ASX 200 futures flat, Small caps extend gains, Trump-victory trades soar

ASX 200 futures are trading 4 points lower, down 0.05% as of 8:30 am AEST.

S&P 500 SESSION CHART

OVERNIGHT MARKETS

• Major US benchmarks ticked higher but finished well below session highs
• Small caps had another strong day, with the Russell 2000 up 7.7% in the past four sessions – UBS said on Monday that when the market experiences a significant one-day rotation from large to small caps, this trend tends to persist for the following four weeks
• Bond yields continued to fall – the US 2-year is down 30 bps this month to the lowest level since early February
• US yield curve steepens, with the 2-and-10 year spread widening to ~23 bps or the most inverted since January as Trump policies (taxes, tariffs and immigration) viewed as inflationary
• Stretched positioning in focus with AAII bull-bear spread jumping 120 bps to 27.5% last week to year-to-date highs, JPMorgan says its US Tactical Positioning Monitor hit a new year-to-date high and within the 94th percentile since 2018
• Trump trade ramped up with US dollar higher, Treasury curve steepening (Bloomberg)
• Bitcoin jumps by most in 2 months on Trump presidency optimism (Bloomberg)

STOCKS

• Adobe argues Amazon Prime Day spending could jump 10% year-on-year (Reuters)
• Apple's India sales jump 33% to US$8bn last year as China shift accelerates (Bloomberg)
• Donald Trump's media company surges in premarket trading after a failed assassination attack (Bloomberg)
• TSMC Q2 profit seen jumping 30% on surging AI chip demand (Reuters)
• Burberry replaces CEO and suspends dividend amid luxury slowdown (Bloomberg)
• Tesla shares boosted by Elon Musk’s Trump endorsement (Reuters)
• Salesforce cutting 300 jobs in latest move to find the right structure (Bloomberg)

CENTRAL BANKS

• Powell says Q2 data has given policymakers more confidence that inflation is headed back to target, labour market has cooled but won’t offer any signals about upcoming policy decisions (Bloomberg)
• Odds of BoE rate cut on knife edge due to sticky services inflation (Bloomberg)

POLITICS & GEOPOLITICS

• Trump's defiant display after assassination attempt immediately supercharges his 2024 bid (Bloomberg)
• Biden set to announce plan that would cap annual rent raises by 5% (Washington Post)

ECONOMY

• China Q2 GDP up 4.7%, the weakest pace in five quarters (Bloomberg)
• China new home prices fall despite rescue efforts (Bloomberg)
  
  

ASX TODAY

• ASX 200 set to open relatively flat following a weak overnight lead for resource markets
• Copper Energy reports Q4 production of 0.95MMboe, in-line with consensus (COE)
• Coronado Global’s largest shareholder – Energy and Minerals Group – received inbound offers for its 51% stake in the company (The Aus)
• Gold Road-Regis tie-up speculation remains in overdrive, merger between the two seen as ‘highly logical’ (The Aus)
• Hub24 reports Q4 total FUA of $104.7bn vs. $100.3bn a quarter ago (HUB)
• Integrated Research reports full-year trading update, EBITDA $23-25m vs. $19m consensus, CEO John Ruthven to step down (IRI)
• Rio Tinto reports Q2 production results, notes all conditions have been satisfied for its investment to develop the Simandou high-grade iron ore deposit (RIO)

WHAT TO WATCH TODAY

• Fintech: Global X Fintech ETF rallied 2.5% overnight and finished at its highest level since 11 April. The dual-listed Block finished the session 4.8% higher (and up 12% in the last three sessions) to a two month high. Plenty of ASX-listed names have broken out in recent days, the ones that come to mind include TNE and XRO. Interestingly, Zip nosedived 7% on Monday after it was announced to replace Altium in the ASX 200.
• Resource weakness: Broad-based overnight weakness for the above resource-related ETFs, including lithium, copper, uranium and gold. The weaker-than-expected Chinese economic data and yield curve inversion could be weighing on commodity markets. The NYSE-listed BHP finished the overnight session 1.6% lower.

BROKER MOVES

• Australian Unity Office Fund downgraded to Accumulate from Buy; target cut to $1.37 from $1.45 (Ord Minnett)
• DUG Technology initiated Buy with $3.46 target (Ord Minnett)
• PEXA Group initiated Overweight with $15 target (JPMorgan)
  
  

KEY EVENTS

• Tue 16 July: Metcash (MTS) – $0.085
• Wed 17 July: Turners Automotive (TRA) – $0.069
• Thu 18 July: None
• Fri 19 July: None
• Mon 22 July: None

• Dividends paid: Garda Property Group (GDF) – $0.015
• Listing: None
• Earnings: None
• AGMs: None

• 7:00 pm Germany ZEW Economic Sentiment Index (Jul)
• 10:30 pm: Canada Inflation Rate (Jun)
• 10:30 pm: US Retail Sales (Jun)

This Morning Wrap was written by Kerry Sun.