Morning Wrap: ASX 200 to rise, S&P 500 and Dow at all-time highs + Web Travel earnings

ASX 200 futures are trading 38 points higher, up 0.45%, as of 8:30 am AEDT.

Major US benchmarks continued to tick higher overnight – with the S&P 500 and Dow Jones both logging all-time highs, theme of cyclical rotation into sectors like Utilities and Discretionary continued, Trump's tariff threat placed upward pressure on the US Dollar and bond yields and trading updates/earnings from QBE Insurance and Web Travel Group.

Let's dive in.

S&P 500 SESSION CHART

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

OVERNIGHT MARKETS

• Major US benchmarks finished higher, finished near best levels

• Equal-weight S&P 500 underperformed the official benchmark by 56 bps as gains from Big Tech helped cushion the market at the index level

• Overnight upside continues to highlight a cyclical rotation into sectors like Utilities and Discretionary

• Recent strength in retail stocks has received some attention, with S&P Retail ETF up ~12% since November, underpinned by decent earnings, Black Friday optimism, macro surprise momentum and lower oil prices

• Equity volatility heading for its lowest annual average since 2019 despite broad global risks (BBG)

• French yield gap over German bonds surges to highest since 2012 euro crisis, could spike further if government collapses (BBG)

STOCKS

• Automaker shares fall after Trump threatens 25% tariff on Mexico and Canada, 10% on China (CNBC)

• Biden administration proposing rule that would require the US government to cover weight-loss drugs (BBG)

• Apple runs into regulatory hurdles in China with AI rollout for iPhones (FT)

• Kohl’s shares dip 17% after the retailer cut its sales outlook amid an uncertain holiday backdrop (CNBC)

• Best Buy shares fall 4.8% after slashing its full-year sales forecast, now expects comparable same-store sales to fall 2.5-3.5%

CENTRAL BANKS

• Fed November meeting minutes show broad support for gradually lowering rates, while some saw pause or faster cuts as an option (BBG)

• Chicago Fed's Goolsbee sees rate cuts continuing, but pace to be determined by outlook and conditions (BBG)

• ECB VP de Guindos says more rate cuts are on the way if policymakers' forecasts for inflation hold (BBG)

• RBNZ expected to cut cash rate by another 50 bp this week (BBG)

POLITICS & GEOPOLITICS

• Trump says first executive orders will include an additional 10% tariffs on China goods, above any additional tariffs, as well as 25% tariffs on Mexico and Canada (RT)

• Mexican president calls for cooperation with US on trade, warns of risks tariffs pose to companies (BBG)

• Biden, France's Macron to announce Israel-Hezbollah ceasefire (RT)

• Russian forces advancing in Ukraine at the fastest rate since the early days of the 2022 invasion (RT)

ECONOMY

• Japan's service-sector inflation steady near 3%, keeps alive BOJ rate hike (RT)

• South Korean consumers' economic outlook deteriorates at fastest pace since mid-2022 (BBG)

• India Q2 GDP growth forecast to have slowed to 1.5 year low (RT)

ASX TODAY

• City Chic Collective reaffirms FY revenue guidance of $142-160m vs. $144m consensus, expects higher average selling prices and gross margin trends from 2H24 and early FY25 (CCX)

• QBE Insurance issues trading update, GWP up 2% year-on-year for nine months to 30 September, driven by Group-wide renewable premium rate increase of 5.9%, reiterates FY24 outlook (QBE)

• Ramsay Health Care CEO says the company is not going to sell offshore assets despite investor pressure, won't rule out property sales (AFR)

• Web Travel Group intends to conduct on-market share buyback of up to $150m, commencing December 2024 (WEB)

• Web Travel Group reports 1H25 underlying EBITDA of $70m vs. $75.7m consensus with no interim dividend, full-year EBITDA guidance of $117-122m vs. $114m consensus, TTV up 23% for first 7 weeks of trading for 2H25 (WEB)

WHAT TO WATCH TODAY

• Pretty quiet in terms of overnight lead and current announcements – cyclical rotation to continue to benefit sectors like Utilities, Real Estate, Staples etc. while resources underperform (iron ore, copper and nickel-related stocks all pulled back overnight)

BROKER MOVES

• GQG Partners initiated Buy with $3.30 target (JARD)

• Pinnacle Investment initiated Neutral with $22.60 target (JARD)

• Qantas downgraded to Neutral from Buy; however target up to $9 from $8.60 (UBS)

• Qualitas initiated Buy with $3.75 target (JARD)

• The Lottery Corp upgraded to Buy from Hold; target up to $5.80 from $5.09 (JEF)

• Webjet Group upgraded to Buy; target up to $1.10 from $0.95 (JEF)

• Webjet Group initiated Buy with $1.32 target (OM)

Stocks trading ex-dividend: 

• Wed 27 Nov: ALS (ALQ) – 1.18%, Graincorp (GNC) – 3.00%, Whitefield Industrials (WHF) – 1.83%.

• Thu 28 Nov: 360 Capital Mortgage REIT (TCF) – 0.86%, Gryphon Capital Income Trust (GCI) – 0.66%, KKR Credit Income Fund (KKC) – 0.73%, , Perpetual Credit Income Trust (PCI) – 0.59%, Red Hill Minerals (RHI) – 6.82%, Technology One (TNE) – 0.57%

• Fri 29 Nov: Aristocrat Leisure (ALL) – 0.63%, , Metrics Income Opportunities Trust (MOT) – 0.52%, Metrics Master Income Trust (MXT) – 0.61%, Metrics Real Estate Multi-Strategy Fund (MRE) – 0.41%, Pengana International Equities (PIA) – 1.15%.

Other ASX corporate actions today: 

• Dividends paid: Brickworks (BKW), Global Data Centre Group (GDC)

• Listing: None

• Earnings: Web Travel Group (WEB)

• AGMs: Harvey Norman (HVN), Liontown Resources (LTR), Lynas Rare Earths (LYC), NRW Holdings (NWH)

Economic calendar (AEDT):

• 10:30 am: Australia Monthly CPI Indicator (Oct)

• 11:30 pm: US Core PCE Index (Oct)

• 11:30 pm: US Durable Goods Orders (Oct)

• 11:30 pm: US Q3 GDP