Morning Wrap: ASX 200 to test all-time highs, S&P 500 extends gains, Gold takes off

US markets chugged higher on the back of growing expectations of a 50 bp Fed rate cut, the ECB cuts interest rates by 25 bps to 3.5% amid weak Eurozone growth, gold prices surge to a fresh all-time high of over US$2,550 an ounce, nickel stocks continued to trend higher overnight after Putin's remarks and the ASX to test all-time highs on Friday.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher, finished near best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks rallied and finished near best levels

• S&P 500 and Nasdaq both up for fourth-straight sessions, up 3.5% and 5.4% week-to-date respectively

• All US sectors finished higher but Tech was again the leader, extending yesterday’s upside on latest around of AI optimism (e.g. Microsoft says Gen AI-driven demand for infrastructure outpacing the ability to supply it)

• Today’s big story – Modest ramp up in 50 bp rate cut odds (28% vs. 14% a day ago), market still pricing in over 100 bps of easing by end of January 2025

• Market positioning – AAII bullish sentiment slipped to 39.8% for week ended 12 Sep, the lowest since early June while Deutsche Bank says positioning now tilted towards defensives 

• Growth in inverse ETF volumes may indicate rising market angst (BBG)

• Chinese stocks slump to the lowest since January 2019, as doubts grow over recovery in earnings and economy (BBG)

• Softening China demand weighing on crude with imports down 3.1% year-on-year in first eight months of 2024 (BBG)

• Iron ore dropping to lowest in nearly two years seen as drain on profits for some of the world's biggest miners (WSJ)

STOCKS

• Microsoft to cut 650 jobs at Xbox unit in effort to reduce redundancies (CNBC)

• Large companies see big increase in debt payments, even if Fed cuts rates (BBG)

• Berkshire Hathaway Vice Chair Jain sells US$139m of shares, more than half his stake (FT)

• Amazon to spend additional US$2.1bn on contract delivery driver pay and training in effort to lessen strike risk (BBG)

• OpenAI in talks to raise US$6.5bn at a valuation of US$150bn, significantly more than US$86bn valuation from tender offer (BBG)

CENTRAL BANKS

• ECB cut rates by 25 bps, in-line with market expectations and flagged further moderation in policy restriction going forward (RT)

• China poised to cut st rates on more than $5tn of outstanding mortgages (BBG)

ECONOMY

• US August PPI up 0.2% month-on-month, in-line with consensus while core PPI up 0.3% vs. 0.2% consensus, the bulk of August’s rise was attributed to a 0.4% increase in prices for services (BBG)

• Japan wholesale inflation falls more than expected amid August yen rebound (RT)

• Sweden CPI comes in cooler than expected, down to 1.2% in August (BBG)

ASX TODAY

• Healius diagnostic imaging unit set to receive final offers from TPG, PEP (The Aus)

• Payments company Cuscal understood to be gearing up for a formal roadshow next week as part of revived efforts for an IPO (The Aus)

• Star Entertainment does not know how, when or where it will get the additional funds it needs (The Aus)

WHAT TO WATCH TODAY

• Gold: Bullion prices rallied almost 2% overnight to a record high of US$2,560 an ounce. This drew a strong response for the VanEck Gold Miners ETF, which opened 1.8% higher and finished the overnight session up 4.8%. Expect a large gap up for most local gold names. Keep an eye out for those with heavy short interest (e.g. Genesis Minerals 6.98%, Bellevue Gold 5.78%) as well as the performance of various sub-themes (e.g. Spartan Resources (major discoveries), West African Resources and Resolute (undervalued but sovereign risk) etc.

• Nickel: Putin said on Wednesday that Moscow should consider limiting exports on uranium, titanium and nickel in retaliation for Western sanctions. Sprott's Nickel Miners ETF rallied 3.5% yesterday and gained another 5.6% overnight. Putin's remarks seem to have a more persistent upward effect on nickel prices/equities. Let's see if names like Nickel Industries continue to kick on.

BROKER MOVES

• Carnarvon Energy upgraded to Overweight; target up to $0.21 from $0.19 (JPM)

• IGO upgraded to Neutral from Underperform; target remains $5.60 (BofA)

Stocks trading ex-dividend: 

• Fri 13 Sep: Grange Resources (GRR) – $0.005, Ramelius Resources (RMS) – $0.05, FFI Holdings (FFI) – $0.125, Lovisa (LOV) – $0.37, Kelsian (KLS) – $0.095, Ariadne (ARA) – $0.005, Car Group (CAR) – $0.385, SKS Technologies (SKS) – $0.01, Data#3 (DTL) – $0.129, Cleanaway (CWY) – $0.025

• Mon 16 Sep: Echelon Resources (ECH) – $0.013, Saunders International (SND) – $0.022, Credit Corp (CCP) – $0.23, QUBE Holdings (QUB) – $0.052

• Tue 17 Sep: Base Resources (BSE) – $0.065, Duratec (DUR) – $0.025, Wotso Property (WOT) – $0.01, Cochlear (COH) – $2.10, Maas Group (MGH) – $0.035

• Wed 18 Sep: Flight Centre (FLT) – $0.30, Adrad (AHL) – $).016, Sports Entertainment Group (SEG) – $0.02, Supply Network (SNL) – $0.33, Service Stream (SSM) – $0.025, Auckland International Airport (AIA) – $0.059  

• Thu 19 Sep: Mader (MAD) – $0.04, Auswide Bank (ABA) – $0.11, Embelton (EMB) – $0.20, Tourism Holdings (THL) – $0.046, Midway (MWY) – $0.161, South32 (S32) – $0.046, Motorcycle Holdings (MTO) – $0.07, IPD Group (IPG) – $0.062, Count (CUP) – $).022, Enero Group (EGG) – $0.02, NRW Holdings (NWH) – $0.09, Lycopodium (LYL) – $0.40

Other ASX corporate actions today: 

• Dividends paid: REA Group (REA), Acumentis (ACU) Step One Clothing (STP)

• Listing: None  

• AGMs: Metcash (MTS)

Economic calendar (AEST):

No major economic announcements.