ASX 200 to rise, S&P 500 and Nasdaq close at record highs

ASX 200 futures are trading 42 points higher, up 0.54% as of 8:30 am AEST.

S&P 500 SESSION CHART

OVERNIGHT MARKETS

• S&P 500 and Nasdaq rallied, finished near best levels and at record highs
• Big tech extended recent outperformance, led by Nvidia (+5.1%), Meta (+3.8%), Microsoft (+1.9%) and Alphabet (+1.1%)
• Defensives like Utilities, Staples and Real Estate finished in red – The Equal Weight S&P 500 underperformed the official benchmark by 57 bps
• Tech earnings were a bright spot, with better-than-expected numbers from CrowdStrike and Hewlett Packard – both companies highlighted strong AI-related demand
• Commodities including oil, gold and copper bounced after Wednesday’s selloff
• Bond yields fell for a sixth straight session, with the US 2-year closing a two-month low
• Goldman Sachs expects "wall of money" into equities in early July (Bloomberg)
• Global investors have withdrawn a net US$40bn from ESG funds this year, including a record US$14bn in April (FT)
• ASML now second-biggest listed stock in Europe, overtaking LVMH (Bloomberg)
• Traders resuming Fed easing bets with futures pricing in rate cut by Nov (Bloomberg)
• FX strategists see dollar weakening over next 12 months (Reuters)

INTERNATIONAL STOCKS

• CrowdStrike shares jump as AI boosts cybersecurity demand (Reuters)
• Hewlett Packard Enterprise sees third-quarter revenue above estimates on robust AI demand (Reuters)
• Apollo Global to acquire 49% interest in Intel's Irish facility for US$11bn (Reuters)
• Tesla's institutional shareholders are giving up on the stock (Reuters)
• Nvidia overtakes Apple as the second most valuable company (Reuters)

CENTRAL BANKS

• Bank of Canada becomes first G7 central bank to cut and sees further cuts if inflation continues to ease (FT)
• RBA Governor Bullock says won't hesitate to hike again if inflation is sticky (Bloomberg)

GEOPOLITICS

• China AI chip companies skirting US sanctions by designing less powerful processors to retain access to TSMC's production (Reuters)
• Indian PM Modi forced into coalition talks as BJP loses majority in surprise result (FT)
• Israel steps up military offensive in Gaza amid renewed truce efforts (FT)
• US ready to back US$50bn loan to Ukraine provided EU extend sanctions against Russian state assets (FT)

ECONOMY

• US services PMI rebounds more than expected in May and back into growth (Reuters)
• China Caixin Services PMI marks fastest growth in ten months (Reuters)
• Eurozone composite PMI showed economy growing at fastest rate in a year (Reuters)
• UK PMI data showed services sector continued to support economic expansion (Reuters)
• Japan base wages rose by most since 1994 after March pay negotiations (Bloomberg)
• Japan service activity extends gains in May while price pressures persist (Reuters)
• Australian GDP weaker-than-expected, consumers spending more on essentials (Reuters)
  
  

ASX TODAY

• ASX 200 to open higher after a strong lead from Wall Street, lower bond yields and higher overnight commodity prices
• Copper and Gold Miner ETFs bounced overnight but still down 2-3% in the last two sessions – a local name like Sandfire sold off 5.6% on Wednesday, so let's see if it can recoup some of those losses
• S&P Biotech ETF rallied 3.2% overnight to a two-month high – the local biotech sector has been heating up and those with successful trials have been rewarded (thinking about LTP, BOT, CU6 even larger caps like TLX, PNV, PME)
• ASX 200 Financials Index is less than 1% away from all-time highs and CBA closed at a record high on Wednesday
• Australian Treasury introduces new consumer protection legislation for BNPL that will see operators regulated as consumer credit (Treasury Press Release)
• Baby Bunting holder HMC Capital discloses 12.3% stake, up from 10.3% (BBN)
• Hanwha continues work on bid for Austal (The Aus)
• MinRes sells 49% stake in Onslow Iron haul road to Morgan Stanley Infrastructure Partners for $1.3 billion (MIN)
• SRG Global awarded multi-year term contracts in the resource sector totalling $125 million (SRG)

BROKER MOVES

• Lovisa upgraded to Outperform from Neutral; target up to $33.70 from $26.90 (Macquarie)
  
  

KEY EVENTS

• Thu 6 June: None
• Fri 7 June: None
• Mon 10 June: None
• Tue 11 June: None
• Wed 12 June: Tower (TWR) – $0.024, ALS (ALQ) – $0.196

• Dividends paid: United Overseas Australia (UOS) – $0.02
• Listing: None

• 11:30 am: Australia Balance of Trade (Apr)
• 10:15 pm: ECB Interest Rate Decision
• 10:45 pm: ECB Press Conference

This Morning Wrap was written by Kerry Sun.