Morning Wrap: ASX 200 to rise, S&P 500 higher ahead of CPI print, Oil prices hit a two-year low

Markets are in waiting mode ahead of tonight's US CPI print and Presidential debate, Brent crude slumps to the lowest level in two-and-a-half years, Apple reveals its AI-powered iPhone 16 as well as next generation Watches and AirPods, real estate stocks are rallying as bond yields topple and MinRes receives FIRB approval for the sale of its 49% stake in Onslow Iron Haul Road.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 recovers from midday weakness to close near best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks were mostly higher and managed to reverse midday weakness to finish near best levels

• US bond yields continued to fall, with the 2-year below 3.6% for the first time since Sep-22 and 10-year down for six straight session to lowest level since Jun-23

• Brent crude down another 3.0% to US$69 a barrel or the lowest close since Dec-21 –  Oil’s downward spiral is now sparking some recessionary concerns

• Today’s big story – Market in waiting mode ahead of tonight’s August CPI print, consensus is looking for year-on-year inflation to ease from 2.9% to 2.6% and core inflation to remain unchanged at 3.2%   

• Multi-manager hedge funds suffer outflows for first time in seven years as investor frenzy over hot sectors fade (FT)

• Nervous stock markets sees demand for portfolio hedging picking up amid US election risk, shifting Fed rate policy (RT)

• Goldman Sachs strategists say US stocks unlikely to slump 20% or more as hard-landing risk remains low against expected Fed rate cut (BBG)

• JPMorgan sees record cash pile in money market funds getting bigger even as Fed begins cutting rates (BBG)

• UBS expects S&P to fall 10% from peak within a month, says disappointing data could trigger unwind (BBG)

• OPEC trims its forecast for global oil demand growth for 2024 and 2025 (RT)

STOCKS

• Morgan Stanley says M&A, IPO activity to remain below-trend for rest of 2024 (RT)

• Apple launches iPhone 16 with AI capabilities (FT)

• DoJ accuses Google of dominating ad tech market monopoly (FT)

• Oracle shares surge 11% on Q2 earnings beat (BBG)

• Under Armour cuts outlook on higher-than-expected costs amid restructure (BBG)

POLITICS & GEOPOLITICS

• Harris promises to end sub-minimum wages for tipped workers, proposes higher minimum wage (BBG)

• Trump escalates tariff threat in vow to protect US dollar, warns countries to stick with greenback in trades or face 100% levy (FT)

• EU to lower proposed tariffs on Tesla and other EVs from China (BBG)

• Israeli strikes kill dozens Gaza humanitarian zone, Gaza health ministry says (RT)

ECONOMY

• China export growth unexpectedly higher, imports stagnate on tepid demand (RT)

• German inflation reached lowest point in over three years in August (RT)

• Taiwan exports hit record high in August on AI-related shipments (RT)

• Australian consumer, business sentiment darkens as job concerns mount (BBG)

ASX TODAY

• ASX 200 set to open relatively flat after a mixed overnight session and further commodity price weakness

• ARN Media holder Samuel Terry AM increases stake from 7.4% to 17.0% (A1N)

• MinRes receives conditional approval from FIRB for sale of 49% stake in Onslow Iron Haul Road to Morgan Stanley, transaction due to occur within 15 business days (MIN)

• MinRes guides to $180m of FY25 capex savings and $120m of FY25 operational cost savings including reduction of headcount at Mr Marion and Wodgina ops (MIN)

• NextDC launches $550m fully-underwritten placement and $200m SSP at $17.15 (3.7% discount) to fund acquisition of new development sites in Asia (NXT)

• NextDC guides FY25 capex $1.3-1.5bn vs. prior guidance $900m-1.1bn following increase to site acquisition in Sydney (NXT) 

• REA Group starts takeover talks with UK Property Portal Rightmove, initial proposal values the company at around 700 pence or a 25% premium (BBG)

• Southern Cross is nearing deal to sell television business (The Aus)

WHAT TO WATCH TODAY

There's not a whole lot going on – Let's just see how things go after tonight's CPI print.

• Energy: The S&P 500 Energy sector underperformed the official benchmark by 237 bps. Most local names including WDS, KAR and BPT are already trading around 52-week lows and expected to trend lower against this weak oil price backdrop.

• Uranium: URA ETF rallied 2.1% overnight but local names were front-running this move (e.g. PDN +5.8%, BOE +4.4%)

• Gold: Gold is on a two-day winning streak and within 0.3% of all-time highs. The bounce back could see some positive follow through for local names.

• Real Estate: Bond yields are trending to 2-3 year lows. Most REITs have an inverse correlation with yields, which has seen most names perform strongly over the past couple of months (e.g. Charter Hall up around 40% since July).

BROKER MOVES

• ARB Corp upgraded to Overweight from Equal-weight; target up to $46 from $40.5 (MS)

• Aussie Broadband initiated Neutral with $3.95 target (UBS)

• Goodman Group upgraded to Buy from Neutral; target up to $40 from $37.60 (JARD)

• Superloop initiated Buy with $2.20 target (UBS)

Stocks trading ex-dividend: 

• 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

• 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 

Other ASX corporate actions today: 

• Dividends paid: Eumundi Group (EBG), Sequoia Financial (SEQ), Reef Casino Trust (RCT), Domain Holdings (DHG)

• Listing: None  

• AGMs: None

Economic calendar (AEST):

• 4:00 pm: UK GDP (Jul)

• 10:30 pm: US Inflation Rate (Aug)