ASX 200 on pace to give back all of May's gains, rising yields push US stocks lower

ASX 200 futures are trading 52 points lower, down -0.68% as of 8:30 am AEST.

S&P 500 SESSION CHART

OVERNIGHT MARKETS

• Heavy overnight session with major US benchmarks lower and closing near worst levels
• Bond yield backup remains the latest overhang driven by hawkish Fedspeak, firm economic data, soaring commodity prices and supply pressures
• Market now only pricing in just 30 bps worth of Fed rate cuts this year, with the probability of a September rate cut down to less than 50%
• Nvidia's market cap surges closer to Apple in a major reshuffle of Wall Street's biggest player (Reuters)
• Wall Street's favourite recession indicator, the inverted yield curve, is in a slump of its own (WSJ)

INTERNATIONAL STOCKS

• ConocoPhillips in advanced talks to buy Marathon Oil in all-stock deal (FT)
• American Airlines cuts Q2 guidance, shares crater 13% (Bloomberg)
• OpenAI begins training next AI model amid ongoing safety concerns (Axios)
• Tesla tells suppliers to start building parts outside of China and Taiwan (FT)

GEOPOLITICS

• Israel estimates Gaza war to last another 7 months (Reuters)
• Israel steps up Rafah offensive as tanks enter city's centre (FT)
• Second set of congressional US lawmakers meeting with Taiwan's president as China tensions mount (Axios)
• China's top chipmakers push hard to localise supply of key materials and chemicals to counter US export controls (FT)

ECONOMY

• IMF raises China growth forecasts on strong Q1 GDP and policy support (Reuters)
• German consumer sentiment recovers further heading into June to reach highest since April 2022 (Reuters)
• Australia's hotter than expected April inflation reinforces RBA's higher for longer stance (Bloomberg)
• New Zealand business confidence softens further but inflation metrics ease (Interest co)
  
  

ASX TODAY

• ASX 200 futures suggest another heavy session following Wednesday's hot CPI-driven selloff
• Fairly bearish lead-in with all US sectors red, most commodities ticked lower overnight and VIX spiked to a near one-month high
• Travel and leisure sector could come under pressure after a downbeat American Airlines earnings result weighed on peers
• Australian beef exporters have had their suspensions from exporting to China removed, a potential tailwind for names like Australian Agriculture Co, Elders (ABC)
• BHP abandons US$49bn bid after Anglo holds firm rejection, saying the miner had failed to address its concerns over the “highly complex and unattractive structure (Bloomberg)
• Dalrymple Bay Infrastructure major shareholder QIC seeking to offload its entire 10.1% stake in the company (AFR)
• Generation Development to raise $60-70m to help fund full acquisition of Lonsec (AFR)
• Ramelius Resources approached Westgold Resources to discuss merger (AFR)
• Tietto Minerals holder Mitsubishi UFJ decreases holding from 10.3% to 5.6% (TIE)

BROKER MOVES

• Bendigo Bank upgraded to Buy from Neutral; target up to $12 from $10.40 (BofA)
• Fisher & Paykel upgraded to Overweight from Market-weight; target up to $30 from $23.25 (Wilsons)
• Lynas initiated Buy with $8.00 target (Ord Minnett)
• Northern Minerals initiated Hold with $0.03 target (Ord Minnett)
• NRW Holdings upgraded to Buy from Overweight; target up to $3.25 from $2.95 (Jarden)
• Qoria initiated Buy with $0.60 target (Jefferies) 
  
  

KEY EVENTS

• Thu 30 May: Technology One (TNE) – $0.05, KKR Credit Income Fund (KKC) – $0.017, Gryphon Capital (GCI) – $0.015, 360 Capital Mortgage REIT (TCF) – $0.035, Pengana International (PIA) – $).014, Metrics Income Opportunities (MOT) – $0.013, Metrics Master Income Trust (MXT) – $0.014
• Fri 31 May: None
• Mon 3 June: Newmont (NEM) – $0.268
• Tue 4 June: None
• Wed 5 June: Hancock & Gore (HNG) – $0.01, Infratil (IFT) – $0.017

• Dividends paid: Unibail-Rodamco-Westfield (URW) – $0.147
• Listing: None

• 11:30 am: Australia Building Permits (Apr)
• 10:30 pm: US GDP (Q2)

This Morning Wrap was written by Kerry Sun.