Market Wraps

Morning Wrap: ASX 200 to snap three-day losing streak, US stocks slump on tech weakness

Fri 31 May 24, 8:30am (AEST)

ASX 200 futures are trading 50 points higher, up 0.65% as of 8:20 am AEST.

Major US benchmarks struggled after Microsoft, Nvidia and Alphabet sold off more than 2%. But luckily for the ASX, we're set to finish the week on a more positive note.

Let's dive in.

Overnight Summary

Fri 31 May 24, 8:21am (AEST)

Name Value % Chg
Major Indices
S&P 500 5,235 -0.60%
Dow Jones 38,111 -0.86%
NASDAQ Comp 16,737 -1.08%
Russell 2000 2,057 +1.00%
Country Indices
Canada 22,072 +0.79%
China 3,092 -0.62%
Germany 18,497 +0.13%
Hong Kong 18,230 -1.34%
India 73,886 -0.83%
Japan 38,054 -1.30%
United Kingdom 8,231 +0.59%
Name Value % Chg
Commodities (USD)
Gold 2,366.5 +1.08%
Iron Ore 117.62 -0.10%
Copper 4.6585 -2.77%
WTI Oil 77.91 -1.67%
Currency
AUD/USD 0.6633 +0.32%
Cryptocurrency
Bitcoin (AUD) 103,115 +1.16%
Ethereum (AUD) 5,652 -0.65%
Miscellaneous
US 10 Yr T-bond 4.554 -1.51%
VIX 14.47 +1.33%

US Sectors

Fri 31 May 24, 8:21am (AEST)

SECTOR % CHG
Real Estate +1.51%
Utilities +1.41%
Materials +0.83%
Industrials +0.70%
Financials +0.61%
Consumer Staples +0.26%
SECTOR % CHG
Energy +0.24%
Consumer Discretionary +0.18%
Health Care +0.07%
Communication Services -1.06%
Information Technology -2.45%

S&P 500 SESSION CHART

S&P 500 intraday
S&P 500 lower but off worst levels (Source: TradingView)

OVERNIGHT MARKETS

  • Major US benchmarks lower and finished around worst levels

  • Nasdaq and S&P 500 on track for weekly declines after five straight weeks of gains

  • Megacap tech was the notable drag on benchmarks, led by Nvidia (-3.7%), Microsoft (-3.3%), Alphabet (-2.1%) and Meta (-1.5%)

  • Tech under scrutiny after weaker-than-expected guidance from Salesforce, sparking concerns of AI competition

  • Russell 2000 outperformed – perhaps hedge funds are de-grossing their Russell 2000 shorts and Nasdaq longs

  • Bond yields take a breather after the recent bear steepening move that pushed the US 2-year yield to just under 5.0%

  • Today's 80-minute glitch in printing Dow, S&P index levels had little overall impact on trading (Bloomberg)

  • Record US market riding on questionable AI assumptions (Yahoo)

INTERNATIONAL STOCKS

  • Salesforce guides for record low sales growth (Bloomberg)

  • Nelson Peltz sells entire Disney stake after losing proxy battle (CNBC)

  • Amazon receives FAA regulatory approval for expansion in drone delivery service (CNBC)

  • BofA's Moynihan sees investment banking results on track, though net interest margins may be weaker than expected (Bloomberg)

CENTRAL BANKS

  • NY Fed President Williams expects inflation to resume moderating in the second half of 2024 (NY Fed)

GEOPOLITICS

  • Hamas says it is ready to reach agreement on ceasefire if Israel stops war (Reuters)

  • Russia announces tax hikes on corporates and citizens, expected to add extra US$30bn to state budget next year (Reuters)

  • EU set to delay decision on China EV tariffs (Reuters)

ECONOMY

  • US economy grew at a slower pace in the first quarter than initially reported reflecting softer consumer spending on goods (Bloomberg)

  • Spain inflation higher in May but disinflation expected to resume in summer (Bloomberg)

Industry ETFs

Fri 31 May 24, 8:21am (AEST)

Name Value % Chg
Commodities
Gold Miners 35.56 +1.05%
Steel 70.91 +0.85%
Lithium & Battery Tech 43.71 +0.81%
Uranium 32.07 -0.31%
Copper Miners 48.38 -0.72%
Strategic Metals 52.04 -0.86%
Silver 28.42 -2.57%
Industrials
Construction 70.14 +1.59%
Aerospace & Defense 133.79 +0.87%
Global Jets 19.61 +0.72%
Agriculture 25.32 -0.55%
Healthcare
Biotechnology 133.35 +0.63%
Name Value % Chg
Cryptocurrency
Bitcoin 27.87 +2.35%
Renewables
Solar 49.0 +2.94%
Hydrogen 6.65 +2.31%
CleanTech 10.03 +1.52%
Technology
Video Games/eSports 64.86 +0.71%
Sports Betting/Gaming 16.471 +0.68%
E-commerce 23.63 +0.51%
Electric Vehicles 24.65 +0.49%
FinTech 25.08 -0.12%
Semiconductor 235.93 -0.69%
Robotics & AI 30.74 -1.00%
Cloud Computing 19.43 -1.52%
Cybersecurity 27.95 -2.78%

Heads up – If you signed up to test the new Morning Wrap email – you will begin receiving these on Monday. It will replace the one that you usually receive. The testing period will last roughly two weeks.

ASX TODAY

  • ASX 200 set to bounce after falling to a four week low on Thursday

  • Nothing too interesting on the sector front – most commodity prices were a little weak overnight, megacap tech weakness could follow through for local names and bond yield breather could see some reprieve for yield-sensitive sectors

  • Food for thought – Qantas shares rallied 2.7% on Thursday after Goldman Sachs said the company had "structurally improved earnings capacity not reflect in valuation" and slapped on a buy rating with a $8.05 target price. This is interesting because a US peer like American Airlines trades at an even cheaper PE multiple ... and it just downgraded its earnings outlook

  • BHP confirms it will not make a firm offer for Anglo American after failing to convince its board (Reuters)

  • HMC Capital submits bid to acquire stake in Symphony Infrastructure Partners (AFR)

BROKER MOVES

  • Bega Cheese upgraded to Outperform from Underperform; target up to $4.65 from $4.0 (CLSA)

  • Lottery Corp upgraded to Add from Hold; target up to $5.60 from $5.40 (Morgans)

  • Pro Medicus upgraded to Hold from Sell; target up to $115 from $75 (Bell Potter)

  • West African Resources initiated Speculative Buy with $3.10 target (Argonaut)

Key Events

Companies trading ex-dividend: 

  • Fri 31 May: None

  • Mon 3 June: Newmont (NEM) – $0.268

  • Tue 4 June: None

  • Wed 5 June: Hancock & Gore (HNG) – $0.01, Infratil (IFT) – $0.017

  • Thu 6 June: None

Other ASX corporate actions today: 

  • Dividends paid: Acrow (ACF) – $0.02, Autosports Group (ASG) – $0.10, Kogan (KGN) – $0.075

  • Listing: None

Economic calendar (AEST):

  • 11:30 am: China Manufacturing PMI (May)

  • 11:30 am: China Services PMI (May)

  • 7:00 pm: Eurozone Inflation (May)

  • 10:00 pm: India GDP (Q1)

  • 10:30 pm: Canada GDP (Q1)

  • 10:30 pm: US Core PCE (Apr)

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

Get the latest news and insights direct to your inbox

Subscribe free