Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq shrug off post-CPI selloff

Major US benchmarks opened sharply lower but V-shaped their way to session highs, US core inflation comes in slightly hotter-than-expected amid stubborn shelter prices and several commodities tick higher after Putin warns of potential export restrictions.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 surges from a weak start to close at best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks higher, finished at best levels after opening sharply lower 

• Today’s big story – US core CPI was slightly hotter-than-expected, driving a pullback in 50 bp rate cut expectations for September (now 15% from 44% a week ago)

• Bump in disinflationary trend unlikely to shift Fed’s longer-term rate trajectory, this view might explain why the market rallied after the weak open

• Tech was a standout performer, led by Nvidia (+8.1%), Broadcom (+6.7%)

• Market still pricing in at least two 50 bp Fed cuts by end of Jan-2025 (BBG)

• Morgan Stanley's Mike Wilson says AI boom ending, market needs to find new catalyst to resume rally (BBG)

• JPMorgan President warns investors being too optimistic about its earnings outlook for next year (FT)

• Citi advises caution on European stocks with high exposure to China, expecting Beijing to continue implementing limited, piecemeal measures (BBG)

• Global inflows into ETFs on track to surge to new record highs this year (FT)

STOCKS

• Dell to continue cutting workforce amid sluggish demand for PCs and AI servers (BBG)

• Nvidia CEO says customer relations 'tense' due to shortages and strong demand (BBG)

POLITIC

• Trump and Harris concluded their presidential debate, CNN instant poll showed 63% of viewers though Harris won (BBG)

• Putin says Russia considering export limits on uranium, titanium, and nickel (Reuters)

ECONOMY

• US August core CPI up 0.3% month-on-month, above consensus 0.2% – Largely driven by shelter up 0.5% MoM compared to analyst expectations of deceleration – but headline CPI up 2.5% YoY, below consensus 2.6% (BBG)

• US August core CPI up month-on-month for a third straight month and highest since April while annualised core of 3.2% is holding near lowest since Apr-21

• UK GDP unexpectedly flat in Q3 vs. consensus 0.2% (Reuters)

• Japan business sentiment sinks to seven-month low on soft China demand (Reuters)

ASX TODAY

• ASX 200 set to open higher after a strong overnight lead, an uptick in commodity prices

• Australian Clinical Labs major shareholder Crescent Capital exits full position (30.1%) stake at $3.20 a piece (ACL)

• National Storage REIT launches $300m note, with proceeds to fund repayment of existing debt (NSR)

• REA Group proposal for Rightmove rejected after Board considers the bid as opportunistic and fundamentally undervalues Rightmove and its future prospects (REA)

• Star’s lenders offer $150m lifeline as casino fights for survival (AFR)

WHAT TO WATCH TODAY

• Lithium day two: Most local lithium stocks rallied 5-15% on Wednesday after CATL announced the suspension of lithium operations in China. UBS estimates this cut to lower China's lithium output by approximately 8% and see 11-23% upside in prices for the rest of 2024. Most lithium rallies for the past year or so have been very short lived so it will be interesting to see if this is just another 2-3 day bounce

• Putin's export limits: Putin's comments about potential export restrictions drove the Uranium and Nickel Miners ETF up 5.1% and 3.4% respectively. This might drive some strength for local uranium names (they are also highly shorted)

• Tech strength, defensive weakness: Tech was by far the best performing sector on Wall Street (up 3.2% vs. benchmark up 1.0%) while defensive/cyclical underperformed (real estate, healthcare, financials, staples and energy all finished red)

BROKER MOVES

• A2 Milk initiated Equal-weight with NZ$6.40 target (MS)

• Boss Energy initiated Buy with $3.50 target (UBS)

• Mineral Resources resumed Overweight with $50 target (JPM)

Stocks trading ex-dividend: 

• Thu 12 Sep: Spark New Zealand (SPK) – $0.128, Austin Engineering (ANG) – $0.008, BHP (BHP) – $1.092, McMillan Shakespeare (MMS) – $0.78, Navigator Global (NGI) – $0.044, Earlypay (EPY) – $0.002, Nine Entertainment (NEC) – $0.045, CTI Logistics (CLX) – $0.055, Perpetual (PPT) – $0.53, Atlas Pearls (ATP) – $0.01, Air New Zealand (AIZ) – $0.012, Cash Converters (CCV) – $0.001, TPG Telecom (TPG) – $0.09, PWR Holdings (PWH) – $0.092, Freightways (FRW) – $0.173, XRF Scientific (XRF) – $0.039, Breville Group (BRG) – $0.17

• Fri 13 Sep: Grange Resources (GRR) – $0.005, Ramelius Resources (RMS) – $0.05, FFI Holdings (FFI) – $0.125, Lovisa (LOV) – $0.37, Kelsian (KLS) – $0.095, Ariadne (ARA) – $0.005, Car Group (CAR) – $0.385, SKS Technologies (SKS) – $0.01, Data#3 (DTL) – $0.129, Cleanaway (CWY) – $0.025

• Mon 16 Sep: Echelon Resources (ECH) – $0.013, Saunders International (SND) – $0.022, Credit Corp (CCP) – $0.23, QUBE Holdings (QUB) – $0.052

• Tue 17 Sep: Base Resources (BSE) – $0.065, Duratec (DUR) – $0.025, Wotso Property (WOT) – $0.01, Cochlear (COH) – $2.10, Maas Group (MGH) – $0.035

• Wed 18 Sep: Flight Centre (FLT) – $0.30, Adrad (AHL) – $).016, Sports Entertainment Group (SEG) – $0.02, Supply Network (SNL) – $0.33, Service Stream (SSM) – $0.025, Auckland International Airport (AIA) – $0.059  

Other ASX corporate actions today: 

• Dividends paid: Amotiv (AOV), HiTech Group (HIT), Ansell (ANN), Fiducian Group (FID)

• Listing: None  

• AGMs: None

Economic calendar (AEST):

• 10:15 pm: ECB Interest Rate Decision (Consensus: 25 bp cut)

• 10:30 pm: US Producer Price Index (Aug)