Morning Wrap: ASX 200 to rise, S&P 500 rallies as Apple shares surge, Gold back at record highs

ASX 200 futures are down 47pts (-0.52%) as of 8:57 am AEDT.

In a nutshell:

• Risk-on session with major US benchmarks all up more than 1% and within an arms reach of recent record highs

• Gold recovered last Friday’s selloff to close back at record highs

• Apple shares surge to all-time highs on strong iPhone 17 sales

• I'll be away for the rest of the day (so no live blog today)

Let's dive in.

S&P 500 SESSION CHART

S&P 500 gapped up, trended higher to close at best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks all up more than 1.0% and closed near best levels

• S&P 500 now trading back at last Thursday’s levels amid a step-down in US-China trade tensions

• Strong session for commodities, with gold at fresh all-time highs 

• Overall, a risk-on session as Trump reiterates confidence of getting a deal with China, White House adviser Hassett says end of shutdown in sight, regional banks found some reprieve and Q3 earnings season takeaways remain upbeat

• Traders hedging against stock market volatility as Trump and Xi prepare for meeting amid heightened trade tensions (BBG)

• Investors leaning towards defensives with utilities and healthcare leading S&P 500 (WSJ)

• Investors rapidly backing rare earth companies, spurred by Trump's efforts to reduce China's dominance (FT)

• French bonds fall after S&P downgrades credit rating, raising concerns over fiscal issues (BBG)

STOCKS

• Amazon's AWS faced widespread disruptions on Monday, affecting multiple platforms (BBG)

• Apple's iPhone 17 sales have surged, outperforming the iPhone 16 by 14%, especially in the US (BBG)

• Alibaba introduces a new computing pooling system said to lower number of Nvidia GPUs required by 82% (SCMP)

TARIFFS

• Trump expresses optimism over coming talks in South Korea with Chinese President Xi, says US and China will have a fair, great trade deal together but reiterated threat of additional 100% tariff on China to 155% if no deal is reached by 1 November (BBG)

• Trump views rare earths, fentanyl, and soybeans as key US-China issues ahead of talks (BBG)

• China's rare earths exports drops in September, raising concerns over its leverage in US trade talks (RT)

• China imported zero US soybeans in September, marking the first such occurrence since 2018 (RT)

CENTRAL BANKS

• BOJ chief Ueda seeks more data before the October meeting, amid global economic uncertainty (RT)

US GOVERNMENT SHUTDOWN

• Hassett says US shutdown likely to end sometime this week (CNBC)

ECONOMY

• China's GDP slows to a year-low in Q3, raising concerns over reliance on exports amid trade tensions (BBG)

• China's home prices fell sharply in September, fueling concerns as real estate investment dips (BBG)

• UK CPI inflation likely hit 4% in September, prompting caution on potential interest rate cuts (LT)

ASX TODAY

• Albanese to pitch Trump on US involvement in government's proposed $1.2bn critical minerals reserve, such as direct investment or provision of loans and other guarantees (Bloomberg)

• Albanese will also look to get US commitment on floor price for Australian critical minerals to ensure viability of new projects (AFR)

• Alcoa shares surge 8.3% overnight after US and Australia governments seek to advance its gallium plant (AAI)

• Yancoal reports Q3 attributable saleable coal production down 9% year-on-year to 9.3Mt, average realised coal price down 18% to A$140 a tonne, reaffirms FY production guidance of 35-39Mt but no comment on dividend (YAL)

WHAT TO WATCH TODAY

• Miners: A very strong overnight session for the resource sector, BHP ADRs up 2.1%, gold back at record highs and plenty of commodities bouncing from recent pullback (copper, palladium, iron ore etc, though some bounces were relatively lacklustre).

• Gold: Interesting juncture for gold, with prices back at record highs after a ~2% pullback. Gold miners have arguably run too hard and require more strength from gold prices to find new highs. VanEck Gold Miners ETF (GDX) up just 2.0% overnight and ~5% away from last Thursday's record high.

• Broad strength: A somewhat broad rally overnight, though some defensive pockets like Staples and Utilities still finished lower. Our overnight ETF watchlist showing some solid breadth, with various sub-sectors like Airlines (JETS), Fintech (FINX) and Biotech (XBI) up more than 2%.

BROKER MOVES

• Beach Energy upgraded to Neutral from Sell; target remains $1.05 (CITI)

• REA Group initiated Outperform with $270 target (RBC)

Stocks trading ex-dividend: 

• Tue 21 Oct: GQG Partners (GQG) – $0.04, WAM Alternative Assets (WMA) – $0.03

• Wed 22 Oct: None

• Thu 23 Oct: None

• Fri 24 Oct: None

Other ASX corporate actions today:       

• Dividends paid: Charter Hall Social Infrastructure (CQE), Energy One (EOL), Integrated Research (IRI), Kelsian (KLS)

• Earnings: Plenti (PLT) 

• IPOs: PC Gold (PC2) at 12:00 pm

• AGMs: Bendigo Bank (BEN), Cleanaway Waste (CWY), Meridian Energy (MEZ), Mystate (MYS), Region Group (RGN) 

Economic calendar (AEDT):

No major economic announcements.