Morning Wrap: ASX 200 to bounce, S&P 500 flat, Treasurer approves ANZ-Suncorp deal

The local sharemarket is set to bounce and extend the strong reversal from Thursday (finished -0.30% from session lows of -1.65%).

Major US benchmarks ticked higher overnight as the market awaits key PCE inflation data and the presidential debate.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 ticks higher in relatively choppy trade (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks ticked higher in relatively choppy trade

• Magnificent 7 names were mostly higher but Nvidia (-1.9%) pulled back

• US bond yields lower, with the 2-year down 4 bps and not far off a 3-month low

• Bond yield backup reflecting weaker-than-expected economic data from the US and China, cautious consumer readthrough from company earnings

• Amazon hits US$2tn market cap amid AI enthusiasm and announces a new direct-from-China discount section (FT)

• Yen remains at mercy of Fed's higher-for-longer stance (Bloomberg)

• Global M&A deals hit US$1.5tn in the first half of 2024 on a surge of US takeover activity (FT)

• IPOs have had best start to the year since 2021 with more than US$20bn raised so far (Bloomberg)

STOCKS

• Big US banks pass Fed's stress test, paving way for shareholder payouts (Bloomberg)

• Micron's Q3 results largely in-line but outlook comes in below consensus due to production ramp issues, AI takeaways were positive (Bloomberg)

• Levi Strauss shares slumps after quarterly sales miss consensus (Reuters)

CENTRAL BANKS

• Fed's Bowman reiterates she still does not see interest rate cuts this year (Reuters)

• Japan inflation expectations near decade high, backing case for rate hike (Bloomberg)

• ECB's Lane says ready to respond to any surprises as it decides on its next policy steps amid uncertainty (Bloomberg)

• Riksbank keeps rates at 3.75% as expected, signaling a cautious yet optimistic approach to monetary policy (Bloomberg)

GEOPOLITICS

• White House and Israel resolved some of the problems that have slowed down US weapons shipments (Axios)

• China hopes negotiations with EU over tariffs on Chinese EVs succeed (Reuters)

ECONOMY

• US capital goods orders unexpectedly fell in May, suggesting that business spending on equipment weakened for the month (Reuters)

• China's manufacturing activity to contract for second month in June (Reuters)

• China industrial profit growth slows on softening demand (Reuters)

ASX TODAY

• ASX 200 set to rise after a strong reversal on Thursday, where the index finished 0.3% lower, up from session lows of -1.65%

• 5G Networks sells primary businesses to managing director for $3.2m, proposes 15 cent distribution before delisting in 2025 (5GN)

• Andrew Forrest seeking seat on Austal board – his private investment vehicle Tattarang has a 19.6% stake in the company (The Aus)

• Casino regulators clear way for Bruce Mathieson to buy up more of Star (AFR)

• De Grey Mining flagged as a potential takeover target, sources say that Agnico Eagle is gathering information (The Aus)

• Insurance Australia on track to deliver FY24 Insurance Profit and Margin around the upper end of guidance ranges, GWP growth to be consistent with the 'low-double digit' guidance (IAG)

• Newmont's Akyem gold worth close to $1bn, Chinese suitors considered frontrunners but Perseus not out of the picture (The Aus)

• Federal Treasurer approves of ANZ acquisition of Suncorp Bank (SUN)

• Ventia Services awarded 5-year Homes NSW contract valued at $570m (VNT)

BROKER MOVES

• Arcadium Lithium initiated Neutral with $6.50 target (Goldman Sachs)

• Charter Hall Group downgraded to Underperform from Outperform; target cut to $11.51 from $13.74 (CLSA)

• Emeco Holdings initiated buy with $1.10 target (Argonaut) 

• Macmahon Holdings downgraded to Hold from Buy; target remains $0.30 (Argonaut)

• PWR Holdings upgraded to Positive from Neutral; target remains $13 (E&P) 

• Universal Store upgraded to Buy from Neutral; but target cut to $6 from $6.25 (UBS)

Companies trading ex-dividend: 

• Fri 28 June: Abacus Group (ABG) – $0.043, Ophir High Conviction Fund (OPH) – $0.06, Danakali (DNK) – $0.009, Abacus Storage King (ASK) – $0.03

  • Fri 28 June: 38 ETFs and funds are also trading ex-dividend. See a full list here

• Mon 1 July: 210 ETFs are trading ex-dividend and funds

• Tue 2 July: None

• Wed 3 July: None

• Thu 4 July: Clime Capital (CAM) – $0.014 

Other ASX corporate actions today: 

• Dividends paid: None

• Listing: Alfabs Australia (AAL) at 11:00 am 

• Earnings: None

• AGMs: None

Economic calendar (AEST):

• 11:30 am Australia Housing Credit (May)

• 4:45 pm: France Inflation (Jun)

• 10:30 pm: Canada GDP (May)

• 10:30 pm: US Core PCE Price Index (May)