ASX 200 to fall, uranium stocks break out + China's headed for another real estate crisis

ASX 200 futures are trading 30 points lower, down -0.41% as of 8:15 am AEST.

S&P 500 SESSION CHART

MARKETS

• S&P 500 -0.11%, Nasdaq -0.68%, Dow +0.30%, Russell 2000 +0.13%
• S&P edges lower in a relatively uneventful session, marking a 0.3% weekly decline
• Treasury yields higher – The US 10-year hits 4.16%, close to a 9-month high
• WTI crude rallied for a seventh consecutive week, up 0.5%
• Bullish focus points for the week: Disinflation traction (US core inflation was up 0.16% month-on-month in July), dovish Fed commentary, no signs of a meaningful credit crunch, positioning indicators beginning to moderate
• Bearish focus points for the week: Moody’s cut credit ratings on ten US small-to-midsize banks, weaker guidance from UPS, negative operating leverage risk for corporate earnings, energy price rally a dent in disinflation narrative, hedge funds have capitulated on shorts, AI hype losing steam, China remains a major global growth concern
• Discretionary-to-staples stocks ratio shows recession unlikely (Bloomberg)
• Treasuries may continue to see volatility as Fed casts a mixed shadow (Bloomberg)

STOCKS

• UBS ends Credit Suisse’s government and central bank protections (CNBC)
• Chinese property giant Country Garden issued a profit warning amid a decline in real estate sales (CNBC)

CENTRAL BANKS

• Fed seen pausing after tame CPI data but mission not over (Bloomberg)
• ECB to pause in September says slim majority of economists (Reuters)
• RBA Governor Lowe says its possible they may need to hike further (Bloomberg)

ECONOMY

• US producer prices rose 0.3% month-on-month above consensus for a 0.2% monthly rise, driven by strong service costs (Reuters)
• UK Q2 GDP stronger-than-expected, pressures for more BoE hikes (Reuters)
• South Korea export slide extends into August (Yonhap)
• China new bank loans fall sharply in July, well-below expectations (Reuters)
• IEA downgrades 2024 global oil demand growth forecast (Reuters)
  
  

DEEPER DIVE

China's worsening economic slowdown

The real estate developer has total liabilities of 1.4 trillion yuan (US$195bn) at the end of last year and said it had underestimated the market downturn.

China's new bank loans tumbled in July, down 89% month-on-month to the lowest levels since late 2009.

Commodities like iron ore and copper are down around 8-12% since late July. Could things get worse on the commodity front if we don't see any meaningful support from China?

Sectors to Watch ON MONDAY

Uranium: The Global X Uranium ETF (NYSE: URA) rose 1.8% overnight to a 2-month high. Spot prices advanced for a fourth straight week to US$56.8/lb, close to a 14-month high amid growing supply risks from Russia (sanctions) and Niger (political turmoil might see exports halted to key consumer France). Uranium has a pretty strong track record of fading its rallies but we're seeing the gains somewhat stick this time round.

Gold: Gold is finding a little support as it nears a five month low. Do we see a bit of a double bottom dynamic play out around these levels?

Tech: Tech was the worst performing S&P 500 sector last Friday, led by megacap names as well as semiconductor stocks. The most notable decliner was the iShares Semiconductor ETF (NYSE: SOXX), which fell 2.4% to a 6-week low.

KEY EVENTS

• Trading ex-div: Euroz Hartleys (EZL) – $0.035, Suncorp (SUN) – $0.27
• Dividends paid: Nickel Industries (NIC) – $0.02, Mayfield Group (MYG) – $0.01, Charter Hall Long Wale REIT (CLW) – $0.07
• Listing: Lithium Universe (LU7)

No major economic announcements.