Morning Wrap: ASX 200 to fall, Apple lifts S&P 500 and Nasdaq to record highs ahead of Fed and CPI

The S&P 500 and Nasdaq hit fresh closing records overnight after Apple shares surged to all-time highs, investors are bracing for a double whammy of inflation and Fed reports and Judo Capital will replace CSR in the ASX 200.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 recovered from a weak start to finish positive(Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished mixed overnight but the S&P 500 and Nasdaq both set fresh all-time highs

• Apple (+7.3%) single handedly lifted the market as it unveiled its AI efforts – the US$220bn market cap gain marks the 3rd largest single-day gain in history

• Blue chip Dow, small cap Russell 2000 and Equal-weight S&P 500 all finished lower

• Markets largely in waiting mode ahead of tonight’s US CPI and FOMC releases – US inflation is expected to remain unchanged in May at 3.4%

• Markets remain cautious on several themes including pickup in yield volatility, breadth concerns, earnings risk from dampened pricing power and geopolitical uncertainty

• Bond traders ok with higher-for-longer rates through 2024 will follow new Fed dots all the way into next year (Bloomberg)

• Fund flow data shows US stock market accounted for US$56bn of the US$116bn pumped into ETFs (FT)

STOCKS

• Apple's latest suite of new features seen as defining moment for AI and set to kick off iPhone upgrade super cycle (Bloomberg)

• Musk warns that he will ban Apple devices if OpenAI is integrated at operating system level (Bloomberg)

• Apollo Global and Kyndryl in talks about a joint bid for DXC Technology (Reuters)

• Spotify introduces new premium tier with better audio, playlist tools (Bloomberg)

• GM cuts 2024 EV sales projection amid weaker-than-expected demand (CNBC)

CENTRAL BANKS

• Lagarde says ECB can keep rates on hold for as long as is needed, rates not on pre-determined path (FT)

• ECB's Rehn and Simkus lean hawkish on further rate cuts (Bloomberg)

GEOPOLITICS

• UN Security Council backs Israel-Hamas ceasefire plan outlined by Biden (FT)

• Hamas accepts UN ceasefire resolution, ready to negotiate over details (Reuters)

• EU in talks to keep gas flowing through Russia-Ukraine pipeline (Bloomberg)

• France's far right projected to win snap election with absolute majority (Reuters)

ECONOMY

• UK unemployment jumps but wage growth remains high, raising questions about BoE rate cut timing (Bloomberg)

• Australian business confidence falls back into negative territory amid subdued economic activity (The Western Aus)

• OPEC's latest monthly report maintains strong 2024 demand growth forecast (Reuters)

• EIA cuts its OPEC+ production forecast for remainder of 2024 (Oil & Gas Journal)

ASX TODAY

• ASX 200 set for weak start as we don't have any US$3tn market cap companies to lift the benchmark higher – although the market will likely be in waiting mode ahead of US inflation and FOMC reports tonight

• ASX 200 Index changes, effective 20-Jun – Judo Capital (add), CSR (removed)

• Resource-related ETFs sold off overnight – Notably Uranium (-4.3%), Nickel Miners (-3.6%), Copper (-2.3%), Rare Earths/Strategic Metals (-2.0%) and Silver (-1.5%)

• Alumina takeover to be completed around 1-Aug following receive regulatory approvals and court proceedings (AWC)

• Collins Foods CEO Drew O’Malley resigns effective 1-Jul (CKF) 

• CSR takeover receives FIRB approval (CSR)

BROKER MOVES

• Champion Iron upgraded to Outperform from Neutral; target up to $7.90 from $7.50 (Macquarie)

• Close the Loop initiated Buy with $0.65 target (Canaccord)

• Ora Banda Mining initiated Speculative Buy with $0.50 target (Canaccord) 

• Regal Partners initiated Add with $4.70 target (Morgans)

• Woodside upgraded to Outperform from Neutral; target remains $32 (Macquarie)

Companies trading ex-dividend: 

• Wed 12 June: Tower (TWR) – $0.024, ALS (ALQ) – $0.196

• Thu 13 June:  Champion Iron (CIA) – $0.11, Plato Income Maximiser (PL8) – $0.006, Incitec Pivot (IPL) – $0.043 

• Fri 14 June: None

• Mon 17 June: None

• Tue 18 Jun: Premier Investments (PMV) – $0.63

Other ASX corporate actions today: 

• Dividends paid: None

• Listing: None

Economic calendar (AEST):

• 11:30 am: China Inflation (May)

• 4:00 pm: UK GDP (Apr)

• 10:30 pm: US Inflation (May)

• 4:00 am: Fed Interest Rate Decision

• 4:00 am: FOMC Economic Projections