Morning Wrap: ASX 200 to rise, S&P 500, Nasdaq inch higher + Gold, copper and uranium stocks soar

The S&P 500 and Nasdaq eked out a small gain following softer-than-expected services data and a 'no surprises' speech from Fed Chair Powell, gold hits another record high, copper prices soar to levels not seen since February 2023 and uranium equities trended higher overnight.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher but off best levels (Source: TradingView)

MARKETS

• S&P 500 higher but finished off best levels after a volatile season

• Bond yields, US dollar and VIX lower after recent upswing

• Overnight markets supported by yield stabilisation following softer-than-expected ISM services data and cooling price sub-index as well as no surprises from Powell speech

• Gold hit record high of US$2,300, extends win streak to eight

• Copper soars to US$4.2/lb for the first time since February 2023 

• Powell delivered economic remarks where he largely reiterated previous commentary on monetary policy and expects the Fed to  cut this year (Fed)

• Rally in gold and oil may suggest heightening geopolitical risks which may weigh on equities (AFR)

• OPEC+ leaves policy unchanged, next meeting scheduled for 1-June (OilPrice)

ASX TODAY

• ASX 200 set to break a two-day losing streak after commodity prices soared overnight

• Lendlease holder Tanarra Capital advocates for demerger of international assets (AFR)

• Norway’s $1.5 trillion wealth fund raises concerns with Rio Tinto amid environmental worries (Bloomberg)

• Suncorp to sell New Zealand life insurance business for NZ$410m (SUN)

• Whitehaven Coal nearing deal to sell stake in Blackwater Mine (AFR)

• Winsome Resources obtains exclusive call option to acquire Renard mining project or Stornoway for C$52m (WR1)

BROKER NOTES

• Champion Iron downgraded to Overweight from Buy and target cut to $7.76 from $9.24 (Jarden)

• Metcash initiated Equal-weight with $4.15 target (Morgan Stanley)

• oOh!Media initiated buy with $2.05 target (UBS)

• QBE Insurance downgraded to Neutral from Outperform but target raised to $18.0 from $17.10 (Macquarie)

INTERNATIONAL STOCKS

• Intel discloses US$7bn operating losses at its foundry business for 2023 (Reuters)

• TSMC temporarily halts chipmaking due to earthquake (Bloomberg)

• Glencore may switch listing to US from London (Bloomberg)

• Spotify to raise prices for second time this year (Bloomberg)

• Amazon cuts hundreds of sales and tech roles in AWS (CNBC)

• Ulta CEO warns beauty demand is slowing (CNBC)

GEOPOLITICS

• Biden and Xi Jinping held a candid call, discussing US-China relations (FT)

• US lawmakers pushing to restrict investment in Chinese companies due to strategic and security concerns (FT)

• NATO plans $100bn military aid package for Ukraine over five years to counter potential Trump presidency and give Ukraine more support (Politico)

• Russian generals could find success in upcoming offensive in Ukraine (Politico)

• US officials consider lifting Biden's LNG export pause to pass Ukraine aid package, seeking support from Republicans (Reuters)

ECONOMY

• US vehicle sales up 5% in 1Q24 but EV growth slowed on concerns over high prices, limited range and charging infrastructure (AP)

• US private payrolls beat expectations in March, led by new jobs in service-facing industries, pay gains for job-changers jumped 10% year-on-year (Yahoo Finance)

• US ISM services misses expectations (51.4% vs. 52.7 consensus), price sub-index hits lowest level since March 2020 (Bloomberg)

• China services activity expands amid stronger growth in new business, exports (Reuters)

• Japan services PMI hits seven month high, though cost pressures evident (Reuters)

Sectors to Watch: The Usual Suspects

I feel like I'm writing about the same sectors every day but I swear it's because they're ripping higher.

Copper cracks US$4.2/lb: Copper hasn't traded with a US$4.2 handle since February 2022. I haven't come across any new data/headlines besides better-than-expected China manufacturing PMI (Tuesday) and potential output cuts by the country's leading smelters (mid-March). The overnight move should drive a strong response from local copper names. One thing I've noticed in the past couple of weeks is the outperformance of embattled names like 29Metals (ASX: 29M) and Aeris Resources (ASX: AIS). These two miners have been absolutely smashed (down more than 60% in the last twelve months) on high costs, capital raisings and weather conditions. 29Metals sold off another 25% last week after suspending operations at its Capricorn mine due to an extreme weather event. Nevertheless, this beaten up state leaves them highly leveraged to rising copper prices.

Uranium kicks on: The Global X Uranium ETF rallied 3.2% overnight to a two month high. It's now less than 4% away from year-to-date highs. Uranium spot prices rose 2.9% overnight to US$90/lb, according to fuel brokers Evomarkets. Heavyweight names like Cameco and Kazatomprom rallied 4.5% and 5.6% respectively overnight. Let's see if local names like Paladin Energy (ASX: PDN), Boss Energy (ASX: BOE), Deep Yellow (ASX: DYL) and more can kick on.

Gold's record breaking streak: Gold is all the rage right now. The yellow metal is on an eight day win streak, running from US$2,160 all the way to US$2,300. The VanEck Gold Miners ETF rose 2.1% overnight. One of the things for investors to be weary about is that a higher overnight gold price doesn't always translate to higher gold equities. Take Wednesday's session for example. Our lead in was a 1.2% overnight rise in gold to US$2,278 but a number of names underperformed, notably Evolution (-0.5%), Northern Star (-1.15%) and Bellevue Gold (-2.3%).

Companies trading ex-dividend: 

• Thu 5 April: None

• Fri 6 April: None

• Mon 9 April: Brickworks (BKW) – $0.24

• Tue 10 April: None

• Wed 11 April: Cosol (COS) – $0.01, Duxton Water (D20) – $0.036

• Thu 12 April: Kogan (KGN) – $0.075 

Other ASX corporate actions today: 

• Dividends paid: Lycopodium (LYL) – $0.37, Lifestyle Communities (LIC) – $0.055, Generation Development Group (GDG) – $0.01, Bega Cheese (BGA) – $0.04, AMP (AMP) – $0.02, Servcorp (SRV) – $0.12, Supply Network (SNL) – $).23, Woodside (WDS) – $0.91, G8 Education (GEM) – $0.03, PeopleIN (PPE) – $0.03, South32 (S32) – $0.006, Coronado Global (CRN) – $0.005, Mader Group (MAD) – $0.038 

• Listing: Blinklab (BB1) at 12:00 pm 

Economic calendar (AEDT):

• 11:30 am: Australia Building Permits (Feb)

• 11:30 pm: Canada Balance of Trade (Feb)