Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq lower on Meta and Microsoft earnings

ASX 200 futures are up 13pts (+0.14%) as of 8:30 am AEDT.

 In a nutshell:

• Major US benchmarks broadly lower as negative earnings reactions for Microsoft, Meta, Chipotle and Starbucks weighed though Amazon shares up 11% after hours on upbeat Q3 earnings

• US-China announced a trade deal, including a lower China tariff rate of 47% (vs. prior 57%), postponed rare earth levies and more

• Capstone Copper and ResMed Q3 earnings (both read well at face value)

Let's dive in.

S&P 500 SESSION CHART

S&P 500 lower, closed near intraday lows (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks lower and closer near worst levels, still on track for solid weekly gains

• Equal-weight S&P 500 (-0.43%) outperformed by 56 bps after lagging massively in the prior five sessions

• Megacap tech earnings in full swing, with Meta (-11.3%) dipped on elevated opex guidance, Alphabet (+2.4%) gained on cloud acceleration and AI momentum, Microsoft (-2.9%) slipped as Azure growth and guidance lagged some elevated expectations

• Gold demand surged to all-time high in Q3 fueled by wave of ETF investing (YF)

• US dollar climbs to three month high amid a weakening yen, upside inflation risks and Fed hawkishness (BBG)

• Private credit firms switching debt positions for equity stakes in an effort to stem losses (BBG)

• Nikkei extends record climb as BoJ refrained from hiking rates (RT)

• Gold price slump continues as Fed Chair Powell houses down for December rate cut expectations (BBG)

STOCKS

• Amazon shares surge 11% after-hours as cloud unit posts strongest growth rate in almost three years (BBG) 

• Meta's $70bn AI spending spree triggers $155bn stock plunge but Alphabet and Microsoft shine (FT)

• OpenAI laying groundwork for IPO for potential $1tn valuation (RT)

• BlackRock's private credit arm looking to recover hundreds of millions tied to "breathtaking" fraud (WSJ)

• Travel software company Navan shares fall 12% after IPO (BBG)

• Samsung Electronics Q3 earnings top expectations as profits surge on soaring chip demand (BBG)

• Airbus beats Q3 expectations on strong delivery performance, adjusts A220 production target (RT)

• Volkswagen faces heavy Q3 loss from tariffs and Porsche's EV strategy reversal (RT)

TARIFFS

• China-US trade deal: China tariffs cut to 47% from 57%, rare earth and China-made shipping levies postponed for a year, fentanyl tariff halved to 10%, Nvidia to talk to China about exporting chips, Beijing to resume “massive amounts” of soybeans and other farm products (BBG)

• Beijing says it will continue to work with Washington on resolving TikTok issue (BBG)

• US and Japan formalise strategic pact to secure rare earths and critical minerals supply chain to reduce dependence on China (CX)

CENTRAL BANKS

• ECB holds rates for third-straight meeting, markets continue to price ~40% chance of another cut by June 2026 (FT)

• Powell's December warning on cuts exposes deepening divisions within the Fed (BBG)

• Nomura forecasts end to Fed rate cuts in 2025 after October easing (RT)

• BOJ holds rates steady again amid ongoing tariff impact and new PM Takaichi overhang (NK)

GEOPOLITICS

• Trump directs US to begin testing nuclear weapons on "equal basis" with Russia and China (BBG)

• Russian forces squeeze Ukraine's Pokrovsk hub, risking encirclement (RT)

ECONOMY

• Germany's Q3 GDP flat quarter-on-quarter, up just 0.3% year-on-year highlighting divergence with Eurozone peers (BBG)

• French GDP unexpectedly accelerates to 0.5% in Q3 vs. ests of 0.1%, shrugging off political turmoil (BBG)

ASX TODAY

• Capstone Copper reports Q3 EPS of 6 cents vs. 3 cents ests, adjusted EBITDA of $249.2m vs. $205.8m ests, reaffirms 2025 copper production and C1 cash cost guidance (CSC) 

• Lynas CEO says rare earth buyers will have to accept premium prices to secure stable supplies from outside China (BBG)

• ResMed reports Q1 EPS of 255 cents vs. 252 ests, gross margin at 62.0% vs. 61.2% ests, NYSE-listed shares down 2.8% after hours (RMD)

• Steadfast Group CEO Robert Kelly steps aside to enable external investigation into workplace complaint made against him (SDF)

WHAT TO WATCH TODAY

• Gold: Sizeable bounce for gold overnight, up ~2% and pushing above the key US$4,000 level. Gold Miners ETF (GDX) up 2.3% but ~15% off recent highs. Sector is still in a tough/volatile spot given recent volatility.

• Rare earths: Trump's trade deal with China (announced just before market close on Thursday) could continue to weigh on rare earth stocks, many of which are down 30-50% from recent highs.

BROKER MOVES

• Champion Iron downgraded to Hold from Buy; target up to $5.65 from $5.40 (BP)

• Lynas upgraded to Neutral from Underweight; target up to $15.00 from $13.00 (JPM)

• IGO downgraded to Sell from Neutral; target cut to $5.20 from $5.35 (UBS)

• Objective Corp initiated Overweight with $25 target (MS)

• Ramelius Resources initiated Buy with $4.00 target (UBS)

• Service Stream initiated Buy with $2.80 target (UBS)

• Ventia Services initiated Buy with $6.23 target (UBS)

Stocks trading ex-dividend: 

• Fri 31 Oct: MA Credit Income Trust (MA1) – $0.014, Metrics Income Opportunities Trust (MOT) – $0.012, Metrics Master Income Trust (MXT) – $0.013, Metrics Real Estate Multi-Strategy Fund (MRE) – $0.008

• Mon 3 Nov: Alcoa Corporation (AAI) – $0.108, La Trobe Private Credit Fund (LF1) – $0.012, Pengana Global Private Credit Trust (PCX) – $0.013, Rand Mining Ltd (RND) – $0.10, Revolution Private Credit Income Trust (REV) – $0.013, Tribune Resources Ltd (TBR) – $0.20

• Tue 4 Nov: Wam Leaders Ltd (WLE) – $0.047

• Wed 5 Nov: Naos Ex-50 Opportunities Company Ltd (NAC) – $0.015, Naos Small Cap Opportunities Company Ltd (NSC) – $0.013

• Thu 6 Nov: Wam Global Ltd (WGB) – $0.065

Other ASX corporate actions today:       

• Dividends paid: Cedar Woods Properties (CWP), GenusPlus Group (GNP), Rural Funds Group (RFF), Steamships Trading Co (SST)

• Earnings: Champion Iron (CIA)  

• IPOs: Advanced Innergy (AIH) at 11:00 am, Golden Globe Resources (GGR) at 12:30 pm 

• AGMs: CAR Group (CAR), Cobram Estate Olives (CBO), Fortescue (FMG), GWA Group (GWA), Integral Diagnostics (IDX), Mader Group (MAD), Pinnacle Investment Management (PNI), Sandfire Resources (SFR), Steadfast Group (SDF)

Economic calendar (AEDT):

• 11:30 am: Australia PPI (Q3)

• 12:30 pm: China NBS Manufacturing and Non-Manufacturing PMI (Oct)

• 9:00 pm: Eurozone Inflation (Oct)