Morning Wrap: ASX 200 to rise, S&P 500 falls ahead of key jobs data

US markets finished pretty mixed overnight as tech gains failed to offset weakness everywhere else, markets are focused on tonight's US jobs data – a key input on whether or not the Fed will cut 25 or 50 bps later this month, Tesla says its self-driving product is coming to Europe and China early next year and Arcadium Lithium is one of the first major miners to close a lithium operation in Australia.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 gives back early gains, finishes a bit off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished mostly lower, ended a little off worst levels

• Value underperformed while growth/tech stocks bounced, led by Amazon (+2.6%) and Tesla (+4.9%) 

• Today’s big story – Mixed data (weaker-than-expected US private payrolls, better jobless claims and stronger-than-expected services PMI) as market continues to juggle soft/hard landing views and questions about the Fed’s 25 or 50 bp cut at its 18-Sep meeting

• Market focused on tonight’s August nonfarm payrolls report – which will act as a key input in the Fed’s decision making 

• Rate options traders step up bets Fed will kick off easing cycle with 50 bps rate cut (BBG)

• Market comfortably absorbs Tuesday's US$43bn of high grade bond issuance (BBG)

• China's slowdown leads to weakest EPS performance since 4Q22 (BBG)

• OPEC+ to delay output hike by two months amid oil selloff and weak demand (CNBC)

STOCKS

• Tesla plans to launch Full Self Driving technology in China and Europe in 1Q25, pending regulatory approvals (BBG)

• Hewlett Packard shares dip on weaker-than-expected margins, raises full-year view citing robust demand for AI products (RT)

• Amazon near major deal to broadcast NBA, MLB, and NHL on Prime (NY Post)

• OpenAI has reached one million paid users of business version of ChatGPT (BBG)

CENTRAL BANKS

• RBA Governor Bullock reiterates rate cuts are premature as inflation remains too high (RT)

POLITICS & GEOPOLITICS

• Harris floats 28% CGT on those earning $1m vs Biden's proposal for 39.6% rate (BBG)

• White House scrambling to put forward a new proposal for a Gaza ceasefire and release of hostages by Hamas in the coming days (RT)

ECONOMY

• US ISM services PMI printed 51.5 vs. 51.1 consensus, reported noted slow-to-moderate growth across many many industries (RT)

• Japan real wages rise for second month, reinforcing views of another BOJ rate hike (BBG)

• German factory orders post surprise jump in July (BBG)

• South Korean GDP falls in-line with estimates, calls for BOK to shift to easing stance (BBG)

ASX TODAY

• Arcadium Lithium suspends Mt Cattlin stage 4A waste striping, plans to transition project into Care & Maintenance by mid-2025 (LTM)

WHAT TO WATCH TODAY

Not a whole lot going on – Our overnight ETFs point to a weak lead in for several sectors including uranium and copper, while gold equities bounced overnight on higher bullion prices. A few broader things of interest include:

• MinRes is down 19.8% so far this week – the now $6.6bn company carries $4.4bn debt with plans to spend almost $2bn on capex in FY25. This goes to show how quickly the market can turn on a heavily leveraged cyclical name

• Reporting season winners: Names like Brambles, AMP, Orora and Service Stream are holding up after a massive one-day rally (can they break higher). While names like Judo Capital, Life360, Pro Medicus and Wisetech have continued to climb after the initial one-day pop.

BROKER MOVES

A ratings downgrade but target price upgrade might seem contradictory but it usually means: i) the broker remains optimistic about the company's fundamentals but ii) the stock's recent performance has outpaced what their financial models can justify. In the case of Guzman y Gomez, it's up 30% since August to $37.

• Guzman y Gomez downgraded to Sell from Neutral; target up to $35 from $31 (UBS)

Stocks trading ex-dividend: 

• Fri 6 Sep: Summerset Group (SNZ) – $0.088, Smartgroup (SIQ) – $0.175, Cryosite (CTE) – $0.05, AUB Group (AUB) – $0.59, G8 Education (GEM) – $0.02, Generation Development (GDG) – $0.01, Aussie Broadband (ABB) – $0.04, Wisetech Global (WTC) – $0.092

• Mon 9 Sep: Objective Corp (OCL) – $0.09, Viva Energy (VEA) – $0.067, CSL (CSL) – $2.203, Hub24 (HUB) – $0.195, Super Retail Group (SUL) – $0.87, Australian Finance (AFG) – $0.04, Perseus Mining (PRU) – $0.037

• Tue 10 Sep: SG Fleet (SGF) – $0.243, News Corp (NWS) – $).107, Regis Healthcare (REG) – $0.066, Shriro Holdings (SHM) – $0.03, Bluescope Steel (BSL) – $0.30, Eagers Automotive (APE) – $0.24, Peet (PPC) – $0.028

• Wed 11 Sep: EVT (EVT) – $0.20, Kogan (KGN) – $0.075, Ive Group (IGL) – $0.085, Adairs (ADH) – $0.07, Dusk Group (DSK) – $0.04, Pepper Money (PPM) – $0.05, IDP Education (IEL) – $0.09, IGO (IGO) – $0.26, Qualitas (QAL) – $0.058, Brambles (BXB) – $0.289, Mercury NZ (MCY) – $0.127, Accent Group (AX1) – $0.045, LGI (LGI) – $0.013, Cue Energy (CUE) – $0.01, Finbar (FRI) – $0.08  

• 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

Other ASX corporate actions today: 

• Dividends paid: GWA Group (GWA), JB Hi-Fi (JBH), Korvest (KOV), Hotel Property Investments (HPI)

• Listing: None  

• Earnings: None

• AGMs: None

Economic calendar (AEST):

• 11:30 am: Australian Home Loans (Jul)

• 4:00 pm: Germany Balance of Trade (Jul)

• 10:30 pm: Canada Unemployment Rate (Aug)

• 10:30 pm: US Non Farm Payrolls (Aug)