ASX to rise, S&P 500 swings into positive territory, Deep Yellow joins the ASX 200

ASX 200 futures are trading 38 points higher, up 0.49% as of 8:20 am AEST.

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S&P 500 SESSION CHART

OVERNIGHT MARKETS

• S&P 500 rallied into the close to finish at best levels, up from session lows of -0.90%
• Major US benchmarks were higher in May after a weak April – Dow +2.3%, S&P +4.80%, Russell 2000 +4.8% and Nasdaq +6.8%
• Big tech stocks pushed the indexes higher, with more than half of the S&P 500’s May gains attributed to Nvidia (+26.8%), Apple (+12.9%), Microsoft (+6.8%) and Alphabet (+6.0%)
• Proportion of S&P 500 stocks trading below the 50-day moving average has fallen from 90% at the beginning of the year to 40%, flagging concentration concerns
• Nvidia has tripled in value over past year and could soon surpass Apple as second-most valuable company (Reuters)
• Penny stocks see a boom in trading, raising worries market becoming overheated (FT)
• Worrisome rebound in US yields casts shadow on stocks at record highs (Reuters)
• China ETFs see first monthly outflows for first time since Feb-2023 (Bloomberg)
• OPEC+ agrees to extend all production cuts into 2025 (Bloomberg)

INTERNATIONAL STOCKS

• Nvidia CEO Huang says company plans to upgrade its AI accelerators every year, highlights next-gen AI platform 'Robin' for 2026 (Bloomberg)
• Facebook attracting highest number of young adults in three years (Reuters)
• Dell results unable to meet very elevated market expectations (Bloomberg)
• MongoDB latest enterprise software name to cut guidance (CNBC)
• Gap rallies with positive comps across all brands (CNBC)

CENTRAL BANKS

• Dallas Fed's Logan says rates may not be as restrictive as they would have been before pandemic (Bloomberg)
• NY Fed's Williams expects inflation to resume declining in H2, rate cut depends on incoming data (Bloomberg)
• Economists dial back ECB rate cut expectations amid inflation risks according to latest survey (Bloomberg)
• BOJ panelist says central bank must steadily hike rates to guard against inflation accelerating above 2% target (Reuters)

GEOPOLITICS

• US slowing AI chip exports to Middle Eastern countries (Bloomberg)
• TikTok preparing a US copy of the app's core algorithm (Reuters)

ECONOMY

• US core PCE inflation rose 0.25% month-on-month in April, in-line with expectations and below prior month’s 0.33% rise (Reuters)
• Eurozone inflation comes in hotter than expected for May (Bloomberg)
• China manufacturing PMI flips into contraction for first time since Feb (Reuters)
• Japan industrial production unexpectedly stalls, retail sales beat while jobless rate steady (Reuters)
• Tokyo core inflation accelerates amid speculation around timing of next hike (Bloomberg)
• South Korea industrial output bounces back, retail sales continue to fall (Yonhap)
• South Korean semi inventories shrink by most since 2014 amid surging global demand (Bloomberg)
  
  

ASX TODAY

• ASX 200 set to open higher after a strong lead in from Wall Street
• ASX 200 Index changes effective prior to open on 11-Jun – Deep Yellow (add), Silver Lake Resources (removed)
• Lower yields should see some positive flow for local Real Estate, Utilities sectors
• Materials-related ETFs performed relatively weak overnight as copper, gold and iron ore prices ticked lower
• APM Human Services to be acquired by Madison Dearborn at $1.45 (AFR)
• Northern Star Resources CEO Stuart Tonkin sold 35,000 shares (NST)
• Vulcan Energy raises 40m euros from three investors – CIMIC, Hancock Prospecting and Victor Smorgon Group (EQS News)

BROKER MOVES

• Brickworks upgraded to Buy from Hold; target up to $29.50 from $29 (Bell Potter)
• Dicker Data upgraded to Neutral from Sell; target cut to $9.85 from $10.50 (Goldman)
• DroneShield initiated Buy with $1.40 target (Shaw and Partners)
• Duratec initiated Buy with $1.50 target (Shaw and Partners)
• Fisher & Paykel downgraded to Underweight from Neutral; target cut to NZ$23 from NZ$24 (JPMorgan)
• Ingenia Communities upgraded to Overweight from Neutral; target up to $5.50 from $4.80 (JPMorgan)
• Reject Shop downgraded to Overweight from Buy; target cut to $5.80 from $6.0 (Jarden)
• Stanmore Resources initiated Buy with $4.0 target (Citi)
  
  

KEY EVENTS

• Mon 3 June: Newmont (NEM) – $0.268
• Tue 4 June: None
• Wed 5 June: Hancock & Gore (HNG) – $0.01, Infratil (IFT) – $0.017
• Thu 6 June: None
• Fri 7 June: None

• Dividends paid: Dicker Data (DDR) – $).11, Embark Early Education (EVO) – $0.015
• Listing: None

• 11:45 am: China Manufacturing PMI (May)
• 12:00 am: US ISM Manufacturing PMI (May)

This Morning Wrap was written by Kerry Sun.