ASX 200 futures flat, Wall Street ekes out gains, commodity prices slump

ASX 200 futures are trading 4 points lower, down -0.05% as of 8:30 am AEST.

S&P 500 SESSION CHART

OVERNIGHT MARKETS

• Major US benchmarks ended mostly higher, closing near best levels
• Defensives, Big Tech and Staples outperformed while cyclicals like resources and energy led to the downside
• Russell 2000 underperformed massively, reflecting growth concerns and weakness in cyclical pockets of the market
• Bond yields continue to fall on weak US jobs data, the US 2-year is down 20 bps in the last five sessions and not far off a two-month low
• Every dollar allocated into the S&P 500 ETF, 27 cents goes into Apple, Amazon, Nvidia, Alphabet and Microsoft
• Big tech stocks hiding how scared investors are about the Fed keeping rates higher for longer (WSJ)
• Short interest in average S&P 500 stock hovering near lowest in more than two decades as bears retreat (Bloomberg)
• Morgan Stanley sees risks in being long dollar, underweight duration going into US election (Bloomberg)

INTERNATIONAL STOCKS

• Google to slash at least 100 jobs across cloud division (CNBC)
• Microsoft laying off hundreds at Azure cloud unit (Reuters)
• Tesla's China-made EV sales fall 6.6% y/y in May amid output cut (Reuters)
• Ford sees ~65% increases in May sales of EVs and hybrids (CNBC)
• Cisco announces plan to invest $1B in AI startups (Bloomberg)
• Maersk says global supply lines more impacted than previously expected by Red Sea disruption (Bloomberg)

CENTRAL BANKS

• ECB hawks and resilient data sow doubts over pace of rate cuts (Bloomberg)

GEOPOLITICS

• Netanyahu under pressure from right wing minister to reject US-backed ceasefire plan (Bloomberg)
• Japan PM Kishida will not call a snap election in Japan before current parliament session ends (Reuters)
• India's Modi wins election despite his party losing outright majority (CNBC)

ECONOMY

• US job openings fell more than expected in April, pushing the number of available jobs per job-seeker to the lowest in nearly three years (Reuters)
• German unemployment increased more than expected in May (Bloomberg)
• South Korean inflation falls by more than expected, keeping alive prospects of a central bank pivot (Bloomberg)
  
  

ASX TODAY

• ASX 200 set for a relatively flat open as a positive overnight lead and lower bond yields is offset by a drop in commodity prices
• Goldman Sachs' Commodities Index has marked its worst four-day stretch of the year, reflecting a sharp pullback for several soft and hard commodities
• Overnight commodity snapshot: Silver (-3.5%), Copper (-2.6%), Nickel (-2.5%), Aluminium (-1.9%), Brent Crude (-1.3%) and Gold (-0.9%)
• Several overnight commodity-related ETFs we track also sold off, including the Global X Copper Miners ETF (-4.8%), Sprott Nickel Miners ETF (-3.8%), VanEck Gold Miners ETF (-3.7%) and Global X Uranium ETF (-2.8%)
• Flight attendants union to launch legal action against Qantas regarding pay of indirectly employed cabin crew (The Aus)
• IPD Group CEO Michael Sainsbury discloses sale of 353,000 shares (IPG)
• Treasury Wine Estates reaffirms FY mid-to-high single digit EBITS (TWE)
• Woodside and Aramco in talks to invest in Tellurian’s Driftwood LNG Project (Bloomberg)
• Xero launches offering of $850m convertible notes (XRO)
• Xero block trade of $380m offered at 2.5% to 4.5% discount, related to delta hedging for the above convertible notes offering (AFR)

BROKER MOVES

• Cooper Energy upgraded to Buy from Speculative Buy; target up to $0.27 from $0.25 (Canaccord Genuity)
• Integral Diagnostics downgraded to Neutral from Positive; target remains $2.40 (E&P)
  
  

KEY EVENTS

• Wed 5 June: Qualitas Real Estate Income Fund (QRI) – $0.012, Hancock & Gore (HNG) – $0.01, Infratil (IFT) – $0.017
• Thu 6 June: None
• Fri 7 June: None
• Mon 10 June: None
• Tue 11 June: None

• Dividends paid: None
• Listing: None

• 9:00 am: Australia Industry Index (May)
• 11:30 am: Australia GDP (Q1)
• 11:45 pm: Bank of Canada Interest Rate Decision
• 12:00 am: US ISM Services PMI (May)

This Morning Wrap was written by Kerry Sun.