Daily Market Reports | Jul 02 2025
This story features HMC CAPITAL LIMITED, and other companies. For more info SHARE ANALYSIS: HMC
The company is included in ASX200, ASX300 and ALL-ORDS
Nasdaq and the S&P500 took a breather as traders scooped up stocks in the Dow Jones and other underperformers.
The ASX200 index futures are tipping a more robust start after a lackluster first day of the FY26 financial year.
| World Overnight | |||
| SPI Overnight | 8559.00 | + 19.00 | 0.22% |
| S&P ASX 200 | 8541.10 | – 1.20 | – 0.01% |
| S&P500 | 6198.01 | – 6.94 | – 0.11% |
| Nasdaq Comp | 20202.89 | – 166.85 | – 0.82% |
| DJIA | 44494.94 | + 400.17 | 0.91% |
| S&P500 VIX | 16.83 | + 0.10 | 0.60% |
| US 10-year yield | 4.25 | + 0.02 | 0.50% |
| USD Index | 96.31 | – 0.09 | – 0.09% |
| FTSE100 | 8785.33 | + 24.37 | 0.28% |
| DAX30 | 23673.29 | – 236.32 | – 0.99% |
Good Morning,
The big rotation was on last night in US markets. Top performers like BIgTech were sold off while the punters moved into laggards like casino and housing stocks.
What happened overnight: Extract NAB Markets Today Research
US equity markets began July on a steady note, with the S&P500 consolidating near record highs and little changed on the day.
US treasury yields rose, particularly at the front end, following stronger-than-expected JOLTS job openings data. Trumps One Big Beautiful Bill (OBBB) passes the Senate, but now phases resistance from House Republicans. The USD rebounded from multi year low while moves within G10 pairs were relatively subdued.
President Trump’s US$3.3trn tax and spending bill passed the Senate, combining US$4.5 trillion in tax cuts with US$1.2 trillion in spending reductions. The Congressional Budget Office estimates the bill will increase the deficit by US$3.3trn over the next decade, but critics would note these estimates do not include revenue from tariffs while GDP growth assumptions are seen as conservative by some (1.8% trend growth).
Others note the cost of funding is unrealistic, given an assumed average US Treasury yield of 3.5% and the expected increase in issuance. The legislation includes debt limit increases, cuts to Medicaid, and expanded tax breaks.
The Bill now heads back to the House where moderate and ultra-conservative GOP lawmakers have already expressed disapproval. House Speaker Mike Johnson can only afford to lose three Republican votes, and with unified Democratic opposition, the bill’s passage before President Trump’s July 4 deadline and in its current form looks uncertain.
Speaking at the ECB Forum in Sintra, Portugal, Fed Chair Powell reiterated a cautious stance noting the Fed would have cut rates further this year if not for tariff uncertainty. He did not rule out a July rate cut, emphasizing a data-dependent approach.
The ISM manufacturing index edged up to 49.0 in June, reflecting easing supply-side disruptions. However, new orders remained weak and input costs elevated, with the prices paid index rising to 69.7. The employment index fell to 45.0, indicating continued softness in hiring. I won’t say the word, but the report left a chill of concern over slowing activity ahead combined with higher price pressures.
The US Treasury curve bear flattened with front end yields leading the move up. The 2yr climbed 5.5bps to 3.776%, 10-year treasuries had dipped below 4.2% earlier in the session before reversing higher to 4.248% currently. The 2y/10y curve flattened to 47bp. European bond markets closed lower in yield. Gilts were supported by comments by Bank of England Governor Bailey who said the bank was considering reducing the pace of quantitative tightening.
The S&P500 recorded its first (modest) day of decline following three days of consecutive gains. Most sectors gains but big tech was the under-performer with Tesla down -5% while a gauge of the “Magnificent Seven” megacaps lost -1.3%.
Musk fired off a few X posts disapproving of the OBBB Senate passage, only for President Trump to threaten to withdraw subsidies from Elon Musk’s companies and examine the billionaire’s immigration status. Small caps on the other hand had a positive day with the Russell 2000 up 1.3% while the Nasdaq was -0.82%. Earlier in the session the EuroStoxx 6oo slipped -0.21%.
The US dollar rebounded from multi-year lows, supported by higher front-end yields. The USD DXY index traded down to an overnight low of 96.377 before recovering post the better-than-expected JOLTS report, ending the day down -0.24% and now at 96.662.
The euro held steady after euro-zone inflation was in line with consensus estimates at 2%. Absolute moves in G10 currencies have been small since the local close yesterday. The AUD starts the new day at 0.6580, after trading to an overnight and fresh year-to-date high of 0.6590.
USD/JPY tested levels below 143 overnight but the move up in UST yields lifted the pair and now trades at 143.4188. Yesterday, we learned Japan’s Tankan survey of large manufacturers was stronger than expected and suggests exporters are holding up well despite pressure from US trade policy.
Within the survey, price related indicators are consistent with the Bank of Japan’s 2% target. The central bank has been cautious about the impact of tariffs and is expected to leave rates unchanged at the end-July meeting according to market pricing. Speaking in Portugal, BoJ Governor Ueda reiterated his message that he is going to wait for additional data to make a judgment on the next monetary policy decision, signaling that he’s in no rush to raise borrowing costs.
Finally on Tariffs news, President Trump said he is not considering delaying his July 9 deadline for higher tariffs to resume and renewed his threat to cut off talks and impose duty rates on several nations, including Japan.
ANZ Bank Morning Focus, Commodity Update
Crude oil prices edged up on renewed tension in the Middle East. The location of Iran’s 409kg of highly enriched uranium is unknown, after the International Atomic Energy Agency lost track of it five days into the conflict.
Iranian nuclear safety regulators have also stopped taking calls from the IAEA. The blackout raises the spectre that Iran is using silence to obscure international understanding of the status of its nuclear program. President Trump said the US will be there unless Iran backs away from its nuclear program.
This took the focus away from the meeting between OPEC and its allies. Key members are said to be open to considering another 411kb/d increase for August, according to a Bloomberg report. It would be the fourth month in a row the group has agreed to such a large increase in output. A Bloomberg survey showed Saudi Arabia, Kuwait and the UAE led a surge in crude exports from the Middle East in June, with the three nations loading 11.9mb/d onto tankers.
Saudi Arabia’s exports were the fastest pace in over a year. However, Russia’s crude shipments remained near a two-month low, with a 1% increase in the four weeks to 29 June.
European gas prices rallied as a heat wave boosted energy consumption for cooling. The hot weather that has gripped Europe is set to peak over the coming days, triggering red alerts from Spain to the Swiss Alps. In France, nuclear reactors have curbed generation, straining on the electricity grid.
Higher than normal temperatures have also been recorded in Asia. This could tighten the market for LNG shipments, with Europe now heavily reliant on that market as piped gas from Russia has stopped. However, the tightness may be alleviated by additional supply, as Shell reported exports from Canada’s first LNG project will start this week.
Copper rose to a three-month high due to signs of stronger demand in China. An improvement in Chinese manufacturing last month suggests the world’s top copper consumer is benefiting from the truce in the US-China trade war. The Caixin manufacturing PMI rose to 50.4 from 48.3 in May. That was well above market expectations. This comes after the official manufacturing PMI rose to 49.7, exceeding market expectations.
Among factories, the new orders index expanded for the first time in three months. The surveys offer the first full month snapshot of China’s economic health after Beijing and Washington agreed to reduce tariffs for 90 days. US Treasury Secretary Scott Bessent said Washington’s negotiations with Beijing will focus first on reciprocal tariffs, and only later duties on copper and other raw materials. A delayed decision on tariffs would justify a premium on US copper, giving traders more time to ship metal before levies take effect.
Iron ore futures were steady despite ongoing concerns of weakness in the property sector. Data earlier this week showed China’s home sales extended their slump in June, falling -23% YoY. However, further weakness could be imminent after the China Iron & Steel Association proposed restrictions on exports of certain steel products. This could keep more steel within China, weighing on prices of the alloy.
Gold pushed higher as Trump’s tax bill passed the Senate, raising the likelihood of bigger US deficits. Gains were pared late in the session after US jobs data came in hotter than expected, reducing the outlook for monetary easing.
Corporate news in Australia
-HMC Capital ((HMC)) has reversed on its $2bn renewable energy strategy, delayed a major acquisition and replaced its energy transition chief.
-Downer EDI ((DOW)) has sold its Keoilis JV stake for $132m and won a $200m Ausnet contract.
-The Reject Shop ((TRS)) is delisting after the Dollarama takeover for $253m is approved.
On the calendar today:
-AU May Building approvals
-AU May retail sales
-US June ADP employment
-GRAINCORP LIMITED ((GNC)) ex-div 24.00c (100%)
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 3351.30 | + 36.35 | 1.10% |
| Silver (oz) | 36.05 | + 0.05 | 0.14% |
| Copper (lb) | 5.10 | + 0.04 | 0.88% |
| Aluminium (lb) | 1.18 | + 0.00 | 0.02% |
| Nickel (lb) | 6.79 | – 0.03 | – 0.37% |
| Zinc (lb) | 1.23 | – 0.02 | – 1.31% |
| West Texas Crude | 65.60 | + 0.62 | 0.95% |
| Brent Crude | 67.26 | + 0.65 | 0.98% |
| Iron Ore (t) | 93.41 | – 1.06 | – 1.12% |
The Australian share market over the past thirty days
| Index | 01 Jul 2025 | Week To Date | Month To Date (Jul) | Quarter To Date (Jul-Sep) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8541.10 | 0.32% | -0.01% | -0.01% | 4.68% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| AMC | Amcor | Upgrade to Buy from Neutral | UBS |
| AZJ | Aurizon Holdings | Upgrade to Outperform from Neutral | Macquarie |
| Downgrade to Hold from Accumulate | Morgans | ||
| LYC | Lynas Rare Earths | Downgrade to Hold from Accumulate | Ord Minnett |
| MPL | Medibank Private | Upgrade to Overweight from Equal-weight | Morgan Stanley |
| NHF | nib Holdings | Upgrade to Buy from Neutral | UBS |
| REH | Reece | Upgrade to Buy from Accumulate | Ord Minnett |
| Downgrade to Hold from Buy | 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.)
(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author’s and not by association FNArena’s – see disclaimer on the website)
All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts on the website and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.
Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com
FNArena is proud about its track record and past achievements: Ten Years On
Click to view our Glossary of Financial Terms
CHARTS
For more info SHARE ANALYSIS: DOW - DOWNER EDI LIMITED
For more info SHARE ANALYSIS: GNC - GRAINCORP LIMITED
For more info SHARE ANALYSIS: HMC - HMC CAPITAL LIMITED
For more info SHARE ANALYSIS: TRS - REJECT SHOP LIMITED