The Overnight Report: S&P500 Records New High

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The company is included in ASX200, ASX300 and ALL-ORDS

A relatively quiet start to the week from US markets, with the day's rally fading into the close.

The S&P500 did manage to set another all time high just above 6,300.

After a bout of hefty profit taking locally yesterday, ASX200 futures are pointing to a slightly positive start.

World Overnight
SPI Overnight	8660.00	+ 12.00	0.14%
S&P ASX 200	8668.20	– 89.00	– 1.02%
S&P500	6305.60	+ 8.81	0.14%
Nasdaq Comp	20974.17	+ 78.52	0.38%
DJIA	44323.07	– 19.12	– 0.04%
S&P500 VIX	16.65	+ 0.24	1.46%
US 10-year yield	4.37	– 0.06	– 1.35%
USD Index	97.61	– 0.59	– 0.60%
FTSE100	9012.99	+ 20.87	0.23%
DAX30	24307.80	+ 18.29	0.08%

Good Morning,

The ASX200 fell -1.02% or 89pts on Monday, the largest decline since April and almost double what the futures had indicated.

Nine out of eleven sectors weakened with banks down -2.3% followed by consumer discretionary stocks.

The energy sector rose 1.2%. Miners were positive too on speculation of an expected boost to Chinese steel demand from a major dam project. 

China has officially launched plans to build the world’s largest hydropower dam in the Yarlung Tsangpo River basin in Tibet.

What happened overnight: NAB Markets Today Research extract

US equities were up around 0.7% to a fresh record high for much of the session but retraced into the close to leave the S&P500 up just 0.1%. It was a particularly quiet start to the week, with little to drive markets. The Nasdaq gained 0.4%. 

Communication Services led gains on Monday, while energy weighed. In Europe, Stellantis expects a loss in the first half and reported a -25% fall in shipments to North America in the second quarter, but attributed only -EUR300m of the swing in earnings to the impact of tariffs.

Stellantis was 1.5% higher on Monday after initially falling -3.8%. The Euro Stoxx 50 was -0.3% lower.

Earnings are in focus, with over 100 companies in the S&P500 reporting this week, including the first of the Magnificent Seven with Alphabet and Tesla (after the close Wednesday). Of those reporting last week, 83% posted higher-than-expected earnings per share, according to FactSet (above the five-year average of 78%). 

US Treasury Secretary Bessent spoke about negotiations with China, and said “trade is in a good place” and that “we can start talking about other things,” identifying sanctioned Iranian and Russian oil. White House Press Secretary Leavitt said President Trump may issue more unilateral tariff letters before August 1. 

News over the weekend was that EU officials were less optimistic about being able to secure the 10% baseline tariff after an apparent stiffening of President Trump’s position and so were stepping up preparedness for retaliation in the event no deal could be reached.

Yields were generally lower, and the longer end outperformed. US 2yr yields were -1bp lower at 3.86%, while the 10yr slid -4bp to 4.38%. Europe led the rally. German 10yr bund yields were -8bp lower at 2.61% and 10yr gilt yields were 7-bp lower at 4.60%.

The yen led gains against a broadly weaker USD. USDJPY was -0.9% lower at 147.42. Markets had been increasingly braced for a weekend election outcome that saw the ruling coalition lose its majority in the upper house.

Prime Minister Ishiba said he intends to carry on as leader, providing some measure of continuity on fiscal policy and with attempts to secure a trade deal with the US. One caveat to the initial market reaction is thin local markets given a Japanese holiday which saw cash markets closed.

The USD was -0.6% lower on the DXY. The euro 0.5% higher at 1.1689.  AUD was 0.2% higher at 0.6525, spending the past 24 hours in a 0.6498 to 0.6538 range.

NZ Q2 CPI was softer than expected, up 0.5% QoQ, and 2.7% YoY despite strength in food and electricity inflation. Market pricing implies about -21bp of easing for the August RBNZ meeting compared with -16bp ahead of the CPI data.

Commodities update: ANZ Bank Australian Morning Focus

Base metals gained amid a risk-on tone across markets. Early stages of the US’s reporting season have raised hopes of resilience in earnings despite rising costs due to the new tariffs. A weaker USD also boosted investor appetite across the industrial complex. 

Copper rose as concerns mounted that tighter supply of scrap will increase demand for refined metal. President Trump’s trade war with China has seen its imports of US copper scrap fall sharply this year.

After reaching more than 400kt in December, monthly imports fell to less than 150kt by May 2025. Overall imports in the five months to May are down -32.5% YoY.

This has been exacerbated by China’s imposition of a 34% tariff on US scrap imports, which was part of a flurry of retaliatory measures following Trump’s 2 April announcement of double-digit tariffs. 

Iron ore futures extended recent gains amid prospects of additional stimulus measures. Beijing announced it will be proceeding with the CNY1.2trn hydropower project, which promises to deliver a positive economic boost for construction materials such as concrete and steel.

It also triggered hopes the government is returning to its old handbook of fiscal stimulus measures to support economic growth. Sentiment was also supported by the continued push to curb excess competition and overcapacity in the steel industry.

Such moves could have a positive impact on mill margins, which would ultimately lift steel making raw materials such as iron ore. 

Gold pushed higher as prospects of lower interest rates and inflation boosted investor appetite for the precious metal.

Federal Reserve Governor Chris Waller advocated for a rate cut last week, while Governor Michelle Bowman also expressed an openness to a rate reduction. There is also a prevailing theme of limited impact on inflation from Trump’s tariffs. This has seen the USD and Treasury yields fall. 

Crude oil fell amid lingering concerns over demand. European Union envoys are set to meet as early as this week to formalise a plan to respond to a possible no-deal scenario with the US.

The US is now seen to want a near-universal tariff on EU goods higher than 10%, with increasingly fewer exemptions. The trade deal impasse could hurt economic activity and thus crude oil demand.

The market is also unperturbed by the EU’s latest sanctions packages on Russia. The latest measures include a lower price cap for Moscow’s crude. It will be set dynamically at -15% below market rates moving forward, which would see the threshold start off somewhere between US$45US$50/bbl.

However, there is little hope the additional sanctions will ultimately impact Russian energy exports. 

European gas futures fell to their lowest in three weeks on ample supply. Norwegian flows are steady even as maintenance on its giant Troll field was extended by two days.

LNG imports have also been above seasonal norms during the northern hemisphere summer. North Asia LNG prices were steady as recent weakness induced price-sensitive buyers back into the market. 

Corporate news in Australia

-Insignia Financial ((IFL)) warns CC Capital the buyout talks may not result in a deal.

-Brookfield is buying ESR’s 19.9% stake in Cromwell Property group ((CMW)).

-Macquarie Group ((MQG)) is considering the sale of Paraway Pastoral after 17 years for $2.5bn.

-Bell Potter is leading capital raisings for Elsight ($80m) and Amplia.

-Iperionx ((IPX)) went into a trading halt prior to a potential capital raisings after winning a major US defense contract.

-Carnarvon Energy ((CVN)) is investing $100m in Strike Energy ((STX)).

-Seek ((SEK)) is being sued by Employment Hero over blocked platform access.

On the calendar today:

-NZ June Trade Bal

-AU RBA Jul Minutes

-US July Richmond Fed

-US Phil Fed non-mfg

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

Spot Metals,Minerals & Energy Futures
Gold (oz)	3410.77	+ 52.47	1.56%
Silver (oz)	39.24	+ 0.77	2.01%
Copper (lb)	5.64	+ 0.03	0.55%
Aluminium (lb)	1.20	+ 0.00	0.34%
Nickel (lb)	6.93	+ 0.17	2.52%
Zinc (lb)	1.29	+ 0.01	0.72%
West Texas Crude	65.74	– 0.31	– 0.47%
Brent Crude	68.99	– 0.29	– 0.42%
Iron Ore (t)	97.84	+ 0.62	0.64%

The Australian share market over the past thirty days

Index	21 Jul 2025	Week To Date	Month To Date (Jul)	Quarter To Date (Jul-Sep)	Year To Date (2025)
S&P ASX 200 (ex-div)	8668.20	-1.02%	1.47%	1.47%	6.24%

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
APE	Eagers Automotive	Downgrade to Sell from Neutral	UBS
BHP	BHP Group	Downgrade to Neutral from Outperform	Macquarie
BRG	Breville Group	Upgrade to Buy from Neutral	UBS
CYL	Catalyst Metals	Upgrade to Buy from Accumulate	Morgans
DRO	DroneShield	Downgrade to Hold from Buy	Bell Potter
EDV	Endeavour Group	Downgrade to Equal-weight from Overweight	Morgan Stanley
EVN	Evolution Mining	Downgrade to Trim from Hold	Morgans
GOR	Gold Road Resources	Downgrade to Neutral from Buy	UBS
JLG	Johns Lyng	Downgrade to Equal-weight from Overweight	Morgan Stanley
LYC	Lynas Rare Earths	Downgrade to Sell from Hold	Ord Minnett
MCE	Matrix Composites & Engineering	Downgrade to Speculative Hold from Speculative Buy	Bell Potter
QAN	Qantas Airways	Upgrade to Buy from Neutral	Citi

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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