ASX 200 to rise, S&P 500 attempts to bounce, Gold soars despite rising yields

ASX 200 futures are trading 38 points higher, up 0.48% as of 8:30 am AEST.

S&P 500 SESSION CHART

MARKETS

• S&P 500 higher in Friday trading, led by tech and energy stocks
• Major US benchmarks lower for the week: Russell 2000 (-2.87%), Dow (-2.27%), S&P 500 (-0.95%) and Nasdaq (-0.80%)
• Bond yields snapped a three-day losing streak on Friday after better-than-expected nonfarm payrolls data, the US 10-year closed at the highest level since Nov-23
• Gold logged another record close and finished the week up 4.8%, marking its best week since October and pushing through US$2,300
• Copper prices finished near breakeven, up from session lows of -1.9% and logged a weekly gain of 5.7% to near two-year highs
• US CPI out on Thursday, consensus is looking for a 0.3% month-on-month increase in both headline and core inflation – which would push core CPI down 0.1 percentage points to 3.7% year-on-year
• S&P 500 earnings expected to increase for third straight quarter in Q1; big tech concentration, cracks in consumer resilience key areas of focus (MSN)
• Strong margins from big tech expected to be big driver of Q1 earnings growth (Bloomberg)
• Money market assets hit new all-time peak as weekly inflows rise to highest in three months (Bloomberg)
• Yen volatility dictated by US data (Bloomberg)
• After plunging to multi-year lows in Q1, demand for equity market protection picking up (Bloomberg)
• Oil prices up for second week on tensions in Europe and Middle East, limited supply, and strong global demand (Reuters)

ASX TODAY

• Ansell prepares $400m equity raise for M&A (AFR)
• APM Human Services largest shareholder Madison Dearborn submits revised non-binding indicative offer (AFR)
• Macquarie pulls out of UK’s Heathrow Airport bid (The Telegraph)
• Macquarie, Westpac and Bendigo Bank potential buyers of Judo (The Australian)
• Netwealth Chairman Tim Antonie discloses sale of 45,000 shares, beneficially owns 55,000 shares following the transaction (NWL)
• Perseus Mining declares offer from OreCorp unconditional (PRU)
• Perpetual turns into two-horse race as bidders team up (AFR)
• Qoria expected to receive takeover proposal from K1 on Monday (AFR)

BROKER NOTES

• Boss Energy initiated Equal-weight with $4.60 target (JPMorgan)
• Capricorn Metals downgraded to Underperform from Neutral; target remains $4.80 (Macquarie)
• Endeavour Group initiated Neutral with $5.94 target (Citi)
• Orica reinstated Overweight with $19.0 target (JPMorgan)
• Paladin Energy initiated Overweight with $1.75 target (Morgan Stanley)

INTERNATIONAL STOCKS

• Samsung Electronics expects tenfold increase in Q1 profit on chip demand (Bloomberg)
• Apple lays off over 600 California employees after shutting car project (CNBC)
• Nvidia plans US$200m AI centre in Indonesia and targeting broader expansion across South-East Asia (CNBC)
• Musk says Tesla will reveal robotaxi product on 8 August (CNBC)

CENTRAL BANKS

• BOJ Governor Ueda signals chance of another rate hike (Bloomberg)
• Central banks ramping up use of Fed's foreign reverse repo facility amid FX intervention warnings (Bloomberg)
• Economists eyeing RBNZ rate cuts in third or fourth quarter of 2024 (Reuters)
• Pressure on yuan may complicate PBOC easing plans (SCMP)

GEOPOLITICS

• Israel announces new measures to allow more aid into Gaza, including opening Erez border crossing (Washington Post)
• Biden says further support for Israel contingent on lowering civilian toll and potential ceasefire (FT)
• Yellen says US-China relations more stable and China reportedly willing to have further discussions on excess industrial capacity and government support (Reuters)

ECONOMY

• US March non-farm payrolls of 303,000 ahead of consensus 205,000 while unemployment rate was in-line and unchanged at 3.8% (Reuters)
• German industrial orders continue to decline (Reuters)
• UK economy shows signs of a strong rebound in all major sectors for the first time in nearly two years (Bloomberg)
• UK retail sales have been declining for 6 straight months (London Times)
• Japan household spending contracts further as inflation weighs (Bloomberg)
  
  

Sectors to Watch: Gold

The ASX 200 is set to open higher following a solid bounce for overnight markets. However, the bond yields (e.g. US 10-year yield at 4.40%, highest since late Nov-23) are starting to push towards uncomfortable levels – this will eventually matter for risk assets.

M&A: Can we just take a momentum to appreciate how it's Monday morning and there's already heaps of M&A headlines/speculation (e.g. Ansell's $400m cap raise for acquisitions, APM Human Services and Perpetual bids continue, major banks eye Judo Capital and US private equity firm K1 builds a stake in Qoria).

Gold kicks on: Gold up 1.77% last Friday and managed to finish at best levels (and up from session lows of -0.92%). This drew a strong response for the VanEck Gold Miners ETF, up 3.2% to levels not seen since May 2023. A lot of local gold names reversed early losses last Friday (e.g. Evolution up 2.36% from session lows of -1.05% and Northern Star up 0.5% from session low of -1.8%). Let's see if they can start the week on a strong note.