Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq rebound from AI rout, hot US October payrolls revive Fed hike bets

In a nutshell:

• Wall Street was mixed after Thursday's post midterm AI rout, with the S&P 500 and Nasdaq making gains as dip buyers returned to chipmakers, though both benchmarks still finished the week lower

• October payrolls more than doubled ests, pushing market-implied odds of a December Fed rate hike back above 75% ahead of Tuesday’s US CPI print

• Brent capped a steep 12% weekly fall to US$97 a barrel as Bloomberg reported the US and Iran are edging closer to a deal, with Tehran now open to discussing its nuclear program

Let's dive in.

• Major US benchmarks mostly higher, finished off best levels as dip buyers returned to chipmakers, with the Nasdaq 100 up 1.35% and a gauge of chip giants up 4.2%, though most S&P 500 members fell

• S&P 500 fell 2.7% for the week, the Nasdaq lost 3.4% and the Dow shed 0.9%, with all three still up between 5.8% and 7.8% for the year

• US bond yields rose Friday as strong jobs data revived December hike wagers, after midterm-driven haven buying pushed yields to their lowest since early September on Thursday

• Brent settled near US$98 a barrel, capping its biggest weekly drop since 2022, as traders weighed Iran diplomacy and recovering Gulf exports, while oil traders sought US approval to use some sanctioned tankers (BBG)

• A BMO survey found 48% of bond investors would buy a Treasury dip, the most in four months, while five-year breakevens fell to about 2.27% from 2.5% as oil slumped (BBG)

• The six largest hyperscalers are expected to spend more than $850bn on AI this year, up 83%, as tech overtakes other non-financial sectors in investment-grade bond issuance (BBG)

• CoreWeave’s five-year CDS eased 8% to about 1,155bp on Friday after topping 1,289bp, while Nvidia’s swaps are up 76% in a month as AI credit stress lingers (CNBC)

• South Korea waived margin-loan collateral requirements for three months from Monday to curb forced selling after the Kospi’s rout, with margin balances already down 26% from June’s peak (Seoul Economic Daily)

• OpenAI closed about $11bn of new funding at a $1.25tn valuation, the first part of a round that could grow to as much as $20bn (BBG)

• Berkshire Hathaway Q3: operating earnings fell 5.8% to $12.7bn, buybacks of about $9.6bn under CEO Greg Abel, cash pile rose to $377.4bn from the prior quarter despite the spending (BBG)

• TSMC has begun drafting plans to make advanced 3D DRAM memory chips at the request of Nvidia, its biggest customer, The Information reported, a move that would widen its role in the AI supply chain (BBG)

• Nvidia is requiring Southeast Asian customers seeking Nvidia Cloud Partner status to enrol in a program tracking the location of their AI chips, as Washington steps up scrutiny of smuggling into China (BBG)

• Moderna Q3: revenue up 29% to $1.31bn, beat ests by ~48%, EPS $0.38 versus ests for a loss, raised 2026 revenue growth outlook to 15-25% from up to 10% (CNBC)

• Trump is set to clash with the incoming Democratic-led Congress over tariffs, with Ron Wyden vowing to reassert congressional authority over trade, though curbing tariff powers will be neither easy nor quick (BBG)

• Democrats plan to start rolling back Trump’s tariffs with Canadian goods, where duties range from 15% to 50% on steel, aluminium, dairy and appliances, but repeal would need 60 Senate votes (YF)

• BloombergNEF now sees nine of 10 transition metals on track for sufficient supply capacity through 2050 and expects long-term downward pressure on lithium, nickel, cobalt and manganese prices (BBG)

• The US and Iran are edging closer to a breakthrough to end the war, with Tehran studying Qatari proposals on its nuclear program that were previously off the table, a diplomat told Bloomberg (BBG)

• Trump said fresh strikes on Iran are highly unlikely to be needed if talks yield a strong agreement, while noting the US has identified 38 bridges it could destroy within an hour (RT)

• The US military launched Task Force Iron Gate to curb Iran’s movement of weapons and sanctioned goods across its land borders and the Caspian Sea, extending its months-long naval blockade (RT)

• Markets priced about a 78% chance of a December Fed hike after the jobs data, up from 67% on Thursday, with traders bringing forward the expected next-and-final hike to April from June (RT)

• San Francisco Fed President Mary Daly said she expects the Fed will need to tighten policy further, describing Americans as stuck on a treadmill of high inflation (CNBC)

• US nonfarm payrolls rose 165,000 in October versus ests of 65,000, topping all forecasts, while unemployment fell to 4.1% and the prior two months were revised higher (BBG)

• Bloomberg Economics said hiring was strong and broad-based, with revisions showing the summer slowdown was milder than first reported, though labour tightness gauges still signal little inflationary impulse (BBG)

• ANZ’s full-year cash profit rose 31% to $7.59bn, or 10% excluding FY25 significant items, as $902m in gross cost savings cut expenses 7% and lifted cash return on tangible equity 109bps to 11.56%. The bank declared a final dividend of 83 cents per share, with franking raised to 80% from 75%, while its collective provision charge rose $108m to $222m as higher interest rates and cost-of-living pressures weighed on customers (ANZ)

• Ventia expects second-half FY26 revenue to fall below the prior corresponding period on deferred telecommunications and energy work, but maintained guidance for 7-10% underlying NPATA growth. New CEO Mark Ralston will consolidate the company into three operating sectors from 1 December, targeting at least $60m in annualised savings by December 2027 at a one-off cost of about $30m (VNT)

• Metals X has submitted a revised non-binding cash offer for London-listed First Tin, with the UK Takeover Panel extending the deadline for Metals X to make a firm offer or walk away to 5pm (London time) on 20 November. The company said there is no certainty an offer will be made (MLX)

• Kerry is back tomorrow

Stocks trading ex-dividend: 

• Mon 9 Nov: Clime Capital (CAM) – $0.005, Future Generation Australia (FGX) – $0.038, NAOS Ex-50 Opportunities Company (NAC) – $0.016, NAOS Small Cap Opportunities Company (NSC) – $0.01

• Tue 10 Nov: None

• Wed 11 Nov: ResMed (RMD) – $0.066

• Thu 12 Nov: Dominion Income Trust 1 (DN1) – $0.687

• Fri 13 Nov: None

Other ASX corporate actions today:       

• Dividends paid: None

• IPOs: None

• AGMs: Ansell (ANN)

Economic calendar (AEDT):

• 9:30 am: RBA Hunter Speech

• 12:30 pm: China Inflation Rate