Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq at record highs, Copper and palladium stocks to rally

ASX 200 futures are up 38pts (+0.38%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks broadly higher, though the Dow finished flat amid a tech and growth-led session

• Market shrugged off recent AI bubble concerns, with notable gains from AMD (+11.3%), Broadcom (+2.7%) and Nvidia (+2.2%)

• Gold prices rallied through US$4,000 with ease, while silver prices are on the verge of cracking US$50, copper mines also in focus after another major supply shock

Let's dive in.

S&P 500 SESSION CHART

S&P 500 gapped up, trended higher to close at best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks mostly higher, finished near best levels

• S&P 500 and Nasdaq both notched fresh all-time highs

• Markets shrugged off AI bubble concerns, with notable gains from AMD (+11.3%), Broadcom (+2.7%) and Nvidia (+2.2%)

• Strength behind tech and growth also meant that defensives underperformed, with the Dow flat and sectors like Financials, Staples and Real Estate lower

• Overall, a relatively quiet session, with markets continuing to trend higher off the back of dampened volatility, rising M&A activity, positive Q3 earnings sentiment and still-solid Fed easing expectations

• Anxious investors drive gold above US$4,000/oz, marking best year since the 70s (FT)

• Investors flocking to gold and bitcoin, driving what's become known as the debasement trade (WSJ)

• M&A activity surges, driven by mega deals, optimism from anticipated rate cuts (CNBC)

• IMF, BoE both warn global markets at risk of sudden correction in AI trade (FT)

• US government shutdown creates data void, prompting bond traders to hedge against potential Fed policy pivots (BBG)

• Yen falls to lowest against dollar since February as selling continues following Takaichi's victory (BBG)

STOCKS

• Nvidia and OpenAI at center of 'circularity' dynamic that is fueling concerns about an AI bubble (Bloomberg)

• xAI's funding round approaching $20bn with Nvidia taking a stake in the startup (BBG)

• EY survey shows large companies incurred $4.4bn in losses relating to AI but remain optimistic about future returns and outlook (RT)

• Tesla unveils cheaper car models starting at approximately $37-40,000 competing with gas vehicles (NYT)

• Intel planning to release technical details about high-end Panther Lake chip for laptops, chip release planned for early 2026 (RT)

• Exxon Mobil weighs re-entry into Iraq with agreements to explore Majnoon field (BBG)

• Anglo American defends its $50B merger with Teck Resources after production cuts at key mines (FT)

TARIFFS

• US soybean farmers in panic mode as Chinese buyers remain on the sidelines (WSJ)

• China procured ~$40bn of advanced chipmaking equipment last year, prompting calls for tougher export restrictions (RT)

CENTRAL BANKS

• Fed Governor Miran says bond market calm backs case for swift rate cuts (RT)

• Minneapolis Fed's Kashkari warns rapid rate cuts risks burst of high inflation (BBG)

• BOJ Governor Ueda faces tougher political environment under rate hike critic/pro-growth Takaichi (BBG)

• ECB's Lagarde urges France to meet EU budget deadlines amid crisis (RT)

• ECB's Escriva declares rates are at an "appropriate level," signaling no need for further guidance (RT)

• RBNZ cuts rates by 50 bps, open to further reductions (BBG)

US GOVERNMENT SHUTDOWN

• Trump's off-script remarks create challenges for GOP leaders, complicating their united stance against Democrats (POL)

• Speaker Johnson rules out standalone legislation to cover military paychecks, reiterates Democrats should back GOP's seven-week stopgap (AX)

• Senate fails to pass GOP's continuing resolution for the sixth time, same three Democrats crossing the aisle to support (POL)

ECONOMY

• Japan manufacturer sentiment falls for first time in four months amid plunge in auto sector confidence (RT)

• German industrial production declines in August, driven by weakness in auto manufacturing, raising recession concerns (BBG)

ASX TODAY

• Bhagwan Marine signs two-year extension to existing contract with Jadestone Energy and Vermilion Energy, valued at $25m (BWN)

• Block’s Square businesses rolls out integrated payments and wallet solution for b businesses, features first fully integrated Bitcoin payments solution with zero processing fees (XYZ)

• Lynas signs MoU with Noveon Magnetics to establish domestic US supply chain for rare earth permanent magnets, scope of agreements includes provision of both light and heavy rare earths, developing metal, alloy and magnet production (LYC)

• South32 seeking to sell Cannington silver mine, sources say it could achieve a sale price of A$1 billion (The Aus)

WHAT TO WATCH TODAY

• Gold and silver: Another massive session for both safe-havens, with gold up 1.4% to US$4,040 and silver up 2.1% to US$48.80. Our overnight gold and silver miner ETFs up 2.8% and 4.0% respectively. Even though gold miners are relatively overextended and bit volatile in recent days, the push above US$4,000 could drive some extra upside.

• Copper: Global X Copper Miner ETF (+3.9%) up sharply overnight after Teck cut the output guidance for its flagship Quebrada Blanca copper mine in Chile. For 2025, the mine is set to produce a projected 170-190,000 tonnes, down from prior guidance of 210-230,000 tonnes. Forecasts for 2026-2028 have also been lowered. Another massive hit to the copper sector, with recent mines like Escondida, Grasberg and Kamoa dropping probably almost 1 million tonnes of production.

• Palladium: Palladium prices are surging, up 7.7% overnight and up almost 15% in the last three sessions to US$1,449.

BROKER MOVES

• ANZ re-initiated Buy with $37.54 target (GS)

• CBA re-initiated Sell with $130.18 target (GS)

• Deep Yellow initiated Neutral with $2.00 target (JPM)

• NAB re-initiated Sell with $38.00 target (GS)

• Westpac re-initiated Neutral with $37.63 target (GS)

Stocks trading ex-dividend: 

• Thu 9 Oct: Clime Investment Management (CIW) – $0.005, Duxton Water (D2O) – $0.037

• Fri 10 Oct: None

Other ASX corporate actions today: 

• Dividends paid: Briscoe Group (BGP), Enero Group (EGG), Imdex (IMD), Medibank (MPL), Perseus Mining (PRU)

• Earnings: None

• IPOs: None

• AGMs: REA Group (REA)

Economic calendar (AEST):

No major economic announcements.