Morning Wrap: ASX 200 to soar, S&P 500 close at record highs + ANZ and Block earnings

Global markets continued to climb higher overnight following 25 bp rate cuts from both the Federal Reserve and Bank of England, Trump's victory attracted substantial US ETF inflows (~16 times daily average), commodities including copper and aluminium bounced strongly overnight, Block shares set to tumble on poor 2025 earnings outlook commentary and ANZ reports a mixed FY24 result.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 trended higher to finish at best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished higher and bear best levels

• S&P 500 and Nasdaq both set fresh record highs (49th of the year for the S&P)

• Market's path of least resistance still seen as higher on myriad of factors including unwinding election hedges, volatility reset, favourable seasonality, corporate buyback resumption, shift to bumper Q4 earnings expectations and global rate cut cycle

• Goldman highlights big risks to best ever post-US election stock market rally (YH)

• ETF inflows on Thu hit US$18bn or 16 times the daily avg inflow this year (BBG)

• Bond investors cautious on Trump win, saying euphoria could be short-lived if his policies drive up inflation (FT)

• US dollar bulls embolden by Trump victory as they brace for tariffs (RT)

• Collapse in volatility forces systematic funds to pile back into stocks, creating feedback loop (BBG)

• Chinese regulators tell banks to cut interbank deposit rates to free up funds to boost the economy, sources say (BBG)

STOCKS

• Trump's win and likelihood of deregulatory drive to encourage firms to list as soon as 2025 (BBG)

• US banks to gain from looser capital, merger policies under Trump (RT)

• Musk's backing of Trump gives him extraordinary influence to help his companies secure favorable government treatment (Reuters)

• Earnings from Qualcomm, Arm offer mixed signals on demand for smartphones (BBG)

• Big Tech CEOs applaud Trump win, hope for more permissive attitude on deals, antitrust and AI in next administration (AX)

• Automakers brace for new Trump tariffs and changes to EV regulations (RT)

• US borrowers in danger of defaulting a second time on commercial property loans at highest level in a decade (FT)

CENTRAL BANKS

• Fed cuts rates by 25 bps, notes job market easing and solid economic growth (RT)

• Bank of England cuts by 25 bp but says can't cut too quickly or too much (FT)

• Swedish central bank trims rates by 50 bp, sees more cuts ahead (BBG)

• Norway keeps policy on pause and signals no rush on easing (BBG)

• RBA warns of adverse effects on Australia from Trump tariffs (BBG)

US ELECTION

• Trump won the "economy is everything" election as voters expressed anger over prices (WSJ)

• Trump team launches into transition mode advisers begin process of vetting candidates (WP)

• Tax and spending cuts, border wall funding, regulatory rollback among priorities of incoming GOP Congress (RT)

• Trump expected to move quickly and "ruthlessly" in threats to implement steep tariffs as soon as he takes office (FT)

• Trump administration expected to dismantle ESG regulations for corporations (BBG)

ECONOMY

• China exports rise by most since Jul-2022, offsetting domestic demand weakness (FT)

• US initial jobless claims rise marginally, in-line with market expectations but Q3 unit labor costs up 1.9% QoQ vs. 0.9% consensus, stirring inflation fears (RT)

• Asian economies brace for Trump tariff fallout (FT)

• German exports and industrial output fall more than expected with economists warning crisis in industry (RT)

• Japan real wage declines narrow, base pay strongest in 31 years (RT)

ASX TODAY

• ANZ reported a mixed (slightly negative) FY24 result, with cash profit down 8% to $6.72bn vs $6.86bn consensus, proposed final dividend of 83 cents (in-line with Citi estimates) and net interest margin of 1.57% (ANZ)

• Block reported a solid Q3 result but provided a downbeat 2025 outlook in terms of operating income – “Although we expect the pace of expansion to be less than this past year as we invest in growth opportunities” – US-listed Block shares are down 9.9% in after hours (SQ2) 

• Bowen Coking Coal holder Regal Funds Management discloses 13.8% stake (BCB)

• Mayne Pharma testing the waters on potential buyer interest, with Jefferies now drumming up interest and ‘quietly marketing’ the company (AFR) 

WHAT TO WATCH TODAY

• BNPL – Visa announced several new products overnight including ‘Visa Flexible Credential, which allows consumers to easily set parameters or choose whether they use debt, credit, pay-in-four etc. This weighed on US-listed BNPL names like Block (-3.0%) and Affirm (-2.8%)

• Resources: The resource sector has largely reserved the Trump-related selloff on Wednesday (e.g. Copper fell 5.1% but bounced 4.5% overnight). US-listed BHP and Rio Tinto shares both finished the session 3.2% higher. Most of our resource-related overnight ETF finished higher, led by Copper Miners (+5.9%), Uranium (+3.9%) and Strategic Metals (+2.5%).

BROKER MOVES

• Domain Holdings downgraded to Neutral from Buy; target cut to $3.20 from $3.65 (DHG)

• Goodman Group upgraded to Neutral from Sell; target up to $38.45 from $35.21 (UBS)

Stocks trading ex-dividend: 

• Fri 8 Nov: Acorn Capital Investment Fund (ACQ) – 3.20%

• Mon 11 Nov: Champion Iron (CIA) – 1.79%, Macquarie Group (MQG) – 1.13%, Naos Ex-50 Opportunities Company (NAC) – 3.09%, Naos Small Cap Opportunities Company (NSC) – 2.63%

• Tue 12 Nov: GQG Partners (GQG) – 1.37%

• Wed 13 Nov: None

Other ASX corporate actions today: 

• Dividends paid: Soul Patts (SOL)

• Listing: None

• Earnings: ANZ Group (ANZ)

• AGMs: Jumbo Interactive (JIN)

Economic calendar (AEDT):

• 11:30 am: Canada Unemployment Rate (Oct)

• 1:00 am: US Consumer Sentiment (Nov)