ASX 200 to rise, S&P 500 flat, ECB cuts rates for first time since 2019

ASX 200 futures are trading 22 points higher, up 0.18% as of 8:30 am AEST.

S&P 500 SESSION CHART

OVERNIGHT MARKETS

• Major US benchmarks finished around breakeven after yesterday’s strength that pushed the S&P 500 and Nasdaq to record highs
• Nvidia weighed (-1.1%) and eased back below US$3 trillion market cap
• AI enthusiasm offset by concentration concerns (Microsoft, Nvidia and Apple account for ~20% of the S&P 500) as well as growth slowdown concerns
• Resource-related equities ticked higher, including gold, uranium and copper
• Upcoming seasonal tailwind as the first 15 days of July have been the best two-week trading period for US markets since 1928, according to Goldman Sachs (Bloomberg)
• Bonds tracking for longest daily winning streak since late 2023 (Bloomberg)

INTERNATIONAL STOCKS

• GameStop and other meme stocks surge as Roaring Kitty schedules YouTube livestream for Friday (Bloomberg)
• DOJ, FTC move forward with antitrust probe into roles played by Microsoft, OpenAI and Nvidia in AI industry (NY Times, Politico)
• Intel, AMD, Qualcomm and Nvidia battle to get latest processes into next wave of AI enabled PCs (FT)
• TSMC hits record high amid positive news across chip industry, AI demand surges (WSJ
• Lululemon tops quarterly estimates on solid China demand, says consumers are still spending but selective of where they spend and what they buy (Reuters)

CENTRAL BANKS

• ECB cuts rates for first time in nearly five years, following Canadian and Swiss cuts (FT)
• BOC's rate cut may reassure other central banks to move before Fed (Bloomberg, FT)
• RBI seen to hold rates steady on Friday amid robust economic growth and uncertain inflation outlook (Bloomberg)

GEOPOLITICS

• Israel and Hezbollah tensions escalate (Bloomberg)
• Modi wins coalition support to form government for the third term (Bloomberg)
• Japan PM Kishida faces narrower path to re-election (Nikkei)

ECONOMY

• German industrial orders post fourth consecutive drop vs. expectations of growth (Bloomberg)
  
  

ASX TODAY

• ASX 200 set to open higher buoyed by an overnight uptick in commodity prices
• Market appears to be in for a quiet one – Will be interesting to see how CBA trades after yesterday's all-time high while names like Woodside and Fortescue are trading near lows
• Gold, silver, copper and oil prices starting to bounce after recent 5-10% drawdowns
• Bega Cheese launches strategic review of Queensland peanut processing facility, sale of the business could raise around $20m (The Aus)
• Cooper Energy holder First Sentier Investors lifts holding from 9.78% to 13.57% (COE)
• Dexus seeking a partner to bid for Powerco stake (AFR)
• Droneshield will have 37.8m shares released (at 80 cents vs. yesterday's close of $1.29) as part of tranche 2 of recent placement (DRO)
• GQG Partners reports 31-May FUM of $150.1bn vs. $142.0bn a month ago (GQG)
• Life360 prices its 5.8m shares US IPO at $27.00 per share through Goldman Sachs, Evercore and UBS (The Aus)

BROKER MOVES

• IGO initiated Buy with $8.80 target (Argonaut Securities)
• Lendlease downgraded to Sell from Neutral; target cut to $5.56 from $7.10 (UBS)
• Mineral Resources upgraded to Buy from Neutral; target up to $82 from $79 (BofA)
• Mineral Resources downgraded to Underperform from Outperform; target cut to $75 from $76.50 (CLSA)
• Region Group upgraded to Overweight from Equal-weight; target up to $2.50 from $2.44 (Morgan Stanley)
  
  

KEY EVENTS

• Fri 7 June: None
• Mon 10 June: None
• Tue 11 June: None
• Wed 12 June: Tower (TWR) – $0.024, ALS (ALQ) – $0.196
• Thu 13 June: Plato Income Maximiser (PL8) – $0.006, Incitec Pivot (IPL) – $0.043

• Dividends paid: Tamawood (TWD) – $0.11, Tasmea (TEA) – $0.025
• Listing: None

• 1:00 pm: China Balance of Trade (May)
• 4:00 pm: Germany Balance of Trade (Apr)
• 10:30 pm: Canada Unemployment Rate (May)
• 10:30 pm: US Non Farm Payrolls (May)
• 10:30 pm: US Unemployment Rate (May)

This Morning Wrap was written by Kerry Sun.