Morning Wrap: ASX 200 to tumble, S&P 500 now negative YTD, Oil prices spike to highest since 2023

ASX 200 futures are down 156 pts (-1.79%) as of 8:30 am AEDT.

In a nutshell:

• Get ready for another heavy session as the Iran conflict continues to escalate, sparking renewed inflation concerns and broad risk-off sentiment

• Major US benchmarks logged sharp weekly declines after WTI spiked ~35% last week, the largest weekly increase since the pandemic

• US and Israel continue to strike Iran, Trump demands the "unconditional surrender" from Iran, Iran strikes key Middle East desalination plants, Strait of Hormuz traffic remains near zero

Let's dive in.

Overnight Summary

Mon 09 Mar 26, 8:26am (AEST)

Name	Value	% Chg
Major Indices
S&P 500	6,740	-1.33%
Dow Jones	47,502	-0.94%
NASDAQ Comp	22,388	-1.59%
Russell 2000	2,525	-2.33%
Country Indices
Canada	33,084	-1.57%
China	4,124	+0.38%
Germany	23,591	-0.94%
Hong Kong	25,757	+1.72%
India	78,919	-1.37%
Japan	55,621	+0.62%
United Kingdom	10,285	-1.24%

Name	Value	% Chg
Commodities (USD)
Gold	5,158.89	+1.47%
Copper	5.76	+0.07%
WTI Oil	90.9	+12.21%
Currency
AUD/USD	0.6985	-0.65%
Cryptocurrency
Bitcoin (USD)	67,233	-0.20%
Ethereum (AUD)	2,806	-0.27%
Miscellaneous
US 10 Yr T-bond	4.133	-0.31%
VIX	29.49	+24.17%

S&P 500 SESSION CHART

S&P 500 lower, finished near worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks lower, closed near worst levels

• US weekly recap: Nasdaq (-1.24%), S&P 500 (-2.02%), Dow (-3.01%), Russell 2000 (-4.07%)

• WTI crude soars 15.7% to US$91, highest since Sep-23

• Oil prices sharply higher as Qatar warned that all Gulf producers may have to curtail production amid effective Strait of Hormuz closure

• Vertiv, Lumentum, Coherent, EchoStar to join S&P 500 on 23-Mar, replacing Match, Molina Healthcare, Lamb Weston, Paycom (BBG)

• Traders pile into energy, commodity options, while implied volatility jumps to rarely seen levels (BBG)

ENERGY

• US oil futures surge above US$92 a barrel as the war in Iran upends critical energy market flows (BBG)

• Oil traders predict crude prices could hit US$100 in days unless there is some de-escalation of hostilities (BBG)

• Oil options are signaling shock from latest Middle East conflict may be short-lived (RT)

• Kuwait Petroleum declares force majeure and cuts crude oil output, level not announced (RT)

• Second bulk carrier that signals it is Chinese-owned sails through Strait of Hormuz (BBG)

• US gasoline prices up 11% week-on-week as of Friday, seasonal factors adding further pressure (RT)

• Iraq oil output plummets 60% to 1.7-1.8mbpd, down from 4.3mpd before Iran conflict (BBG)

• Analysts say no ceiling to oil prices in short-term given output declines, infrastructure risks and Strait of Hormuz risks (BBG)

• Iran conflict disrupting a ~20% of global crude and natural gas supply, could take months to recover (RT)

• US Development Finance Corporation to create $20bn reinsurance facility for Gulf shipping (FT)

• India's largest private refiner reportedly pivoting back to Russian oil with US waiver (OP)

• Strait of Hormuz maritime traffic nearly halted with no oil shipments in past 24 hours (BBG)

• Oil heads for steepest weekly gain since Russia 2022 Ukraine invasion despite Friday dip (RT)

STOCKS

• Samsung open to strategic cooperation with more AI groups to erode Apple's smartphone lead (FT)

• Kalshi and Polymarket each seeking valuations of around $20bn, nearly double levels a year ago (WSJ)

• Saudi Aramco shares surge by most in nearly three years as supply disruptions send oil prices higher (BBG)

• SK Battery America lays off 958 employees, or 37% of headcount, at Georgia plant (BBG)

• Anthropic CEO Amodei vows court challenge over AI usage restrictions, downplays business impact (CNBC)

• Microsoft to retain Anthropic AI in products for non-Defense clients despite Pentagon supply chain risk label (CNBC)

• Marvell forecasts strong fiscal 2028 revenue from AI data centre boom shares surge 15% (RT)

• Costco quarterly profit beats expectations driven by membership fees and market share gains (BBG)

• Gap forecasts annual profit below estimates due to tariffs and picky consumer spending (RT)

TARIFFS

• Companies scrambling to accelerate shipments, ramp up production, rethink pricing strategies in wake of SCOTUS ruling on tariffs (WSJ)

• Trump tariff refunds could total up to $182bn after Supreme Court ruling (RT)

CENTRAL BANKS

• Investors trim rate cut odds, economists warn stagflationary trends complicate Fed rate path (FT)

• BoE faces risk oil price shock, rekindles inflation expectations that fuel wage demands (BBG)

• ECB efforts to project calm over war, inflation tested as market prices in rate hike this year (BBG)

IRAN

• Trump says no deal with Iran to end war without 'unconditional surrender' (CNBC)

• Secretary Rubio told Arab officials yesterday that the war is expected to last several more weeks (AX)

• Iran war is costing US over $900m per day with air assets the biggest cost driver (CNN)

• US intelligence suggests China may be preparing to provide Iran with financial assistance (CNN)

• US-Israel conducted more strikes per day in Iran than in any other bombing campaign in recent history (AP)

• Lockheed Martin and Boeing among defense companies meeting with Trump administration (FOX)

• Trump wants full removal of Iran leadership, has names in mind for good leader and threatens government shutdown over election bill (NBC)

ECONOMY

• US retail sales down 0.2% month-on-month vs. ests for a 0.3% decline, retail sales ex-autos in-line with flat expectations (BBG)

• US nonfarm payrolls unexpectedly down 92,000 vs. ests for a 60,000 gain, unemployment ticked up to 4.4% vs. 4.3% ests (BBG)

• Eurozone Q4 GDP revised down to 0.2% with trade drag consumption drives growth amid Iran war uncertainties (BBG)

ASX TODAY

• S&P/ASX 200 rebalance (additions) – Predictive Discovery (PDI), SRG Global (SRG) and Vulcan Energy (VUL)

• S&P/ASX 200 rebalance (removals) – Catapult Sports (CAT), DigiCo Infrastructure (DGT), EBOS Group (EBO)

• Pro Medicus signs two 5-year contract renewals with combined minimum value of $40m (PME)

• Rio Tinto pauses sale of titanium assets, Iran conflict makes it impossible to sell the business to Chinese groups (The Aus)

WHAT TO WATCH TODAY

• Oil up, stocks not so much: Massive session for oil prices, with WTI crude up ~35%, marking the second largest weekly increase in the last 40 years (trailing only the pandemic bounce).However, energy stocks struggled for upside (S&P 500 Energy sector up just 0.1%), perhaps starting to trade on the coming demand destruction.

• Aluminium: Prices spiked 4.2% overnight to US$3,420, the highest since Apr-22. Gulf smelters account for ~23% of ex-China primary output. Similar to energy stocks, a key name like Alcoa (-1.2%) struggled for upside. 

• Tech: iShares Expanded Tech Software ETF gained another 0.4% overnight. It’s now up eight of the last nine sessions, up 14.3% to a one-month high. Seeing software names trade like safe havens was not on my bingo card. Massive session last Friday for local tech names, with SiteMinder, Wisetech, Pro Medicus and Catapult all up more than 9%.   

BROKER MOVES

• Woodside Energy Group downgraded to Underweight from Equal-weight; target remains $26 (MS)

Stocks trading ex-dividend: 

• Mon 9 Mar: Alcoa Corporation (AAI) – $0.098, GTN (GTN) – $0.01, Nine Entertainment (NEC) – $0.045, Ramsay Health Care (RHC) – $0.425, Red Hill Minerals (RHI) – $0.116

• Tue 10 Mar: Adairs (ADH) – $0.055, Big River Industries (BRI) – $0.02, COG Financial Services (COG) – $0.035, CSL (CSL) – $1.837, Dusk Group (DSK) – $0.04, Generation Development Group (GDG) – $0.01, Helia Group (HLI) – $0.83, Hitech Group Australia (HIT) – $0.045, Iress (IRE) – $0.13, Liberty Financial Group (LFG) – $0.075, Nido Education (NDO) – $0.022, PRL Global (PRG) – $0.02, Qantas Airways (QAN) – $0.198, Vault Minerals (VAU) – $0.07

• Wed 11 Mar: Bhagwan Marine (BWN) – $0.005, Brambles (BXB) – $0.327, Breville Group (BRG) – $0.19, Cleanaway Waste Management (CWY) – $0.034, CUE Energy Resources (CUE) – $0.003, Finbar Group (FRI) – $0.025, IMDEX (IMD) – $0.017, Ive Group (IGL) – $0.095, Kip McGrath Education Centres (KME) – $0.01, Naos Ex-50 Opportunities Company (NAC) – $0.016, Peet (PPC) – $0.065, Tasmea (TEA) – $0.06, Thorney Opportunities (TOP) – $0.011, Vulcan Steel (VSL) – $0.021

Other ASX corporate actions today:       

• Dividends paid: GWA Group (GWA)

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

• 12:30 pm: China Inflation