Morning Wrap: ASX 200 to rise, S&P 500 and Dow close at record highs

Major US benchmarks continued to climb to record levels in a shortened post-Thanks giving session, the US dollar tumbles as the Trump trade begins to unravel, Eurozone inflation remains choppy but a few countries reporting inflation below 2% and a massive sweep of broker upgrades/downgrades.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher, finished off best levels in a shortened session (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished higher, ending off best levels in a shortened session after the US Thanksgiving Day holiday

• S&P 500 set another fresh all-time high and saw its best monthly performance in the past year

• Bond yields lower, with US 10-year down 22 bps in the last five sessions to a five-week low

• US Monthly Recap – Russell 2000 (+10.84%), Dow (+7.54%), Nasdaq (+6.21%), S&P 500 (+5.73%)

• Bullish focus points for the week – Trump call with Mexican president notes limited appetite for a trade war, market pricing still expects a December rate cut, Q4 S&P earnings forecast to rise 12% year-on-year and Israel-Hezbollah ceasefire hopes

• Bearish focus points for the week – Fears of economic impact from Trump’s higher tariffs and possible trade wars, policymakers reiterate need for gradual rate cuts, US jobless claims near highest level in three weeks, disappointing earnings from names like Dell, Crowdstrike and HP

• Global banks face lowest macro trading revenue since 2020 (BBG)

• US dollar faces largest weekly drop in three months as Trump trade unravels (BBG)

• Yen rallies as BoJ rate hike expectations surge (BBG)

• Chinese stocks rally on stimulus hopes ahead of key meeting (BBG)

CENTRAL BANKS

• RBA reform adds new twist to policy outlook (AFR)

• ANZ delays RBA cut expectations amid hawkish inflation outlook (BBG)

• BOJ retreat from low rates heightens Japan's debt problems (RT)

POLITICS & GEOPOLITICS

• Trump and Mexico's Sheinbaum agree countries should have a "good relationship" in phone call (WP)

• Assad regime, Russian allies launch airstrikes against Syrian rebels while fighters continue to push southward (FT)

• Canada's Trudeau has a "very productive meeting" with Trump at Mar-a-Lago (BBC)

• Beijing warns of "necessary actions" if US proceeds with tightening chip export controls (RT)

ECONOMY

• US online sales rise 4% during Thanksgiving as retailers boost discounts (RT)

• US Black Friday sales up 3.4% y/y, but brick-and-mortar sales up just 0.7% y/y (RT)

• Eurozone inflation remained above ECB target at 2.3% in November, but rate cuts still expected (BBG)

• French inflation at 1.3% in November, below ECB target and supporting case for further rate cuts (BBG)

• China exports soar as importers rush to beat Trump's tariff threat (BBG)

• India's falling wages squeezes urban middle class and economy (BBG)

• Canada’s GDP rises just 1.0% in Q3, chances of a big rate cut jump (RT)

ASX TODAY

• Resolute Mining makes second settlement payment of $50m to the government of Mali from existing cash reserves, with remaining payment of $30m to be paid by end of 2024 (RSG)

• Retail Food Group is understood to have hired Gresham on fears of an opportunistic buyout after largest shareholder – United Petroleum – lifted its stake in the business to 19.9% in November (The Aus)

WHAT TO WATCH TODAY

There's not a whole lot going on after a quiet post-holiday US session and limited newsflow.

MAJOR BROKER MOVES

• AMP initiated Neutral with $1.54 target (GS)

• GQG Partners downgraded to Neutral from Buy; target cut to $2.30 from $3.30 (UBS)

• IGO upgraded to Neutral from Sell; target remains $5.50 (UBS)

• Imdex downgraded to Neutral from Buy; target up to $2.60 from $2.35 (UBS)

• Liontown Resources retained Sell; target cut to $0.50 from $0.80 (UBS)

• Patriot Battery Metals retained Buy; target cut to $0.60 from $0.85 (UBS)

• Pilbara Minerals retained Neutral; target up to $2.40 from $2.35 (UBS)

• Select Harvests upgraded to Buy from Neutral; target up to $4.40 from $4.00 (UBS)

• Star Entertainment Group downgraded to Underperform from Neutral; target cut to $0.20 from $0.24 (MQG)

• Steadfast upgraded to Overweight; target up to $6.98 from $6.64 (MS)

• Westpac upgraded to Buy from Neutral; target up to $37 from $33 (UBS)

Stocks trading ex-dividend: 

• Mon 2 Dec: None

• Tue 3 Dec: Dalrymple Bay Infrastructure (DBI) – 1.64%, Incitec Pivot (IPL) – 1.96%

• Wed 4 Dec: None

• Thu 5 Dec: 1.20%, Fisher & Paykel Healthcare (FPH) – 0.49%, Hancock & Gore (HNG) – 3.47%

• Fri 6 Dec: Indiana Resources (IDA) – 45.45%

Other ASX corporate actions today: 

• Dividends paid: Dicker Data (DDR), N1 Holdings (N1H) 

• Listing: None

• Earnings: Collins Food (CKF), Metcash (MTS)

• AGMs: None

Economic calendar (AEDT):

• 10:30 am: Australia Building Permits (Oct)

• 10:30 am: Australia Retail Sales (Oct)

• 11:45 pm: China Caixin Manufacturing PMI (Nov)

• 1:00 am: US ISM Manufacturing PMI (Nov)