Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq climb on SK hynix debut, Oil prices jump 4%

In a nutshell:

• Major US benchmarks mostly higher, with the S&P 500 and Nasdaq booking a second straight weekly gain amid relatively broad gains for Tech, Defensives and Materials

• SK Hynix stormed its Nasdaq debut, opening around 14% above its offer price after raising US$26.5bn, the largest ever US listing by a foreign company

• Iran declared the Strait of Hormuz closed over the weekend after a third US strike wave, reviving oil supply fears just as crude had settled back near its lowest since the war began

• Brent up ~4.5% in early trade on Monday to US$78.69 a barrel, gold trading sharply lower, down 0.8% to US$4,085/oz

Let's dive in.

• Major US benchmarks closed mostly higher and near best levels

• Materials (+1.1%) was the best performing sector as commodity prices bounced, with copper (+0.6%) closing at a three-week high

• Healthcare (-0.8%) was the only sector to finish lower, now down 2.2% since its 7-Jul record high but still up ~13% since mid-May

• US weekly recap: Nasdaq (+1.74%), S&P 500 (+1.23%), Equal-weight S&P 500 (-0.28%), Dow (-0.50%), Russell 2000 (-0.61%)

• SK Hynix's record US debut is expected to trigger a new wave of leveraged products tied to its shares (BBG)

• Primary dealers holding an aggregate net-short position in corporate bonds for the first time in data going back to 1998 (BBG)

• US launched a third wave of strikes on Iran on Saturday, hitting about 140 military sites and lifting the week's total above 300 targets, after Iran struck a container ship in the Strait of Hormuz (BBG)

• IGRC declared the Strait of Hormuz closed until further notice, while US Central Command insisted Iran does not control the waterway and that traffic is still flowing (BBG)

• Iran retaliated early Sunday with drone and missile strikes on at least five US allies including Kuwait, Jordan, Qatar, Oman and the UAE, with only minor damage and no major casualties reported (BBG)

• UN Ambassador Waltz says Iran not living up to the ceasefire, "all options are on the table" for Trump (ABC)

• Oman has drafted a proposal to manage traffic through the Strait of Hormuz as Pakistan and Qatar work to revive US Iran talks, with mediators warning against a slide back to full scale war (CNN)

• SK Hynix stormed its Nasdaq debut, opening ~14% above its $149 offer price, rallied as high as $177 but finished the session at $168  (YF)

• Meta jumped ~6% to cap its best week since early 2024, up ~15%, on optimism over its new Meta Compute cloud unit and a Bank of America note flagging improving AI cost efficiency (CNBC)

• Nvidia rallied ~4% to help lead the S&P 500 higher, extending a semiconductor rebound as investors kept adding to the AI infrastructure trade into SK Hynix's debut (CNBC)

• Micron plans to raise its US investment to more than US$250bn through 2035, up from a prior US$200bn plan (YF)

• Delta Air Lines fell 1.8% even as Q2 adjusted EPS of US$1.56 beat ests by ~ 5%, with investors focused on rising jet fuel costs (BBG)

• Vodafone surged 12.5% after French billionaire Xavier Niel took a 16% stake worth around US$5.9bn to become the UK telecom group's largest shareholder (BBG)

• BMW Q2 deliveries fall as China sales drop nearly third (BBG) 

• Apple suing OpenAI, accusing it of theft of trade secrets "at every level" (CNBC)

• Lutnick presses on SY Hynix and Samsung to boost US memory output (BBG)

• Trump holds off on aircraft tariffs, orders USTR to begin negotiations with countries about adjusting imports (BBG)

• Warsh appoints ex-BoE chief Mervyn King and Marc Andreessen to reform the Fed, leading five new task forces, signalling possible changes ahead (FT)

• China drops long-running urban jobs target for the next five years, signaling rising employment uncertainty (BBG)

• Japan wholesale inflation accelerates to more than 7% as energy costs surge (BBG)

• US fuel prices remain high despite retreating crude, with gap between refined products and raw crude near record levels (BBG)

• Global EV demand accelerates again as Europe demand offsets China and US weakness (RT)

• Auction clearance rates rebound to seven-week high of 54.8% across combined capital cities after three weeks of sub-50%, according to Cotality (CT)

• BHP Group exploring sale of its Chilean desalination plant and transmission assets as it sharpens focus on core copper. Early in the process with no final decisions. Combined valuation estimated at $1.5-2.0bn, transmission ~$1-1.3bn and the plant ~$500-700m (BBG)

• Coles Group expected to announce a deal to acquire Greencross as soon as this week, with the price tipped at more than $4bn (~$2.8bn) including debt (The Aus)

• Mayne Pharma Group should consider splitting itself up, holders tell the AFR, floating an auction of its Adelaide and North Carolina manufacturing facilities. Offshore hedge funds hold ~20%, suggesting few would oppose a break-up (AFR)

• Regis Resources will not submit a counter proposal to match the Genesis proposal for Vault Minerals, concluding the required terms don't meet its value and return thresholds. Anticipates Vault will terminate the SID, triggering a ~$50.7m break fee payable to Regis (RRL)

• Another escalation: Another classic US-Iran escalation after market close on Friday. Brent trading ~4.5% higher, while metals like silver, palladium, gold and more all down around 0.9-2%. While ASX 200 futures point to a positive start, the escalation is placing upward pressure on oil and yields, which tends to place downward pressure on equities. It'll be interesting to see if energy stocks (coal, O&G and refiners) catch a bid today, and also defensives like Staples, Healthcare and insurers. Previous escalations/higher oil prices have smashed the Materials sector, which experienced a 2.3% bounce last Friday (snapping a four-day losing streak and ~13% drawdown from 17-Jun record highs).

• AGL Energy downgraded to Underperform from Neutral; target cut to $7.75 from $8.83 (Macquarie)

• Arb Corp upgraded to Buy from Accumulate; target up to $22.35 from $22.04 (Morgans)

• Catalyst Metals initiated Overweight with $8.30 target (JPMorgan)

• Dicker Data downgraded to Neutral from Buy; target up to $12 from $11.20 (UBS)

• Magellan Financial upgraded to Accumulate from Hold; target lowered to $11.26 from $11.29 (Morgans)

• Woolworths downgraded to Underperform from Neutral; target increased to $37 from $34 (Macquarie)

Stocks trading ex-dividend: 

• Mon 13 Jul: Beacon Minerals (BCN) – $0.255, Collins Foods (CKF) – $0.15, QUBE Holdings (QUB) – $0.346, Sandon Capital (SNC) – $0.005, Turners Automotive (TRA) – $0.074

• Tue 14 Jul: Metcash (MTS) – $0.095, Whitefield Income (WHI) – $0.006

• Wed 15 Jul: None

• Thu 16 Jul: None

Other ASX corporate actions today:       

• Dividends paid: None

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

No major economic announcements.