Morning Wrap: ASX 200 to rise, Amazon earnings lead S&P 500 higher + Westpac FY24 results

ASX 200 futures are trading 36 points higher, up 0.44%, as of 8:30 am AEDT.

Major US benchmarks finished mixed overnight as a bumper result from Amazon was unable to offset concerns about soaring bond yields and the upcoming US election, US job growth almost stalled in October as strikes and hurricanes weighed on the jobs market and Westpac reported a mixed set of FY24 results.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 lower, finished off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished higher but well-off best levels

• US weekly recap – Russell 2000 (+0.10%), Dow (+0.15%), S&P 500 (-1.37%), Nasdaq (-1.50%)

• S&P 500 down for a second-straight week and Nasdaq snapped seven-straight weekly gains

• Risk appetite still tempered by higher yield backdrop and US election uncertainty

• Traders raising bets next week's US presidential election will trigger sharp price swings in bond and currency markets (FT)

• UK bonds sell off sharply after Labour government's budget and plans for additional bond sales spooks markets (BBG)

• China stock-bond market correlation most negative in more than four years amid rush from fixed income to equities (BBG)

• China's policy meeting next week could tip economic recovery scale or underwhelm again (WSJ)

STOCKS

• Amazon shares soar 6pc as Q3 operating income tops expectations by 18%, solid retail segment margin expansion, AWS grew 19.1% – a touch below consensus but profitability came in at a record high, AI commentary remained upbeat (BBG)

• Apple shares ease 1pc, fiscal Q4 revenue and EPS better-than-expected, however segments including Mac, iPad and Wearables lighted-than-expected, guidance for December quarter was also disappointing (RT)

• Intel guides Q4 revenue above expectations but takes $18.7bn in restructuring and impairment charges (RT)

• Berkshire Hathaway's cash position topped US$325bn at the end of September (CNBC)

• Mag 7 earnings show AI boom starting to pay off but Big Tech also warns bigger investments are coming (BBG)

CENTRAL BANKS

• BOJ likely to stay course with a rate hike in December or January (CNBC)

• RBA forecast to begin cutting rates in February (RT)

POLITICS & GEOPOLITICS

• Trump being told by his pollster that he's in a radically better position than he was right before the 2020 election (AX)

• Iran preparing major retaliatory strike from Iraq within days (AX)

• North Korea fired what may have been its biggest ever ICBM (BBG)

ECONOMY

• US October nonfarm payrolls up 12,000 vs. 113,000 consensus, strikes in the aerospace industry depressed manufacturing employment (RT)

• US October ISM manufacturing printed 46.5 vs. 47.6 consensus, new orders index remained in contraction territory, while prices index returned to expansion (RT)

• Japan October factory activity shrinks at fastest pace in 3 months in (RT)

• South Korean export growth slows but chip shipments accelerate, factory output shrinks by most in 16 months (BBG)

• China's residential property sales rose in October, the first on-year increase of 2024 (BBG)

ASX TODAY

• Austal guides to FY25 EBIT of $80m vs. $101.2m consensus but record order book of $12.7bn, management see this as the end of a transition period and start of the execution period, with years of growth ahead (ASB)

• Earlypay to conduct 27m share on-market buy-back program commencing 21-Nov for up to 12-months (EPY)

• Westpac Bank reports FY24 result, with net profit down 3% to $7.0bn, final dividend up 5.5% to 76 cps (WBC)

WHAT TO WATCH TODAY

• Westpac results: Bit of a mixed bag vs. Morgan Stanley estimates (as at 13 Oct) – Net profit 3% beat but the analysts expected a 77 cent final dividend plus a 15 cent special dividend. FY24 NIM was solid at 1.95% vs. 1.94% estimates

• Yield backup: US 10-year yield up 10 bps overnight and now up 76 bps since mid-September to a five month high. The yield backup weighed on yield sensitive sectors on Wall Street, with Utilities (-2.2%) and Real Estate (-1.0%) leading to the downside

BROKER MOVES

• Capricorn Metals upgraded to Neutral from Underperform; target up to $7 from $6.10 (BofA)

• Macquarie downgraded to Neutral from Overweight; target cut to $215 from $242 (JPM)

Stocks trading ex-dividend: 

• Mon 4 Nov: Brickworks (BKW) – 1.59%

• Tue 5 Nov: EZZ Life Science (EZZ) – 0.54%, Qualitas Real Estate (QRI) – 0.71%

• Wed 6 Nov: ResMed (RMD) – 0.15%

• Thu 7 Nov: None

• Fri 8 Nov: Acorn Capital Investment (ACQ) – 3.13%

Other ASX corporate actions today: 

• Dividends paid: K&S Corp (KSC), Cosol (COS)

• Listing: None

• Earnings: Westpac Bank (WBC)

• AGMs: GWA Group (GWA)

Economic calendar (AEDT):

• No major economic announcements