ASX 200 to rise, S&P 500 logs best February in 9 years + Lithium futures rally
Get up to date on overnight market activity and the big events for the day.
ASX 200 futures are trading 20 points higher, up 0.26% as of 8:30 am AEDT.
![Source: Market Index](https://www.livewiremarkets.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBNE5oQ2c9PSIsImV4cCI6bnVsbCwicHVyIjoiYmxvYl9pZCJ9fQ==--4309d95c5a8fd5c8cce9bb3edc0a78400eb70a7b/Overnight%20summary%20ASX.png)
S&P 500 SESSION CHART
![S&P 500 closes at best levels despite a choppy open (Source: TradingView)](https://www.livewiremarkets.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBNFJoQ2c9PSIsImV4cCI6bnVsbCwicHVyIjoiYmxvYl9pZCJ9fQ==--e690121bac6759d1095e04aee81622673648029b/SPX_2024-03-01_08-15-09.png)
ASX TODAY
- ASX 200 set to open higher on Friday and on track to mark a fresh all-time high
- Resources and tech set for a strong session after overnight big tech outperformance, fading bond yields and firmer commodity prices
- Collins Foods downgraded to Sell from Neutral at Citi and target cut to $10.60 from $11.93
- Orica downgraded to Neutral from Buy at Citi but target increased to $18.50 from $17.00
- Pepper Money upgraded to Outperform from Neutral at Macquarie and target increased to $1.70 from $1.35
- Ramsay Healthcare downgraded to Neutral from Overweight at Macquarie and target cut to $57.50 from $60.00
- South32 upgraded to Outperform from Neutral at Macquarie and target increased to $3.40 from $3.10
- Service Stream upgraded to Outperform from Neutral at Macquarie and target increased to $1.25 from $0.91
MARKETS
- S&P 500 finished higher and near best levels
- Gains were largely driven by big tech while defensive sectors such as Healthcare, Staples and Utilities lagged
- Treasury yields were very choppy after US core PCE rose 0.4% month-on-month and up 2.4% year-on-year in January – The Personal Consumption Expenditures Price Index is the Fed's preferred inflation measure and the numbers were in-line with market expectations
- US 2-and-10-year yields both finished relatively unchanged from 5-6 bp intraday rallies
- February major benchmark performances – Nasdaq +6.12%, Russell 2000 +5.52%, S&P 500 +5.17% and Dow +2.22%
- February's biggest story was the shift in market rate cut expectations from March to June following hotter-than-expected inflation data and a hawkish Fed
- Markets hit a defensive tone in the second half of last month but the path of least resistance remained to the upside
- Ray Dalio says US stock market is not in a AI speculative bubble (CNBC)
INTERNATIONAL STOCKS
- Apple resellers in China cut iPhone 15 prices on persistent demand slump (Bloomberg)
- Salesforce's solid quarterly sales, dividend cushion weak outlook (Bloomberg)
- Snowflake slumps on CEO retirement, softer product revenue guide (CNBC)
- HP misses first-quarter revenue estimates on weak PC demand (Reuters)
- Shell's solar unit launches asset sale, as company rolls back climate initiatives (Reuters)
CENTRAL BANKS
- Fed officials voice support for rate cuts but emphasize data dependent stance (Bloomberg)
- BoJ odds of March rate hike rising (Bloomberg)
- BoE's Mann says price rises increasingly driven by people who do not feel the impact of higher interest rates (FT)
- RBNZ Governor Orr confident on inflation trajectory (Bloomberg)
GEOPOLITICS
- South Korea and US to begin defense cost-sharing talks in near future (Yonhap)
- China's Wang Yi invited to Australia in March to discuss unresolved issues (SCMP)
- Putin warns of nuclear war in annual address if NATO send troops to Ukraine (CNBC)
ECONOMY
- Fed’s preferred inflation metric increases by most in a year (Bloomberg)
- French inflation eased to weakest level since September 2021 (Bloomberg)
- India GDP rose 8.4% in the Oct-Dec quarter (Reuters)
- UK business confidence dips but firms plan to increase hiring (CityAM)
- Japan factory output falls at fastest pace in nearly four years (Reuters)
- Australian retail sales recover but growth remains negligible (Bloomberg)
- US congressional leaders avert weekend shutdown and plan to wrap up funding bills in March (Bloomberg)
- Stronger US economy, vibrant growth could boost tax revenue, potentially stabilising debt-to-GDP ratio (Reuters)
- Chinese long bond yields plunge as investors bet on more easing to support the country's poor economic recovery (Bloomberg)
![US-listed sector ETFs (Source: Market Index)](https://www.livewiremarkets.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBNFZoQ2c9PSIsImV4cCI6bnVsbCwicHVyIjoiYmxvYl9pZCJ9fQ==--6fe43ffa883df8e54e7d837427b1c63d8b62164b/ETFs.png)
It's Lithium Time
Chinese lithium carbonate futures rallied 9.2% on Thursday to 119,200 yuan a tonne, supported by ongoing production cuts and environmental inspects in Jiangxi. Prices have now rallied almost 22% in the last five sessions.
Here are some important things to note as we head into Friday's session:
- Timing: Chinese lithium futures were up around 4.3% when the ASX closed and continued to rally through to their market close
- Peers: China and US-listed peers rallied pretty strongly, including Ganfeng (+7.0% and up 26.7% since 5 Feb), Albemarle (+4.3% and up 26.7% since 5 Feb) and SQM (+8.0% and up 26.3% since 5 Feb)
- Shorters: Lithium stocks are heavily shorted. Some of the most shorted names as of 23 February include Pilbara Minerals (21.24%), Core Lithium (11.66%), Sayona (8.64%) and Liontown Resources (7.56%)
- ETFs: The VanEck Rare Earth/Strategic Metals ETF (+3.54%) and Global X Lithium & Battery Tech ETF (+3.58%) were among the best performing ETFs in our above watchlist. The Rare Earth/Strategic Metals ETF has been in a rather persistent downtrend for around 8 months. Let' see if it can buck that trend over the coming days.
![VanEck Rare Earth/Strategic Metals ETF daily chart (Source: TradingView)](https://www.livewiremarkets.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBNFpoQ2c9PSIsImV4cCI6bnVsbCwicHVyIjoiYmxvYl9pZCJ9fQ==--a09a76068ec55c7bc6fbaabb9147e859dbc4e024/REMX_2024-03-01_08-26-37.png)
VanEck Rare Earth/Strategic Metals ETF daily chart (Source: TradingView)
KEY EVENTS
ASX corporate actions occurring today:
- Trading ex-div: 44 companies and ETFs are trading ex-div today. Check out the full list here
- Dividends paid: Diverger (DVR) – $0.10, Dicker Data (DDR) – $0.15, National Storage REIT (NSR) – $0.055, Hotel Property Investments (HPI) – $0.095
- Listing: None
Economic calendar (AEDT):
- 12:30 pm: China NBS Manufacturing and Services PMI (Feb)
- 4:00 pm: Japan Consumer Confidence (Feb)
- 9:00 pm: Eurozone Inflation (Feb)
- 9:00 pm: Italy GDP (2024)
- 2:00 am: US ISM Manufacturing Services (Feb)
This Morning Wrap was written by Kerry Sun.
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Livewire and Market Index's pre-opening bell news and analysis wrap. Available weekday mornings and written by Kerry Sun.
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