Morning Wrap: ASX 200 to rise, S&P 500 extends gains, Gold and silver prices implode

ASX 200 futures are up 48 pts (+0.54%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks mostly higher following a volatile session featuring rising odds of a US government shutdown, still-solid Q4 earnings, a Blackrock executive emerging as the likely Fed Chair and more

• Gold and silver prices surged to historic levels of US$5,111 and US$117 respectively, but quickly gave back gains

• Commodity prices, more broadly speaking, experienced a rip and dip move overnight (e.g. Palladium rallied as much as 7.1%, now down 3.7%)

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher, closed slightly off best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks higher, closed a little off best levels

• S&P 500 and Dow within 0.5% of all-time highs, Nasdaq ~1.7% away from its 29-Oct-25 record

• Gold crossed US$5,000, silver briefly rallied as much as 14% to US$117 (best session since Mar-1985) but now up just ~2.6% to US$105

• Extremely volatile session from a headline perspective, with Trump threatening 100% tariffs on Canada, rising odds of a US government shutdown, still-strong earnings reports and more

• Rare earth stocks tumble after Trump announces stake in USA Rare Earth (YF)

• Ahead of expected long Fed pause, bond investors adding risk by extending duration (RT)

• US Dollar heads for worst week since June on US policy unpredictability (BBG)

• US natural gas futures jump 63% in record three-day rally on extreme cold forecasts threatening production and grid across southern states (WSJ)

• Japan acting on currency moves per US-Japan statement, forex trades on edge (BBG)

• Japan bond crash raises $7tn global risk as PM Takaichi's snap election call fuels market volatility (BBG)

• OPEC+ expected to maintain steady oil output amid surplus and rising geopolitical risks (BBG)

STOCKS

• Microsoft reveals second generation of its AI chip in effort to bolster cloud business (CNBC)

• Nvidia takes $2 billion stake in data center company CoreWeave (AX)

• Apple unveils an upgraded AirTag accessory with longer range (WSJ)

• Anthropic sought several billion dollars to power Siri, Apple balked at terms (TI)

• Intel warns of AI server chip supply issues, guides below for March quarter (RT)

• Amazon planning to eliminate 14,000 jobs across a number of units, including AWS, retail, Prime Video and HR (RT)

TARIFFS

• Canada's PM Carney says review of USMCA trade deal will be robust (RT)

• EU still undecided about how to move ahead with US trade deal after Greenland confrontation (RT)

• US government to take 10% stake in USA Rare Earth as part of $1.6bn support package for domestic mine and magnet plant (RT)

CENTRAL BANKS

• Blackrock executive Rick Rieder as most likely to be nominated by President Trump to succeed Jay Powell as Fed chair (PM)

• PBOC sets strongest daily yuan reference rate fix since August, signaling tolerance for further currency gains amid dollar weakness (BBG)

GEOPOLITICS

• China's top general accused of leaking nuclear secrets to US, bribery allegations threaten military readiness (RT)

• Bessent says US-China relationship in 'very good equilibrium', Trump and Xi could meet four times this year (POL)

• US seeks to rewrite 1951/2004 Greenland defence pact with Denmark, removing consultation limits for unrestricted military access (BBG)

ECONOMY

• China likely to set 2026 GDP growth target at 4.5-5%, signaling tolerance for modest slowdown in favor of high-quality development (SCMP)

• Eurozone PMI holds at 51.5 as services slow, but manufacturing shows green shoots (RT)

• UK PMI sees strongest upturn in activity since April 2024 (RT)

• Sharp rise in expectations for a partial government shutdown after Friday, when funding authorization expires for agencies representing ~75% of federal discretionary spending (POL)

ASX TODAY

• Bit quiet on the announcement front, I'll be covering anything else that drops via the Live Blog

• Bluescope holds discussions with Nippon Steel, POSCO to explore their interest in buying stake in or taking over Bluescope (AFR)

WHAT TO WATCH TODAY

• Resources: Very confusing lead in as our market has to digest the last two overnight sessions. Massive fade for most resources overnight (e.g here's the close vs. session high for ETFs like Copper (2.4% vs. 7.8%), Nickel (1.4% vs. 7.4%), Gold (0.4% vs. 5.1%) and Rare Earths/Strategic Metals (4.0% vs. -1.5%) Though most of these ETFs are up over the last two sessions, so hard to say where local miners are going to go on Tuesday (weak momentum vs. two-day net positive).

BROKER MOVES

• Pro Medicus upgraded to Outperform from Neutral but target cut to $291.30 from $321.60 (MQG)

• Ramsay Healthcare downgraded to Underweight from Equal-weight; target cut to $34.20 from $34.80 (MS)

• Tabcorp downgraded to Underweight from Overweight; target cut to $0.93 from $1.02 (MS)

• Telstra Group upgraded to Overweight from Neutral; target up to $5.25 from $4.74 (JPM)

• The Lottery Corp upgraded to Overweight from Equal-weight; target up to $5.70 from $5.60 (MS)

• TPG Telecom downgraded to Underweight from Neutral; target cut to $3.50 from $3.80 (JPM)

Stocks trading ex-dividend: 

• Tue 27 Jan: Spheria Emerging Companies (SEC) – $0.038

• Wed 28 Jan: None

• Thu 29 Jan: 360 Capital Mortgage REIT (TCF) – $0.05, CD Private Equity Fund I (CD1) – $0.05, CD Private Equity Fund II (CD2) – $0.38, CD Private Equity Fund III (CD3) – $0.04, EUROZ Hartleys Group Ltd (EZL) – $0.025, Gryphon Capital Income Trust (GCI) – $0.012, KKR Credit Income Fund (KKC) – $0.017, Perpetual Credit Income Trust (PCI) – $0.006

• Fri 30 Jan: Djerriwarrh Investments Ltd (DJW) – $0.072, MA Credit Income Trust (MA1) – $0.014

Other ASX corporate actions today:       

• Dividends paid: 360 Capital REIT (TOT)

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

No major economic announcements.