Morning Wrap: ASX 200 to rise, S&P 500 rallies on blowout jobs data, Lithium stocks surge

ASX 200 futures are trading 26 points higher, up 0.31%, as of 8:30 am AEDT.

The S&P 500 and Nasdaq finished the week on a positive note and logged a fourth straight week of gains, US nonfarm payrolls smash analyst expectations and reiterate that the jobs market is in a good place, lithium stocks soared on news that Rio Tinto is looking to acquire Arcadium Lithium and expect a dull session as most of the country is off for Labour Day.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 lower, finished off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• US benchmarks finished higher and near best levels

• S&P 500 and Nasdaq finished narrowly higher for the week, marking a fourth consecutive week of gains

• US weekly recap – S&P 500 +0.22%, Nasdaq +0.10%, Dow +0.09%, Russell (-0.54%)

• Today’s big story – US September nonfarm payrolls almost doubled consensus expectations, sending bond yields sharply higher

• US 10 year-yield up 12 bps, a fresh two-month high and settled just shy of the key 4.0% level

• Brent crude eked out a small gain, finishing the week 8.4% higher, marking its best week since March 2023

• Middle East tensions remain in play, with the market expecting some form of response from Israel after Iran’s missile attack last week

• Q3 earnings season may be the largest factor in whether the equity-market rally can continue (BBG)

• China's stock rally may prove to be false dawn, recalling memories of 2015 bust (BBG)

• Strategists remain sceptical of China's equity prospects (BBG)

• Rally in US-listed China shares driven more by fresh buying than short covering (BBG)

STOCKS

• Volkswagen CEO Blume bracing for retaliatory tariffs from China (BBG)

• Taiwan's Foxconn tops estimates to post highest-ever revenue for the third quarter amid strong demand for AI servers (RT)

• Cisco to invest in AI cloud-computer provider CoreWeave, part of transaction valuing company at US$23bn (Bloomberg)

• Apollo nearing deal to acquire aerospace parts maker Barnes Group for more than $45 a share (Reuters)

CENTRAL BANKS

• Hot September US jobs data sparking widespread second-guessing of Fed's recent cut (CNN)

• BOJ's pursuit of rate hikes faces challenge as politics and yen outlook complicate the policy outlook (RT)

• BoE chief economist Pill warns against cutting rates too fast (RT)

• ECB's Centeno says Eurozone inflation now very near to central bank's 2% target (BBG)

POLITICS & GEOPOLITICS

• Israel launches multiple airstrikes in Beirut (FT)

• G7 to warn dangerous cycle of attacks risks fueling uncontrollable escalation in the Middle East (BBG)

• European Union greenlights imposing tariffs on Chinese EVs in a move set to increase trade tensions with Beijing (BBG)

ECONOMY

• US September nonfarm payrolls grew 254,000 month-on-month vs. ~145,000 consensus, the largest beat in six months and unemployment rate down to 4.1% (from 4.0%) with no material impact from Hurricane Francine (RT)

• US dockworkers agree to suspend strike until 15-Jan (BBG)

ASX TODAY

• Arcadium Lithium in talks with Rio Tinto about a potential buyout, valuing the lithium miner at US$4-6bn or higher, Arcadium shares up 35% after hours (RT) 

• Arcadium Lithium shareholder Blackwattle Investment Partners’ urged the company to reject any bid that doesn’t sit around the US$8bn mark (AFR)

• Bowen Coking Coal believed to have secured at least $30m as part of a $70m raise to revive the business (The Aus)

• IPH 15.6m share block trade crosses at $5.40, representing 5.8% of the company

• SiteMinder holder First Sentier Investors decreases holding to 7.95% from 12.02% (SDR)

WHAT TO WATCH TODAY

• Low volumes: NSW, ACT, Queensland and South Australia are off for Labour Day, which might result in subdued volumes and stocks just chopping sideways after market open

• Lithium: Lithium stocks jumped on Rio Tinto's US$5.8bn bid for Arcadium Lithium. While the sector remains a shell of its former self, the bid does offer a valuation floor for the sector. This should see some positive flow for local names, most of which have pullback back over the past two sessions

• Food for thought – Good news is good news: Lots of solid US economic data in recent days (blowout nonfarm payrolls, four-week moving average initial claims down to lowest since May and ISM services hit a 19-month high). Historic market performance after catalysts such as a Fed cut, a major geopolitical event etc. – All hinges on the state of the economy. In previous Fed rate cut cycles, the S&P 500's median 12-month return after the first cut was 10%. But if the US economy entered a recession, median performance falls to -15%

BROKER MOVES

We have not received any major broker updates.

Stocks trading ex-dividend: 

• Mon 7 Oct: Ridley Corporation (RIC) – 1.82%

• Tue 8 Oct: Clime Capital (CAM) – 1.65%, Katana Capital (KAT) – 0.42%, MFF Capital Investments (MFF) – 1.83%, Perenti (PRN) – 3.85%, Reece (REH) – 0.65%

• Wed 9 Oct: Naos Emerging Opportunities (NCC) – 4.65%

• Thu 10 Oct:  Duxton Water (D2O) – 2.65%, WAM Active (WAA) – 3.43%

• Fri 11 Oct: Turners Automotive Group (TRA) – 1.28%, WAM Research (WAX) – 4.18%

Other ASX corporate actions today: 

• Dividends paid: Austin Engineering (ANG), Atlas Arteria (ALX), Cleanaway Waste Management (CWY), Generation Development Group (GDG), Ventia Services Group (VNT)

• Listing: None

• AGMs: None

Economic calendar (AEST):

No major economic announcements.