Market Wraps

Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq hit third straight record close as CPI cools

Thu 13 Jun 24, 8:33am (AEST)

ASX 200 futures are trading 52 points higher, up 0.67% as of 8:30 am AEST.

While the S&P 500 and Nasdaq closed at another record high, it wouldn't be a Powell Fed Day without the US market giving back some of its gains into the close. The Fed's economic projects flagged higher inflation and less rate cuts, taking some heat out of earlier gains.

Let's dive in.

Overnight Summary

Thu 13 Jun 24, 8:24am (AEST)

Name Value % Chg
Major Indices
S&P 500 5,421 +0.85%
Dow Jones 38,712 -0.09%
NASDAQ Comp 17,608 +1.53%
Russell 2000 2,057 +1.62%
Country Indices
Canada 21,962 +0.34%
China 3,037 +0.31%
Germany 18,631 +1.42%
Hong Kong 17,938 -1.31%
India 76,607 +0.20%
Japan 38,877 -0.66%
United Kingdom 8,215 +0.83%
Name Value % Chg
Commodities (USD)
Gold 2,354.8 +1.21%
Iron Ore 106.42 +0.14%
Copper 4.567 +1.26%
WTI Oil 78.5 +0.77%
Currency
AUD/USD 0.6664 +0.86%
Cryptocurrency
Bitcoin (AUD) 102,725 +1.52%
Ethereum (AUD) 5,348 +1.74%
Miscellaneous
US 10 Yr T-bond 4.295 -2.48%
VIX 12.04 -6.30%

US Sectors

Thu 13 Jun 24, 8:24am (AEST)

SECTOR % CHG
Information Technology +2.46%
Industrials +0.93%
Consumer Discretionary +0.84%
Real Estate +0.69%
Materials +0.22%
Communication Services +0.17%
SECTOR % CHG
Financials +0.09%
Health Care -0.20%
Utilities -0.67%
Consumer Staples -1.00%
Energy -1.09%

S&P 500 SESSION CHART

S&P 500 intraday
S&P 500 finished higher amid a volatile, CPI and Fed-driven session (Source: TradingView)

OVERNIGHT MARKETS

  • Major US benchmarks mixed, with the S&P 500 and Nasdaq scoring a third-straight session of record highs while the Dow and equal-weight S&P lagged

  • S&P 500 rallied as much as 1.34% on the cooler-than-expected inflation print, sold off after the release of FOMC projections 

  • Market breadth not looking great – E.g. only 8 of the 30 Dow stocks finished green

  • Oracle (+13.3%), Nvidia (+3.5%) and Apple (+2.8%) were the key runners

  • Bond yields lower but off session lows – the US 2-year yield fell as much as 17 bps to 4.67% but recouped half the decline after FOMC

  • Apple passes Microsoft to reclaims title as most valuable company (Reuters)

  • Traders push up odds of September rate cut following May CPI report (Bloomberg)

  • Citi forecasts oil to decline to US$60s by 2025 amid supply surplus (Oilprice)

STOCKS

  • Oracle earnings come in below expectations but shares jump on AI deals (CNBC)

  • Apple-ChatGPT deal strengthens OpenAI's position, raises questions about Microsoft deal and is a setback for Google (WSJ)

  • Amazon Web Services to invest billions to launch an AWS infrastructure region in Taiwan by early 2025 (WSJ)

  • Caterpillar raises buybacks authorisation by US$20bn, boosts dividend (Reuters)

  • FedEx to lay off ~2,000 back-office positions in Europe due to weak demand (Reuters)

US CPI

  • May core CPI up 0.2% month-on-month, the lowest since Aug-21 and below consensus

  • Annualised core of 3.4% was below consensus 3.5% and prior month’s 3.6%

  • May headline CPI was flat month-on-month vs. expectations of a 0.1% increase

  • Annualised headline of 3.3% was below the 3.4% expected

  • Energy was a key driver of deflation, down 2.0% month-on-month

  • Shelter up 0.4% month-on-month, marking the fourth consecutive month of 0.4% increases – shelter accounts for approximately two thirds of annual core CPI

  • Motor vehicle insurance declined and decelerated from the prior month for the first time in almost three years

  • Analysts flagged the CPI print as artificially cool as declines in airline fares and car insurance are not sustainable 

FED DECISION

  • Fed left rates unchanged, in-line with market expectations

  • Updated dot-plot shows just one rate cut in 2024, down from three in March forecast

  • 4 officials forecast zero cuts, 7 see a single cut and 8 are projecting two cuts

  • Core PCE forecast up to 2.8% from 2.6% in March – this implies no more progress in 2024. Most officials had the opportunity to revise projections after today’s CPI but did not elect to do so

  • Labour conditions mirror pre-pandemic conditions – “relatively tight. Not overheated.” – unemployment to remain 4.0% in 2024, 4.2% by 2025 (4.1% previously)

GEOPOLITICS

  • US mulling additional curbs on China's access to latest AI technology (Bloomberg)

  • European Commission to apply 25% tariff to China EV imports (Bloomberg)

  • Israeli strike kills senior Hezbollah field commander, Hezbollah retaliates (Reuters)

  • US to broaden scope of Russia sanctions, likely to include China sellers (FT)

ECONOMY

  • China CPI rose less than expected in May and factory prices dropped for 20th month in a row (Bloomberg)

  • German CPI up 2.8% in May, above expectations, due to higher services prices (Reuters)

  • Japan producer prices reach nine-month high, fourth consecutive month of gains (Bloomberg)

  • UK GDP growth flat in April vs. 0.4% acceleration in March (Bloomberg)

Industry ETFs

Thu 13 Jun 24, 8:23am (AEST)

Name Value % Chg
Commodities
Uranium 29.89 +3.14%
Silver 27.03 +1.20%
Gold Miners 34.0 +0.74%
Strategic Metals 48.1 +0.42%
Copper Miners 45.19 +0.29%
Lithium & Battery Tech 42.35 +0.12%
Steel 66.62 -0.30%
Industrials
Construction 70.1 +2.56%
Agriculture 25.75 +1.90%
Global Jets 20.03 +1.73%
Aerospace & Defense 134.85 +0.12%
Healthcare
Biotechnology 137.81 +0.73%
Name Value % Chg
Cryptocurrency
Bitcoin 25.49 +0.24%
Renewables
CleanTech 9.62 +1.48%
Hydrogen 6.19 +1.48%
Solar 48.29 +0.96%
Technology
Semiconductor 250.23 +2.82%
Robotics & AI 31.82 +2.22%
Electric Vehicles 24.79 +1.31%
FinTech 25.68 +1.30%
E-commerce 24.26 +1.08%
Cybersecurity 29.02 +0.94%
Sports Betting/Gaming 16.9035 +0.62%
Cloud Computing 19.75 +0.56%
Video Games/eSports 65.9 -0.81%

ASX TODAY

  • ASX 200 set to rise following encouraging US inflation data, lower yields and a (volatile) uptick in commodity prices

  • While major US benchmarks ticked higher, the gains were highly concentrated. The hawkish Fed projections and pullback in commodity prices could take some heat out of the session

  • Gold rallied as much as 1.1% after the inflation report but finished the overnight session up just 0.36% – this price action was reflected in the VanEck Gold Miners ETF which finished 0.7% higher from session highs of 3.1% – commodities including nickel, copper and palladium experienced similar price action

  • Uranium equities bounced overnight, with the Global X Uranium ETF up 3.1% (down as much as 10% in the previous seven sessions) – this could point to some relief for local names

  • Carnarvon Energy’s future at the mercy of joint-venture partner Santos (The Aus)

  • Qantas to purchase remaining 49% of TripADeal for $211m, also reaffirmed FY24 and FY25 guidance (QAN)

BROKER MOVES

  • Codan initiated Buy with $13.10 target (UBS)

  • Lovisa downgraded to Hold from Buy; target cut to $35 from $39 (Jefferies)

  • Seek upgraded to Overweight from Neutral; target up to $26.50 from $25.30 (JPMorgan)

Key Events

Companies trading ex-dividend: 

  • Thu 13 June:  Champion Iron (CIA) – $0.11, Plato Income Maximiser (PL8) – $0.006, Incitec Pivot (IPL) – $0.043 

  • Fri 14 June: None

  • Mon 17 June: None

  • Tue 18 June: Premier Investments (PMV) – $0.63

  • Wed 19 June: Afp Pharmaceuticals (AFP) – $).01 

Other ASX corporate actions today: 

  • Dividends paid: Hancock and Gore (HNG) – $0.01, Resmed (RMD) – $0.048, Dalrymple Bay Infrastructure (DBI) – $0.053

  • Listing: None

Economic calendar (AEST):

  • 10:30 am: Australia Consumer Confidence

  • 11:30 am: Australia Unemployment (May)

  • 10:30 pm: US PPI (May)

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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