Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq ease from record highs

Major US benchmarks finished relatively mixed on Friday as gains from Energy and Utilities offset weakness across Tech, the Middle East crisis continues to intensify, ChatGPT owner OpenAI set to report 1,700% revenue growth this year, US core PCE inflation comes in slightly below analyst expectations and why gold miners could be set for a weak session on Monday.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 lower, finished off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished mixed but closed not far from worst levels

• S&P 500 and Nasdaq both logged a third straight week of gains

• US Weekly recap – Nasdaq +0.95%, S&P 500 +0.62%, Dow +0.59%, Russell -0.14%

• Today’s big story – China lowered interest rates and plans to issue 2tn yuan (US$284bn) in special sovereign bonds as part of fresh fiscal stimulus

• Bullish focus points for the week – Aggressive China stimulus (drove a ~13% jump in Hang Seng and Shanghai indices), AI growth momentum with Nvidia back above US$3tn market cap, low Q3 earnings bar, US initial jobless claims fell to lowest since May, US core PCE inflation cooler-than-expected in August and global easing cycle

• Bearish focus points for the week – US manufacturing PMI unexpectedly fell further into contraction in September, US consumer confidence suffered biggest decline in more than three years and hawkish policy shift in Japan

• S&P 500 heading for best first nine months of a year since 1997 as traders blow off US election risks (BBG)

• Goldman and BlackRock are warning investors of mounting risks around European equities over coming months (BBG)

• Actively managed ETF assets worldwide hit a record US$1tn at the end of August (RT)

• China markets log best week since 2008 on latest economic stimulus measures (FT)

STOCKS

• OpenAI expects about US$5bn in losses on US$3.7bn in revenue this year, revenue still up 1,700% year-on-year (CNBC)

• Freeport's plan to boost copper output while peers focus on M&A will position it well for clean energy transition says analysts (Reuters)

• Intel and US to finalise US$8.5bn in chips funding by year-end (FT)

• Intel rejects Arm's approach for product division (Bloomberg)

CENTRAL BANKS

• Fed's Cook says she fully backed 50 bp rate cut as strength of US labor market can be sustained (BBG)

• ECB rate cut bets pickup after Spanish and French inflation fall below 2% (BBG)

POLITICS & GEOPOLITICS

• Israel's Netanyahu says killing of Hezbollah leader will 'not be enough' (CNBC)

• Lebanon ceasefire hopes dwindle as Israel and Hezbollah drift towards all-out war (BBG)

• Iran says killing of Hezbollah leader will 'not go unanswered' as Supreme Leader moved to secure location (NBC)

• Japan's new Prime Minister Shigeru Ishiba selected to replace Kishida (RT)

ECONOMY

• US August core PCE up 0.1% month-on-month, below 0.2% consensus (RT)

• US personal spending up 0.2% month-on-month, below 0.3% consensus and decelerated from prior month’s pace (RT)

• Trump's tariffs would cause US economy to shrink by 10%, say analysts (SCMP)

• China's industrial profits fall for first time since March, adding to economic woes (RT)

• Tokyo core inflation eases as expected amid restart of energy subsidies (RT)

• US August durable goods unchanged month-on-month vs. consensus of a 2.7% decline, new orders now up six of the last seven months (RT)

ASX TODAY

• REA Group makes fourth proposal for Rightmove, raises total offer value by 1.6% to 781 pence per share (REA)

WHAT TO WATCH TODAY

• Resource gains: Friday was another massive session for the resource sector after China's additional stimulus news. A few notable runners include Pilbara Minerals (+5.6%) South32 (+4.8%) and Fortescue (+3.6%). It'll be interesting to see if the resource sector can continue pushing higher on the back of this news. And if lithium names can continue to benefit from short covering.

• Gold eases: Bullion prices fell around 0.5% on last Friday, driving the Gold Miners ETF down 3.0%. NYSE-listed Newmont shares finished the session down 2.9%.

BROKER MOVES

• Brickworks downgraded to Hold from Buy; target up to $31 from $29.50 (BP)

• Brickworks upgraded to Accumulate from Hold; target up to $31 from $27 (ORD)

• Netwealth Group initiated Hold with $23.90 target (BP)

• Webjet Group initiated Overweight with $1.10 target (JARD)

• Webjet downgraded to Overweight from Buy; target cut to $7.70 from $9.45 (JARD)

Stocks trading ex-dividend – Ex-dividend values are now a percentage based on the stock's last close.

• Mon 30 Sep: Metrics Income Opportunities Trust (MOT) – 0.59%, Metrics Master Income Trust (MXT) – 0.65%, Steamships Trading Company (SST) – 0.93%.

• Tue 1 Oct: Fonterra Shareholders' Fund (FSF) – 6.70%, Genusplus Group (GNP) – 1.03%, Pengana Global Private Credit Trust (PCX) – 0.57%, Sims (SGM) – 0.78%, Sigma Healthcare (SIG) – 0.34%, Wam Strategic Value (WAR) – 2.55%.

• Wed 2 Oct: None

• Thu 3 Oct: ARB Corporation (ARB) – 0.74%, Myer (MYR) – 0.62%, New Hope Corporation (NHC) – 4.34%

• Fri: 4 Oct: None

Other ASX corporate actions today: 

• Dividends paid: Apiam Animal Health (AHX), Aussie Broadband (ABB), Beach Energy (BPT), Bendigo and Adelaide Bank (BEN), Data3 (DTL), G8 Education (GEM), Grange Resources (GRR), Mercury NZ (MCY), Woolworths Group (WOW)

• Earnings: Strike Energy (STX)

• Listing: None

• AGMs: None

Economic calendar (AEST):

• 11:30 am: Australia Housing Credit (Aug)

• 11:30 am: China NBS Manufacturing PMI (Sep)

• 11:45 am: China Caixin Manufacturing and Services PMI (Sep)

• 7:00 pm: Italy Inflation Rate (Sep)

• 10:00 pm: Germany  Inflation Rate (Sep)

• 3:55 am: Fed Chair Powell Speech