ASX 200 to fall, Nasdaq posts worst day since December 2022, blue-chip Dow extends gains

ASX 200 futures are trading 43 points lower, down -0.53% as of 8:30 am AEST.

S&P 500 SESSION CHART

OVERNIGHT MARKETS

• Major US benchmarks finished mostly lower, with the Nasdaq experiencing its worst session since December 2022
• Rotation dynamics continued to persist, with Magnificent Seven names down between 1-6% while the ~73% of Dow constituents finished higher
• Small caps and cyclicals took a bit of a pause after recent big rotation, the Russell 2000 had rallied 12% in the prior five sessions or almost 4.5 standard deviations above its 50-day moving average
• No other major US benchmark (Dow since 1900, S&P 500 since 1928 and Nasdaq since 1971) has ever closed at that much of an extreme, according to Bespoke
• "Trump trade" supercharged by hopes his policies will lift corporate profits (Reuters)
• Commercial real-estate debt market defaults are surging, triggering losses (WSJ)
• Asset managers forego billions in fees from US fund investors last year in race to bottom (FT)
• Copper hovering near two-week lows amid demand uncertainty out of China (Bloomberg)

STOCKS

• Adobe Analytics says US online sales hit US$7.2bn on first day of Amazon's Prime event (Reuters)
• ASML shares drop 10% as Q2 results flag clouded outlook of more severe US export curbs (Reuters)
• Spirit Airlines shares dip 10% after downgrading Q2 forecast on weak non-ticket sales and fee revenue (Reuters)
• Klarna lining up financial advisors for planned US IPO (FT)
• Equity trading revenues across investment banks up 18% year-on-year, more than triple estimates (Bloomberg)

CENTRAL BANKS

• Fed’s Waller said he’d like to see a bit more evidence inflation is heading towards 2% but believes the Fed is getting closer to the time when a cut is warranted (Bloomberg)
• Fed Kugler says it will be appropriate to begin cuts later this year (Bloomberg)
• PBOC readies plans to short sell bonds amid bubble concerns (Bloomberg)

POLITICS & GEOPOLITICS

• Biden says he'd consider exiting race if 'medical condition' emerged (NYT)
• Trump says he won't remove Powell mid-term, wants to cut corporate tax rate to 15% (Bloomberg)
• JD Vance pick as Trump's VP likely to fuel momentum from tech leaders frustrated with Biden administration (Reuters)
• US exploring tougher restrictions against companies giving China access to advanced semiconductor technology (Bloomberg)
• Trump voices skepticism about defending Taiwan unless it pays for defense (FT)
• French PM Attal resigns, caretaker government to manage affairs amid political uncertainty (Reuters)

ECONOMY

• US June housing starts beat consensus but still down 4.4% year-on-year to eight-month low (Reuters)
• UK June inflation remained at 2% target but services still elevated (Bloomberg)
• New Zealand CPI softens more than expected but domestic inflation pressures elevated (Bloomberg)
• Singapore exports down sharply amid dip in electronics shipments (Bloomberg)
  
  

ASX TODAY

• Domino’s Pizza to close up to 80 low volume stores in Japan, France business targeting a net 10-20 store reduction in FY25 and expecting FY25-26 store openings to be below the 3-5 year outlook of 7-9% new store openings (DMP)
• Fortescue pushes back on hydrogen dream, target of 15 million tonnes of green hydrogen by 2030 on the backburner and "de-prioritised" several green hydrogen projects, 700 jobs slashed (AFR)
• Healius has received two non-binding indicative bids for its Lumus Imaging business at around $700 million (AFR)
• Iress in focus for private equity buyout, sources point to Blackstone (The Aus)

WHAT TO WATCH TODAY

• Tech: It was a sea of red for big US tech stocks. Let's see if this translates into any weakness for local names.
• Uranium: Global X Uranium ETF down 4.4% overnight and not far from 3-month lows. Local uranium names somewhat lead this decline on Wednesday (DYL, BOE and PDN down 1-3%). But weakness could very well persist in today's session.
• Healius: The AFR says Healius has received two PE bids for its Lumus Imaging businesses. Sources said the bids valued Lumus around $700 million. Macquarie was expecting a sale which valued the business between $590-709 million, with proceeds used to pay down debt and improve productivity.
• Droneshield: Droneshield shares are down 30% in the last two sessions. It managed to bounce pretty hard on Wednesday (finished 9% lower, from session lows of -23%). Let's see what madness DRO has in store for us today.

BROKER MOVES

• Jumbo Interactive initiated Underweight with $14.50 target (JPMorgan)
• Liontown Resources initiated Neutral with $1.30 target (E&P)
• Praemium downgraded to Hold from Buy; target cut to $0.50 from $0.55 (Ord Minnett)
• Zip Co upgraded to Outperform from Sector Perform; target up to $1.90 from $1.10 (RBC Capital)
  
  

KEY EVENTS

• Thu 18 July: None
• Fri 19 July: Plato Income Maximiser (PL8) – $0.006
• Mon 22 July: None
• Tue 23 July: None
• Wed 24 July: None

• Dividends paid: Graincorp (GNC) – $0.14
• Listing: None
• Earnings: None
• AGMs: None

• 9:50 am: Japan Balance of Trade (Jun)
• 11:30 am: Australia Unemployment Rate (Jun)
• 4:00 pm: UK Unemployment Rate (May)
• 10:15 pm: ECB Interest Rate Decision

This Morning Wrap was written by Kerry Sun.