Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq close at all-time highs, Gold stocks to rally

ASX 200 futures are trading 73 points higher, up 0.94% as of 8:30 am AEST.

The S&P 500 and Nasdaq scored another all-time high as softer-than-expected economic data stokes hope for a rate cut. Fortunately, the local sharemarket is set for a strong open thanks to easing bond yields and firmer commodity prices overnight.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 trends higher to close at best levels (Source: TradingView)

OVERNIGHT MARKETS

• S&P 500 and Nasdaq both posted fresh record highs, with notable gains from Tesla (+6.5%), Nvidia (+4.5%) and Broadcom (+4.3%)

• Relatively quiet trading session with an early close, ahead of tomorrow’s Fourth of July holiday

• Equal-weight S&P 500 underperformed the official benchmark by 47 bps – laggards included banks, staples and healthcare stocks 

• Bond yields extended to a two-day reprieve, the US-10 year down to 4.35% from almost 4.50% on Monday

• Traders ramp up Trump-fueled bet on higher long term US bond yields on potential return to White House (Bloomberg)

• Yen hits fresh 38-year trough against US dollar (Reuters)

• Fed minutes note slowing economy, stress need for greater confidence that inflation is moving sustainably towards the 2% target (Reuters)

• Goldman Sachs says hedge funds dumped European stocks in June on political turmoil, reversing May's buying trend (Bloomberg)

• WTI hits two month high after biggest stockpile draw since Jul-23 (Bloomberg)

STOCKS

• JPMorgan strategist Kolanovic to leave bank (Bloomberg)

• Jeff Bezos to sell nearly US$5bn in Amazon shares, bringing total 2024 sales to more than US$13bn (FT)

GEOPOLITICS

• US to announce additional US$2.3bn arms package for Ukraine (Reuters)

• US adds six more companies to trade restrictions list with some linked to training of China's military (CNBC)

• US allies allege China for developing attack drones for Russia (Bloomberg)

• EU countries wavering over whether to back additional tariffs on Chinese-built EVs (Reuters)

• EU working on a proposal to impose import duties on cheap goods from Chinese online retailers (Bloomberg)

POLITICS

• President Biden reportedly considering whether to continue reelection bid (NY Times)

• White House denies reports Biden is considering dropping out (RollingStone)

• Biden blames jet lag on debate performance (Bloomberg)

• UK election enters final days as polls point to heavy defeat for PM Sunak (London Times)

• France's Le Pen seeks majority, accuses Macron of 'coup plot' over top jobs for allies (Bloomberg)

ECONOMY

• US ISM services printed at 48.8 in June, below consensus 52.5 and prior reading of 53.8 – ISM services is now back in contraction territory, with new orders logging a steep fall, prices paid index ticked lower and employment index contracted for a sixth time in seven months (Reuters)

• China's services activity growth hits 8-month low, Caixin PMI shows (Reuters)

• Eurozone PMIs show June business growth slowed with strong services unable to offset weak manufacturing activity (Reuters)

• UK services PMI cools by less than expected, still ebbed to a seven-month low (Reuters)

• Japan service activity contracts for first time in two years (Reuters)

• Australian retail sales jump 0.6% month-on-month in May, above 0.2% consensus and heightens risk of RBA rate hike (Bloomberg)

ASX TODAY

• ASX 200 set for a strong open following a strong lead from Wall Street, easing bond yields and an uptick in commodity prices

• Boss Energy set to ship first U308 from Honeymoon (BOE)

• MMA Offshore’s $1bn takeover bid receives FIRB clearance (MRM)

• New Hope launches $300m unsecured convertible notes due 2029, conversion price is 30-35% above the reference share price of $5.1 per share (NHC)

• Regal Partners estimates 1H24 performance fee revenue of $55-56m, funds under management at 30-Jun at $12.2bn, up from $12.09bn in the previous quarter (RPL)

 WHAT TO WATCH TODAY

• Gold: Gold prices up 1.03% overnight to US$2,356 and the Gold Miners ETF rallied 3.7% to a near one month high. NYSE-listed Newmont finished 4.1% higher. Local gold names should be in for a pretty strong session.

• Copper: Copper prices also ticked noticeably higher, up 2.6% to US$4.52/lb and the Copper Miners ETF (+3.4%) rallied to a one month high overnight.

• Lithium: NYSE-listed Arcadium Lithium up 7.4% and the Rare Earths/Strategic Metals ETF finished 3.3% higher. Interestingly, Chinese lithium carbonate futures were relatively unchanged on Wednesday, down 0.3% to 94,550 yuan a tonne.

BROKER MOVES

• CSL upgraded to Buy from Neutral; target increased to $335 from $305 (Citi)

• Ebos Group upgraded to Neutral from Sell but target decreased to $31.50 from $33 (Citi)

• Guzman y Gomez initiated Add with $30.80 target price (Morgans)

Companies trading ex-dividend: 

• Thu 4 July: Clime Capital (CAM) – $0.014

• Fri 5 July: None

• Mon 8 July: Collins Foods (CKF) – $0.155

• Tue 9 July: None

• Wed 10 July: None

Other ASX corporate actions today: 

• Dividends paid: Incitec Pivot (IPL) – $0.043, AFT Pharmaceuticals (AFP) – $0.009  

• Listing: None

• Earnings: None

• AGMs: None

Economic calendar (AEST):

• 11:30 am: Australia Balance of Trade (May)