Morning Wrap: ASX 200 to test record highs, S&P 500 and Nasdaq at all-time highs, Materials sector in focus

ASX 200 futures are up 27pts (+0.31%) as of 8:30 am AEST.

In a nutshell:

• S&P 500, Nasdaq and FTSE 100 all hit record highs overnight, powered by relatively broad-based gains

• The resources sector surged overnight on China property stimulus speculation

• Trump confirmed 50% copper tariff rollout on 1-Aug, hits Brazil with 50% tariff levy

Let's dive in.

S&P 500 SESSION CHART

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

OVERNIGHT MARKETS

• Major US benchmarks higher and finished near best levels, with the S&P 500 and Nasdaq both setting fresh all-time highs

• Another relatively quiet session on the headline front – trade headlines were a little heavy as Trump said 50% copper tariffs will go into effect on 1-Aug and hit Brazil with a 50% tariff rate, markets appear largely in waiting mode for next week’s catalyst (June CPI and start of Q2 earnings season)

• UK’s FTSE 100 hits second consecutive all-time high, up more than 9% year-to-date or the best annual performance so far in four years

• Nvidia closes above the US$4tn market cap level, the first ever listed company to do so 

• NY copper prices diverge from London as Trump's 50% tariffs set to weigh on global demand (FT)

• JPMorgan mulls cutting the weight of China and India in EM Bond Index (BBG)

• Oil prices fall ~2% after reports OPEC discussing a pause in further production increases from October (YF)

STOCKS

• Tesla expanding robotaxi service area in Austin, TX (CNBC)

• US Defense Department to become largest shareholder in rare-earth producer MP Materials, shares surge 50% (CNBC)

• Delta Air Lines restores full year guidance, shares surge on strong demand (FT)

• Nvidia's Huang will meet Chinese officials in Beijing, reaffirm commitment amid US-China tech tensions (BBG)

• TSMC's revenue climbs 39% in Q2, beating analyst expectations, driven by AI chip demand, plans to spend another $100bn for manufacturing expansion (BBG)

• Autodesk exploring acquisition of rival PTC, which has market value of $25bn (BBG)

• US utilities seek approval for 142% year-on-year increase in power rates for consumers amid rising electricity needs from AI data centers (FT)

• BMW reported a 0.4% increase in Q2 deliveries, driven by European demand despite a decline in China (RT)

CENTRAL BANKS

• JPMorgan CEO Dimon says markets under-pricing risk of higher US interest rates (YF)

• Fed's balance sheet drawdown likely can continue for some time, Waller says (RT)

• Mexico's central bank signals slower pace of rate cuts after last month's cut (BBG)

• Bank of Korea held rates as expected, with concerns over booming apartment prices in Seoul (BBG)

TARIFFS 

• Trump announced 50% tariff on Brazil as of 1-Aug, up from 10% levy on Liberation Day (FT)

• BofA analysts noted weaker Brazilian reais covers half of adjustment, while exports from Brazil including commodities can be rerouted to other markets (FT)

• Trump sends tariff letters to six more countries including Philippines, Moldova, Libya and Iraq (FT)

• Trump confirms 50% copper tariffs effective from 1-Aug (BBG)

• EU negotiates with the US for tariff relief to protect its auto industry from import duties (RT)

• US apparel imports from China fall to 22-year low in May (RT)

• Malaysia aims to finalise a tariff deal with the US before the 1-Aug deadline, focusing on key sectors (BBG)

ECONOMY

• Chinese property stocks surged on speculation of a high-level meeting to revive the struggling sector (BBG)

ASX TODAY

Check out our Live Blog for the latest coverage and analysis for company announcements, market movements and economic updates.

• Blackstone walks away from potential interest in KKR’s 60.5% stake in Pepper Money (The Aus)

• John Lyng Group enters into scheme implementation deed with PEP at $4.00 per share (JLG)

• Vulcan Energy completes $53.6m placement priced at $3.40 or a 15% discount to its last close, proceeds used for development of the Phase One Lionheart Project (VUL)

• TPG set to unleash massive capital return as Vocus sale set to return $4.7bn in net proceeds (AFR)

WHAT TO WATCH TODAY

• Rare earths: The US Defense Department will by $400m shares in MP Materials, which owns the only operational rare earth mine in the US. In my view, rare earth stocks are expensive (relative to current NdPr prices) but highly strategic assets. And this move showcases just how important they are. This could drive some positive flows into the sector, especially for a name like Lynas.

• Commodities: The Materials sector received a kick towards market close on Thursday after Chinese stocks rallied on speculation of property-related stimulus. This drove US-listed BHP shares up 3.8% overnight (up as much as 5.1% intraday), and a strong response for most of our overnight ETFs like Nickel, Steel and Copper.

BROKER MOVES

• Bannerman Resources initiated Overweight with $3.10 target (JPM)

• Netwealth Group downgraded to Neutral from Positive but target up to $33.40 from $31 (E&P)

Stocks trading ex-dividend: 

• Fri 11 Jul: Dominion Income Trust (DN1) – $0.613, Turners Automotive Group (TRA) – $0.083

• Mon 15 Jul: Metcash (MTS) – $0.095

• Tue 16 Jul: None

• Wed 17 Jul: WAM Global (WGB) – $0.04

• Thu 18 Jul: None

• Fri 19 Jul: None

Other ASX corporate actions today: 

• Dividends paid: PT Aneka Tambang (ATM) 

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 4:00 pm: UK GDP (May)

• 10:30 pm: Canada Unemployment Rate (Jun)