottom side of the range near 7100. With reporting season around the corner, we’re likely to the index grind sideways from here. At least there are some stocks that are trending.

AUB Group (ASX: AUB) – Retest confirmed

After grinding sideways for an extended period, AUB broke higher recently above the $28 resistance level. The price action has since been back to retest and confirm this breakout region as support and bounce higher. Volumes have been solid and the RSI is not overcooked. The bulls appear as thought they’re willing to carry this one higher.

Overnight broker initiations

• Emerald Resources (ASX: EMR) initiated OVERWEIGHT at Barrenjoey, price target of $2.50/share

• CSR (ASX: CSR) initiated HOLD at Bell Potter, price target of $5.60/share

• ProMedicus (ASX: PME) initiated HOLD at Jefferies, price target of $63/share

Trading ex-div:

• Abacus Property Group (9.4cps)

• Listings: None

Economic Calendar:

• 9:30 am – Tokyo Area CPI

• 11:30 am – Chinese manufacturing PMI

• 7:00 pm – Eurozoone CPI Flash estimate

• 10:30 pm – Canada GDP, US core PCE

• 12:00am – US consumer sentiment