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

The S&P 500 and Nasdaq finished around breakeven as Nvidia ticked back below US$3 trillion market cap, the European Central Bank cut interest rates for the first time in almost five years and commodity prices continue to tick higher after recent drawdowns.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 chops around to close at breakeven (Source: TradingView)

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)

Companies trading ex-dividend: 

• 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 

Other ASX corporate actions today: 

• Dividends paid: Tamawood (TWD) – $0.11, Tasmea (TEA) – $0.025 

• Listing: None

Economic calendar (AEST):

• 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)