Morning Wrap: ASX 200 to rise + US stocks hit 9-month high on debt ceiling optimism

S&P 500 and Nasdaq close near highest levels since August on optimism over the debt ceiling bill, VIX marks its lowest close in 18 months, oil prices bounce but traders on alert for OPEC+ meeting on Sunday, a data dump of economic figures from major economies and Charts of the Week.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 trends higher and closes near session highs (Source: TradingView)

MARKETS

• S&P 500 higher and closed near best levels

• 10 largest S&P 500 stocks rose 8.9% in May while the other 490 fell 4.3%

• VIX at 15.64 or the lowest close in 18 months

• Oil rallies on US debt ceiling progress (Reuters)

• US dollar stumbles as signs point to Fed skipping June rate hike (Reuters)

• Fed officials signal support for rate pause in June but retaining option to hike again in coming months (Bloomberg)

STOCKS

• Meta (+3.0%) reveals latest VR device ahead of Apple's launch (FT)

• Microsoft (+1.3%) to spend billions over the next few years on cloud infrastructure startup CoreWeave (CNBC)

• CrowdStrike (-1.6%) results flag slowing revenue growth

• Lucid (-16.2%) said it plans to raise US$3bn plus US$1.8bn more via private placement with one of its largest shareholders

• Okta (-17.8%) lifted guidance but management flagged that “macroeconomic pressures are increasing”

• Dollar General (-20%) posts double miss, slashes full-year outlook

ECONOMY

• US manufacturing slumps further in May, employment picks up (Reuters)

• Eurozone inflation cools in May but won't stop ECB hike (Bloomberg)

• China's manufacturing PMI unexpectedly back to expansion (Reuters)

• Eurozone manufacturing downturn deepens in May (Reuters)

• UK manufacturing activity declines for third straight month (Reuters)

• Japan manufacturing expands for first time in seven months (Reuters)

• South Korean exports contract at slowest pace since October (Bloomberg)

• Bank of America says US consumer remains very healthy (Reuters)

• US House of Representatives passes debt ceiling legislation (Reuters)

Deeper Dive: Charts of the Week

This segment of the morning wrap brings you weekly technical commentary on the ASX 200 and some of the more interesting charts in the market. These are not meant as recommendations. They are for illustrative purposes only. Any discussion of past performance is for educational purposes only. Past performance is not a reliable indicator of future return. Always do your own research.

ASX 200 – No man’s land

ASX 200 chart (Source: Commsec)

Once again, there really hasn’t been a lot happening on the ASX, from a technical perspective at least, since the last update. We saw a pretty big selloff a couple of sessions ago and that may end up being the catalyst for a more significant move lower, but at this stage it remains to be seen. I’ve highlighted a wedge pattern on the chart, showing the narrowing of the trading range over time, which is symptomatic of a market that can’t make up its mind. So, we remain in no man’s land at the index level, waiting for both a sentiment change and a technical break in order to figure out what we do next.

Boral (BLD) – Building nicely

Boral chart (Source: Commsec)

Since January BLD has rallied from around $3 to $4, making for one of the better-looking charts on the ASX. Right now, the price action is consolidating around the $4 round number, just as it did around $3 and, to a lesser extent, $3.50. Ultimately the bulls ended up driving the stock price higher off those levels and one might expect them to do the same in this instance. Keep an eye out for a big buying day, on increased volumes, as a trigger to start a new leg higher.

Carsales.com (CAR) – Driving higher

Boral chart (Source: Commsec)

Whilst the Carsales price action hasn’t been particularly explosive, and has been grinding higher, with more and more traders willing to bid up the lows. That is evidenced by the ever-shallower pullback seen through the run from September last year, highlighted by the uptrend support line. There is now clear resistance at $24 and an ascending triangle has formed. If the bulls can overcome $24, it could lead to a sharp move higher.

ASX corporate actions occurring today:

• Trading ex-div: None

• Dividends paid: Evolution Mining (EVN) – $0.02 

• Listing: None

Economic calendar (AEST):

• 10:30 am: Australia Home Loans

• 10:30 pm: US Unemployment Rate