Daily Market Reports | 8:44 AM
This story features WISETECH GLOBAL LIMITED, and other companies. For more info SHARE ANALYSIS: WTC
Buy-the-dip pulled US markets out of the red to slightly positive overnight. A weak USD pushed gold higher even as concerns over the Moody’s debt downgraded eased. Australian futures are pointing to a robust open ahead of the RBA’s cash rate decision.
| World Overnight | |||
| SPI Overnight | 8379.00 | + 68.00 | 0.82% |
| S&P ASX 200 | 8295.10 | – 48.60 | – 0.58% |
| S&P500 | 5963.60 | + 5.22 | 0.09% |
| Nasdaq Comp | 19215.46 | + 4.36 | 0.02% |
| DJIA | 42792.07 | + 137.33 | 0.32% |
| S&P500 VIX | 18.14 | + 0.90 | 5.22% |
| US 10-year yield | 4.48 | + 0.03 | 0.77% |
| USD Index | 100.22 | – 0.73 | – 0.73% |
| FTSE100 | 8699.31 | + 14.75 | 0.17% |
| DAX30 | 23934.98 | + 167.55 | 0.70% |
Good Morning,
Despite JPMorgan CEO Jamie Dimon cautioning on tariffs, inflation and a possible US economic slowdown, for now investors just want to buy any weakness, with United Healthcare, last week’s top loser in the Dow Jones, attracting insider buying.
What happened in Australia on Monday
The selloff in US Treasuries late Friday extended through Asia and Europe after Moody’s downgrade of the US, with the ASX200 closing down -49pts of -0.6% yesterday, ending an eight session positive trend.
Nine of eleven sectors declined with energy stocks the worst hit, followed by materials, including iron ore and lithium miners. Gold producers shares rose.
What happened overnight? Extract NAB Markets Today Research
The US 10-year yield reached high of 4.56% intraday but currently sits around 4.45%.
Equities saw a similar retracement. The S&P500 clawed back earlier losses near -1% to finish 0.1% higher. In contrast, the softer US dollar remains. The USD is down -0.7% on the DXY with losses broad-based across the G10.
The news flow didn’t catalyse much market reaction, but there were a few headlines of interest.
President Trumps “big, beautiful” tax-and-spending bill advanced through the House Budget Committee, paving the way for passage of the legislation as soon as Thursday.
The current proposal would increase projected budget deficits by nearly US$3 trillion through 2034.
Across the pond, Keir Starmer sealed an agreement with European Union leaders that lays the ground for closer collaboration and includes a deal on fishing rights and the removal of most border checks on food and agricultural goods, as well as a pact on military collaboration.
President Trump said Ukraine and Russia would begin talks “immediately” on ending their war following a phone call with Putin.
FOMC speakers overnight included Williams, Bostic, and Jefferson.
The throughline of their comments is a wait and see approach given elevated uncertainty.
Williams described policy as slightly restrictive’ and said, “It’s not going to be that in June we’re going to understand what’s happening here, or in July.”
Bostic said, “I think we’ll have to wait three to six months to start to see where this settles out.” And signalled some concern with the evolution of consumer inflation expectations. “Given the trajectory of our two mandates, our two charges, I worry a lot about the inflation side, and mainly because we’re seeing expectations move in a troublesome way.”
There was little reaction in market pricing, with markets having already moved in that direction. -9bps of cuts are priced by July and -22bps for September. 2 weeks ago, ahead of the tariff pause with China, pricing was -24bp for July.
China’s monthly activity data were mixed relative to expectation but showed a slowing in April. Industrial production rose 6.1% from a year ago, above consensus for 5.7%, but still down from 7.7% in March in the face of external demand headwinds. Retail sales were softer than expected and the boost for sales of certain goods from the trade-in scheme slowed a little from the March. The tariff pause helps, but the outlook remains challenging amid given sluggish domestic demand and a more challenging external demand environment.
Coming Up
The RBA is widely expected to deliver a -25bps cut to 3.85% at its meeting today, which is fully priced by markets.
The meeting includes SoMP forecast updates and will be followed by the usual press conference.
NAB’s view is that a deterioration in the global backdrop would see the RBA move more quickly, starting with a -50bp today, to both offset downward pressure on the outlook for growth and inflation and to better position policy for a shifted balance of risks.
NAB continues to assess the RBA needs to get to neutral, a policy rate in the low 3s, relatively quickly but the risk quite clearly sits with slower path of easing.
While the scale of the trade policy shock remains highly uncertain and is a moving target, it has receded somewhat with scaled back direct tariffs and with financial and confidence channels retreating as acute concerns relative to a few weeks ago.
Commodities in focus: Extract ANZ Bank, Australian Morning Focus
Crude oil edged higher as the market focused on geopolitical risks.
President Trump said that Ukraine and Russia would begin talks immediately on ending their war after a phone call with President Putin.
Despite the supposed move towards peace, the two sides remain far apart, and an imminent deal remains unlikely.
Trump made no immediate threat of sanctions on Russia, but European leaders urged him to impose new penalties if Putin rejected the demand for a full and unconditional ceasefire.
Uncertainty over a deal with Iran also added volatility to the oil market. Rhetoric between the US and Iran has intensified in recent days.
Iran’s Supreme Leader Ayatollah Ali Khamenei lashed out at Trump, accusing him of dishonesty and power abuse.
President Pezeshkian said that Tehran won’t abandon its pursuit of civilian nuclear energy under any circumstance.
The geopolitical backdrop also kept gas markets on edge. European gas futures edged higher amid expectations of little progress on peace negotiations between Russia and Ukraine.
This comes as European officials look to break their reliance on Russia for gas supplies. Last week it announced a plan that envisages a ban on all new contracts and a halt to existing deals on the spot market, which make up a third of Russian gas flows to the bloc.
More immediately, traders are concerned that they may struggle to obtain enough gas to refill storage facilities that were heavily drawn down by the end of the northern winter.
In recent weeks, LNG cargoes have been diverted away from Asia amid a temporary slump in demand. However, new buyers are emerging, many of whom are uncontracted.
This could see increasing demand for imports into countries such as Thailand, Vietnam and Philippines.
Aluminium fell amid signs of weak demand. Readily available inventories in London Metal Exchange warehouses rose by 92,950t to 343.1kt, the biggest jump in more than a year.
The increase came as metal that had been ordered for withdrawal from warehouses in Malaysia was placed back on warrant.
This often occurs when adverse price moves expose stockholders to losses on the LME. Inventories in China have also fallen more than -30% over the past two months, according to data from SMM International.
Sentiment wasn’t helped by data showing China’s aluminium output rose to a record high of 3.75mt in April. This was up 4.2% year-on-year.
Rising inventories also created headwinds for nickel prices. Stockpiles rose 8,166t to 183.4kt, the biggest jump in tonnage since 2021.
Copper managed to buck the trend and end the session higher.
A weaker USD helped boost investor appetite. Traders are also wary of trade dislocations amid the US-China trade war.
Chinese buyers are scrambling to import copper scrap from the US following the pause on reciprocal tariffs. Stockpiles of the material have been building since the trade war erupted.
Gold gained as the USD tumbled after Moody’s Ratings stripped the US of its last top credit rating due to ballooning deficits. The situation could get worse, with Republican lawmakers discussing a tax and spending package from Trump that could add trillions more to federal debt over the coming decade. This helped offset a lull in haven buying amid easing geopolitical risks.
The View: Extract from Stephen Innes, SPI Investment Management
After last week’s 5% melt-up, U.S. equities took a breather, call it a strategic timeout rather than a reversal. Monday opened with no real data, no major catalysts, and a Moody’s downgrade still echoing across the weekend wires. But let’s be honest: this wasn’t panic, it was portfolio indigestion.
The tape felt like traders were forced to chew through stale headlines on a slow Monday menu.
And yet, despite the weekend Fear, Uncertainty, Doubt (FUD) and doomscrolling, the S&P erased a -0.75% drop like it never happened.
Mag7 lagged, but the real story was in the broader tape; S&P493 holding flat while cash buyers soaked up the dip.
The downgrade? A nothingburger with fries. Traders rightly saw it as a backward-looking slap, a ratings agency finally catching up to what the bond market’s been screaming about for months.
By the time the U.S. cash session kicked off, it was clear: this wasn’t a crisis, it was a re-entry point.
And then there’s the “fear of the right-tail.” Nomura’s right, this is the first time in a while we’re seeing real call skew distortion. Dealers are short upside. Clients are chasing late. Everyone missed the move, and now it’s panic-bid.
The pain trade now is higher, faster, dumber, and under-owned.
But don’t get comfortable.
A monster calendar lurks just beneath the surface: looming tariff deadlines, debt ceiling brinkmanship, and a Fed still pricing in two cuts for 2025 and another two in 2026; a soft landing fantasy built on sand. If these tariffs land harder as Trump hinted in Abu Dhabi and Bessent warned for those refusing to negotiate in good faith, global capital flows won’t just flinch, they’ll bolt.
And if the “China model” of hardball negotiations goes viral, we’re staring down a global trade war dressed up as policy reform.
In other words, the path of least resistance is still higher faster until it all comes crashing down, rinse, repeat.
Corporate news in Australia
-Scolttish investment firm Baillie Gifford, a backer of Elon Musk’s Tesla, has taken built up a 5% shareholding in WiseTech Global ((WTC)).
-Helloworld Travel ((HLO)) and BGH Capital are assessing the merger of stakes in Webjet Group ((WJL)) to take the company private.
-Light & Wonder ((LNW)) is assessing more M&A activity and a primary ASX listing.
-Spark New Zealand ((SPK)) is being reviewed by two private equity firms for a possible buyout.
-AustralianSuper has re-invested in Whitehaven Coal ((WHC)), claiming the holding is consistent with its commitment to net zero emissions by 2050.
On the calendar today:
-AU RBA rate decision
-EZ March ECB CA
-US Phil Fed non-manufacturing
-LIGHT & WONDER INC ((LNW)) investor briefing NY
-TECHNOLOGY ONE LIMITED ((TNE)) earnings report
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 3234.17 | + 46.97 | 1.47% |
| Silver (oz) | 0.00 | 0.00 | 0.00% |
| Copper (lb) | 4.66 | + 0.07 | 1.51% |
| Aluminium (lb) | 1.11 | – 0.02 | – 1.64% |
| Nickel (lb) | 6.95 | – 0.06 | – 0.81% |
| Zinc (lb) | 1.21 | – 0.01 | – 0.63% |
| West Texas Crude | 62.11 | + 0.21 | 0.34% |
| Brent Crude | 65.50 | + 0.09 | 0.14% |
| Iron Ore (t) | 100.00 | – 0.08 | – 0.08% |
The Australian share market over the past thirty days
| Index | 19 May 2025 | Week To Date | Month To Date (May) | Quarter To Date (Apr-Jun) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8295.10 | -0.58% | 2.08% | 5.76% | 1.67% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| CQR | Charter Hall Retail REIT | Downgrade to Neutral from Outperform | Macquarie |
| CRN | Coronado Global Resources | Downgrade to Neutral from Buy | UBS |
| IAG | Insurance Australia Group | Downgrade to Neutral from Buy | UBS |
| ILU | Iluka Resources | Upgrade to Buy High Risk from Neutral High Risk | Citi |
| JDO | Judo Capital | Upgrade to Neutral from Sell | Citi |
| LAU | Lindsay Australia | Upgrade to Add from Hold | Morgans |
| LLC | Lendlease Group | Upgrade to Buy from Neutral | Citi |
| NWH | NRW Holdings | Upgrade to Buy from Buy/High risk | Citi |
| TWE | Treasury Wine Estates | Downgrade to Neutral from Outperform | Macquarie |
| XRO | Xero | Upgrade to Add from Hold | Morgans |
For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.
All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website. Click here. (Subscribers can access prices on the website.)
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CHARTS
For more info SHARE ANALYSIS: HLO - HELLOWORLD TRAVEL LIMITED
For more info SHARE ANALYSIS: LNW - LIGHT & WONDER INC
For more info SHARE ANALYSIS: SPK - SPARK NEW ZEALAND LIMITED
For more info SHARE ANALYSIS: TNE - TECHNOLOGY ONE LIMITED
For more info SHARE ANALYSIS: WHC - WHITEHAVEN COAL LIMITED
For more info SHARE ANALYSIS: WJL - WEBJET GROUP LIMITED
For more info SHARE ANALYSIS: WTC - WISETECH GLOBAL LIMITED