Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq hit new records on tech strength

ASX 200 futures trading up 6 points, or (+0.07%), to 8,203, as of 8:30AM

Hi there, Kerry here! This will be my last Morning Wrap for the year as my holidays are kicking off early (4-Dec to 4-Jan). Thank you for your continued support and I hope the Wrap has helped generate some cool insights and perspectives. Wishing you a safe and joyful holiday season. See you in the new year!

The S&P 500 and Nasdaq scored another record close on Magnificent 7 strength, Adobe says eCommerce sales surged on Black Friday vs. sluggish in-store traffic, US and China manufacturing PMIs top analyst expectations, falling gold prices pull gold miners sharply lower overnight and Goldman Sachs takes two top ASX growth stocks off its conviction list.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 ticks higher in a relatively choppy session (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished mostly higher, led by tech stocks

• Magnificent 7 stocks all higher, led by Tesla (+3.4%), Meta (+3.2%) and Microsoft (+1.7%) 

• Equal-weight S&P 500 lower, underperformed the official benchmark by 50 bps, reflecting weakness across ex-tech sectors

• S&P 500 rallied 5.7% in November, the biggest monthly gain of 2024

• S&P 500 is up 26.5% year-to-November, on track for consecutive annual gains of more than 20% for the first time since 1995-1998

• Major tailwind for stocks include unwinding of crowded downside hedges, VIX retreat, systematic fund buying, deregulation dynamics and favourable year-end seasonality 

• JP Morgan derivatives analysts say popular trades wagering S&P will hit 6200-6300 by year's end vs. 6,047 last close (BBG)

• French bonds under pressure as National Rally threatens to topple Barnier's government over budget (BBG)

• China's 10-year yield plummets below 2% amid easing expectations and economic concerns (BBG)

STOCKS

• Intel CEO retires, the stock has been the fourth-worst performing S&P 500 constituent year-to-date (FT)

• Stellantis CEO Tavares abruptly quits as US Jeep, Ram sales falter (RT)

• Disney's 'Moana 2' takes in US$386m at global box office (V)

• Japanese companies boost capital expenditure, signaling corporate confidence amid rate hike speculation (BBG)

CENTRAL BANKS

• Fed Bostic says conditions on both price stability and employment fronts are healthy but a continued string of positive data is not assured (RT)

• ECB signals shift from crisis-era strategy as inflation nears target (FT)

• ECB's Kazaks advocates for further rate cuts as inflation eases (BBG)

POLITICS & GEOPOLITICS

• US imposes new export controls on China's semiconductor industry amid national security concerns (RT)

• Canada enhances border security amid Trump tariff threats (BBG)

• France stands firm against LePen's budget ultimatum (BBG)

ECONOMY

• Adobe Black Friday insights – Americans spent a record US$10.8bn online on Friday, up 10.2% year-on-year, strength in online spending vs. sluggish in-store traffic 

• US ISM Manufacturing Index up to 48.4 in November, ahead of consensus 47.5 and October’s 46.5, best print since April and highest month-on-month improvement since August 2023 (RT)

• China's manufacturing activity surges to 51.5 in November, above 50.5 consensus and October’s 50.3 as new orders drive optimism amid economic challenges (RT)

• UK business confidence dips to five-month low, resilience remains (RT)

• UK house prices surge in November as buyers return amid rate cuts and wage gains (BBG)

• Australian retail sales surges 0.6% month-on-month in October, above 0.3% consensus and 0.1% in the previous month, up a third consecutive month as consumer confidence grows (BBG)

ASX TODAY

• Newsflow is pretty slow these mornings – as AGM season comes to an end, expect that trend to continue into Christmas

• Alcoa voluntarily repays all accrued and unpaid amounts of outstanding debt assumed through Alumina acquisition (AAI)

• GTN holder Viburnum Funds agrees to sell 19.99% stake to TTG Group at A$0.465 per share (GTN)

WHAT TO WATCH TODAY

• Gold – Gold prices pulled back 0.5% overnight, the past couple of weeks has been rather volatile as the yellow metal tries to find a floor amid soaring US dollar and bond yield dynamics. The overnight move pulled the Gold Miners ETF 2.2% lower, which should point to a negative open for local names

• Energy, Materials – A relatively weak session for energy sectors including oil and uranium plays. Materials sector was also a little weak overnight (-0.20%) but key commodities including iron ore ticked higher (Singapore iron ore futures now at US$105 a tonne).

BROKER MOVES

Goldman Sachs made a few changes to its APAC Conviction list – with Xero and Life360 removed from the list – but then again, these two stocks have experienced a massive run up.

• Gold Road Resources downgraded to Neutral from Overweight; target up to $2.10 from $2.00 (JPM)

• Metcash upgraded to Buy from Neutral; target up to $3.70 from $3.40 (CIT)

Stocks trading ex-dividend: 

• 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: None

• Listing: None

• Earnings: Collins Foods (CKF)

• AGMs: Bank of Queensland (BOQ)

Economic calendar (AEDT):

• 1:00 am: US JOLTs Job Openings (Oct)