The Overnight Report: Run, Baby, Run

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World Overnight
SPI Overnight	8035.00	+ 55.00	0.69%
S&P ASX 200	7999.30	– 18.30	– 0.23%
S&P500	5667.20	+ 35.98	0.64%
Nasdaq Comp	18509.34	+ 36.77	0.20%
DJIA	40954.48	+ 742.76	1.85%
S&P500 VIX	13.19	+ 0.07	0.53%
US 10-year yield	4.17	– 0.06	– 1.47%
USD Index	104.24	– 0.02	– 0.02%
FTSE100	8164.90	– 18.06	– 0.22%
DAX30	18518.03	– 72.86	– 0.39%

Good morning.

The magic words in and around US share markets this week are ‘Trump’, ‘rate cuts’ and ‘broadening of the rally’.

US reporting season is taking off on a positive footing with all of Caterpillar, UnitedHealth, Bank of America and Morgan Stanley pleasing investors and being rewarded for it.

Shares in the likes of Nvidia and Microsoft closed lower, indicating money rotating out of trusted winners into resurgent laggards.

European share markets fell on Tuesday as commodity linked stocks tracked declining prices and luxury brands weakened following a disappointing outlook by Hugo Boss.

The potential for wealth taxes in France is also weighing on general sentiment.

In US economic data, retail sales were flat in June, import prices were unchanged in June with export prices down -0.5%. Business inventories rose 0.5% in May. The NAHB housing market index fell from 43 in June to 42 in July.

NAB economists this morning: “Significantly stronger than expected US June Retail sales has seen analysts and Nowcasters’ rushing to lift their estimates of Q2 GDP growth to an above trend 2% or stronger but bond markets aren’t taking notice with the US Treasury curve undertaking bullish flattening and money market still more than fully discounting a 25-point September first rate cut and more chance of three than two cuts this year.”

The Canadian CPI  release showed the average of the two core (mean and median) measures fell by -0.1% to 2.75%, as expected.

US government bond yields fell on Tuesday as investors reportedly balanced the likelihood of an impending US Federal Reserve interest rate cut against possibly inflationary policies if Donald Trump wins the November US presidential election.

Yields pared losses after better than expected US retail sales data for June. The US 10 year Treasury yield fell -7 points to 4.16% and the US 2 year Treasury yield fell -3 points to 4.42%.

In commodities, WTI and Brent crudes weakened both more than US$1 and in metals, aluminium gained 2.3% and copper 1.5%.

Gold has recovered some of its recent losses to be US$47 higher at US$2,469.

SPI futures are indicating the local market is ready to continue the positive sentiment.

On the calendar today:

In Australia:

-building activity data
-RBA official John Simon speaks
-BHP Group ((BHP)) releases an operational review

Elsewhere:

-New Zealand Consumer Price Index (CPI)
-US industrial production
-US housing starts
-US building permits
-US Fed’s Beige Book

US reporting season Q2:

-Alcoa
-Johnson & Johnson
-United Airlines
-ASM Lithography
-US Bancorp
-Steel Dynamics, among others

Corporate news in Australia

-short sellers are reportedly targeting DroneShield ((DRO))

-Shareholders approve acquisition of Genex Power ((GNX))

-ANZ Bank ((ANZ)) has suspended two traders while investigations continue into misconduct in the markets division

-Labyrinth Resources ((LRL)) is purchasing the Vivien gold project in WA from Ramelius Resources ((RMS))

Spot Metals,Minerals & Energy Futures
Gold (oz)	2473.00	+ 46.00	1.90%
Silver (oz)	31.49	+ 0.17	0.54%
Copper (lb)	4.46	– 0.06	– 1.23%
Aluminium (lb)	1.09	– 0.02	– 1.79%
Nickel (lb)	7.53	– 0.01	– 0.17%
Zinc (lb)	1.30	– 0.02	– 1.87%
West Texas Crude	79.76	– 1.13	– 1.40%
Brent Crude	83.75	– 1.52	– 1.78%
Iron Ore (t)	109.39	+ 0.28	0.26%

The Australian share market over the past thirty days

Index	16 Jul 2024	Week To Date	Month To Date (Jul)	Quarter To Date (Jul-Sep)	Year To Date (2024)
S&P ASX 200 (ex-div)	7999.30	0.50%	2.98%	2.98%	5.38%

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
AOF	Australian Unity Office Fund	Downgrade to Accumulate from Buy	Ord Minnett
KLS	Kelsian Group	Upgrade to Buy from Hold	Ord Minnett
WDS	Woodside Energy	Upgrade to Neutral from Sell	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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