Morning Wrap: ASX to open softer despite Wall Street’s tech-led grind higher; Nvidia target lifted

ASX 200 futures are down 5pts (-0.04%) as of 8:30 am AEDT.

The divergence in U.S. equity markets continued overnight, with the value-heavy Dow Jones edging lower while the Magnificent Seven once again carried the S&P 500 and Nasdaq higher. The dominance of mega-cap technology shows no sign of easing, as investors continue to crowd into the sector’s biggest names.

Nvidia surged 2.17% after Loop Capital Markets lifted its price target to a Street-high US$350 (from US$250), implying ~70% upside from its last close of US$206.88 and a potential market cap north of US$8.5 trillion.

Palantir also blew Wall Street’s socks off, delivering stronger-than-expected quarterly earnings and upbeat guidance. Amazon jumped 4% after its AWS division inked a massive US$38 billion deal with OpenAI for Nvidia chips.

Closer to home, Australian-founded but U.S.-listed Iren rocketed more than 11% after securing a US$14.8 billion Microsoft deal for AI cloud services.

Locally, the RBA takes centre stage today.

Enjoy the Melbourne Cup!

S&P 500 SESSION CHART

S&P 500 higher thanks to tech (Source: TradingView)

OVERNIGHT MARKETS

• Market breadth negative for the fourth day of the past five; equal-weight S&P lagged the cap-weighted index by ~40 bp. Big tech mostly stronger again with AMZN the standout.

• Treasuries little changed to a touch weaker, off worst levels; yields up ~1 bp at long end.

• Dollar index up 0.1%.

• Gold finished up 0.4%.

• Bitcoin futures down 3%.

• WTI crude finished up 0.4% in choppy trading following widely expected OPEC+ production update.

• October ISM manufacturing missed, with production index falling into contraction territory.

STOCKS

• OpenAI signs deal to buy US$38 billion worth of capacity from Amazon Web Services (CNBC)

• Microsoft signs US$9.7 Billion AI cloud deal with Australian data centre firm IREN (Bloomberg)

• Warren Buffett’s Berkshire Hathaway may have quietly trimmed its massive Apple stake again (CNBC)

• Ford, Hyundai report large declines in October EV sales after end of federal credits (CNBC)

• Pfizer files second lawsuit against Novo Nordisk, Metsera in bidding war over obesity biotech (CNBC)

• Kimberly-Clark to buy Kenvue for $48.7B in cash and stock deal (FT)

• Walmart says AI is going to change every one of its jobs in some way (Axios)

• AstraZeneca wins shareholder vote in favor of listing directly on NYSE (FT)

TARIFFS

• Trump decided against discussing Nvidia's advanced AI chip in Xi meeting after WH officials warned of national security threat (link)

• Goldman Sachs says tariffs will add US$28 billion to holiday spending this year (Quartz)

• Trump says he will not attend oral arguments at the Supreme Court on Wednesday for the tariff case (CNBC)

CENTRAL BANKS

• RBA Monetary Policy Statement released at 2:30 pm AEDT (RBA)

• Fed Governor Lisa Cook, in first policy speech since Trump suit, says she’s undecided on Dec. rate cut (CNBC)

• BoE expected to pause aggressive rate cuts (Reuters, Bloomberg)

ECONOMY, MACRO AND GEOPOLITICS

• Trump administration to tap into billions of dollars in contingency funds to pay 50% of the normal amount of food stamp benefits (CNBC)

• UK debt surges fastest among rich nations, risking doom loop (Telegraph); UK business confidence plummets ahead of budget tax fears (Telegraph)

• Beijing suspends implementation of additional export controls on rare earth metals (Bloomberg)

• Japan PM says there are no plans to renegotiate $550B US investment package (Reuters)

ASX TODAY

• No notable announcements or news from significant ASX companies this morning. The direction of the ASX may be impacted by the RBA's decision in the afternoon.

WHAT TO WATCH TODAY

• Not a whole lot, other than the RBA meeting. A hold is widely expected, but with central banks grappling with the twin challenges of sticky inflation and softening labour markets, investors will be watching Governor Bullock’s commentary closely for clues on the policy outlook.

BROKER MOVES

• Wagners Holding upgraded to Accumulate from Hold; target up to $3.10 from $2.90 (BP)

Stocks trading ex-dividend: 

• Tue 4 Nov: Wam Leaders Ltd (WLE) – $0.047

• Wed 5 Nov: Naos Ex-50 Opportunities Company Ltd (NAC) – $0.015, Naos Small Cap Opportunities Company Ltd (NSC) – $0.013

• Thu 6 Nov: Wam Global Ltd (WGB) – $0.065

Other ASX corporate actions today:       

• Dividends paid: Alliance Aviation Services (AQZ), Harvey Norman (HVN), Mantle Minerals (MTL)  

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

• 2:30 pm: RBA Monetary Policy Decision

• 2:30 pm: RBA Monetary Policy Statement