Morning Wrap: ASX 200 to rise, S&P 500 closes at record high, Markets gear for US CPI

ASX 200 futures are trading 33 points higher, up 0.40%, as of 8:30 am AEDT.

Major US benchmarks added to yesterday's big gains, the S&P 500 and Dow closed at record highs, Chinese equities tumble amid the lack of new stimulus, oil is experiencing its most volatile start to a month in two years and tonight's US inflation report could spark a sharp uptick in market volatility.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 trends higher to finish at best levels (Source: TradingView)

OVERNIGHT MARKETS

• S&P 500 hit a fresh record close, the 44th of the year

• Today’s big story – Stocks added to yesterday’s strength although not much new around key narratives such as easing volatility, soft landing optimism and hawkish Fed repricing

• Tonight’s US CPI print presents another opportunity for volatility to ramp back up as a hotter-than-expected  result could spark another hawkish re-rating of the Fed rate cut path

• Bearish Treasury bets beginning to emerge as markets temper Fed rate cut expectations (BBG)

• China equities pull back with technicals, stimulus disappointment and profit-taking highlighted (FT)

• China markets want Beijing to provide more stimulus to fuel rally; market reaction shows mismatch between investors (BBG)

• Chinese stocks suffer biggest drop in more than four years as impatience grows over Beijing's stimulus (BBG)

• Oil prices have seen their most volatile start to a month in almost two years (BBG)

• Goldman Sachs says geopolitical risk premium in oil market slipping (RT)

• South Korea to join FTSE Russell's main bond index, India to join emerging market gauge (BBG)

STOCKS

• DoJ considering recommending breaking up Google as part of antitrust remedy, analysts say outright breakout is unlikely, played down near-term financial impact (BBG)

• TSMC posted a better-than-expected 39% rise in quarterly revenue, in good sign for AI chip demand (BBG)

CENTRAL BANKS

• Fed Vice Chair Jefferson expects continued inflation progress, will judge rates on meeting-by-meeting basis (RT)

• RBNZ cuts rates by 50 bp amid subdued growth outlook (BBG)

• India’s central bank holds and dials back hawkish stance to 'neutral' from 'withdrawal of accommodation' (BBG)

• ECB's Stournaras calls for faster rate cuts as inflation target nears (FT)

• RBA to boost risk assessment scrutiny when deploying unconventional monetary policy (BBG)

POLITICS & GEOPOLITICS

• Biden expected to speak to Netanyahu today, Iran in focus (AX)

• Brussels rejected China proposal for €30K minimum sales price in EV dispute (RT)

• French minority government survives no-confidence vote, faces economic challenges ahead (AP)

ECONOMY

• Hurricane Milton latest crisis putting strain on increasingly tumultuous freight market (YH)

• China holiday activity somewhat better than expected, but consumers remain cost-conscious (BBG)

• German exports rise in August due to strong demand from US and UK, defying expectations of decline (RT)

• French economy shows resilience in Q3 boosted by Olympics, but political uncertainty looms (BBG)

ASX TODAY

• Auckland Airport reports NZ$200m retail offer closes oversubscribed, received applications totalling NZ$223m (AIA)

• Newmont to sell Akyem Gold Mine project to China’s Zijin mining group for up to US$1 billion (NEM)

• NextDC SPP raises $128m at 22% take-up rate vs. $200m target (NXT)

• Platinum Asset Management reports 30-Sep FUM of $12.47bn (Aug: $12.23bn), run rate adjusted expense savings continue to track slightly better than planned (PTM)

• Rio Tinto to acquire Arcadium Lithium for US$5.85 cash per share, projected growth capex to represents ~5% of Rio’s Group capex, deal subject to 75% Arcadium shareholder approval (LTM)

WHAT TO WATCH TODAY

• Lithium: Lithium M&A season might be kicking off, with Rio Tinto set to buy out Arcadium Lithium at a 90% premium. The acquisition will propel the mining giant into the top five of lithium players. Majors Albemarle and SQM ticked 1-2% higher overnight – So the news did not re-rate the sector higher. Let's see how local names react.

• Resources vs. banks: Another muted overnight session for resources. Most of our overnight ETFs including copper, uranium, nickel and gold ticked lower. BHP and Rio Tinto ADRs also finished down -0.3% and -0.4% respectively. Could the lack of momentum for resources see capital rotate back into banks?

BROKER MOVES

• Aura Energy initiated Speculative Buy with $0.40 target (ARG)

• Bannerman Resources initiated Speculative Buy with $4.50 target (ARG)

• Deep Yellow initiated Hold with $1.50 target (ARG)

• Droneshield downgraded to Hold from Buy; target remains $1.35 (BP)

• Graincorp downgraded to Hold; target cut to $9.80 from $10.20 (BP)

• Lotus Resources initiated Speculative Buy with $0.40 target (ARG)

• NAB downgraded to Reduce from Hold; target cut to $31.61 from $32.61 (MORG)

Stocks trading ex-dividend: 

• Thu 10 Oct:  Duxton Water (D2O) – 2.74%, WAM Active (WAA) – 3.26%

• Fri 11 Oct: Turners Automotive Group (TRA) – 1.28%, WAM Research (WAX) – 4.17%

• Mon 14 Oct: Civmec (CVL) – 2.78%, Clime Capital (CAM) – 1.64%, Star Combo Pharma (S66) – 2.64%

• Tue 15 Oct: Cadence Capital (CDM) – 4.00%, Cadence Opportunities Fund (CDO) – 3.95%, Harvey Norman (HVN) – 2.44%, United Overseas Australia (UOS) – 0.92%, WAM Microcap (WMI) – 3.42%, Washington H. Soul Pattinson (SOL) – 1.59%

Other ASX corporate actions today: 

• Dividends paid: Australian Finance Group (AFG), BlackWall (BWF), Brambles (BXB), Cash Converters International (CCV), Cochlear (COH), Coventry Group (CYG), Cryosite (CTE), Embelton (EMB), Endeavour Group (EDV), Eureka Group (EGH), Finbar Group (FRI), Fonterra Shareholders Fund (FSF), Genesis Energy (GNE), HUB24 (HUB), Imdex (IMD), Lindsay Australia (LAU), Macmahon (MAH), Monash IVF Group (MVF), Pacific Smiles Group (PSQ), Pepper Money (PPM), SKS Technologies Group (SKS), Solvar (SVR), TPG Telecom (TPG), Vulcan Steel (VSL), Westgold Resources (WGX)

• Listing: None

• AGMs: Aurizon (AZJ)

Economic calendar (AEDT):

• 10:30 pm: US Inflation Rate (Sep)