Daily Market Reports | 8:44 AM
This story features JAMES HARDIE INDUSTRIES PLC, and other companies. For more info SHARE ANALYSIS: JHX
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS
Another day, another record for the S&P500 and Nasdaq with Nvidia only -4% away from a US$4trn market cap (mind boggling) for a shortened trading week ahead of the July 4 holiday.
The ASX200 closed at a record high yesterday as major banks upped expectations of an RBA cash rate cut next Tuesday. Futures are suggesting a softer start for Thursday.
| World Overnight | |||
| SPI Overnight | 8581.00 | – 17.00 | – 0.20% |
| S&P ASX 200 | 8597.70 | + 56.60 | 0.66% |
| S&P500 | 6227.42 | + 29.41 | 0.47% |
| Nasdaq Comp | 20393.13 | + 190.24 | 0.94% |
| DJIA | 44484.42 | – 10.52 | – 0.02% |
| S&P500 VIX | 16.64 | – 0.19 | – 1.13% |
| US 10-year yield | 4.29 | + 0.04 | 0.99% |
| USD Index | 96.44 | + 0.14 | 0.14% |
| FTSE100 | 8774.69 | – 10.64 | – 0.12% |
| DAX30 | 23790.11 | + 116.82 | 0.49% |
Good Morning,
Another day of more records witth participants ignoring any potential tariff or geopolitical risks, as the 90-day tariff pause ends on July 8, looming over the Trump Administration and markets.
What happened overnight, NAB Markets Today Research
A soft ADP Jobs report initially saw equities and short-end yields lower, though that has turned around, with Trump announcing a trade deal with Vietnam, a support for sentiment.
The S&P500 traded 0.5% higher, and the dollar was little changed after retracing earlier strength. UK market moves are more interesting, with fiscal concerns in the spotlight.
On trade, President Trump posted on social media the US and Vietnam have struck a deal that would result in 20% tariffs on Vietnamese imports to the US (compare the original 46% tariff announced in April) and a higher 40% rate for goods that passthrough Vietnam to address transhipment. Hanoi is yet to confirm the deal.
Separately, Trump said he won’t extend next week’s deadline to resume higher tariffs, called Japan “spoiled” and said he doubts they will make a deal, and threatened tariffs of “30%, 35% or whatever the number is that we determine”. Some trade negotiations are proving more intractable, including with Japan.
ADP Payrolls has a poor record as a predictor of the official payrolls data but got some attention earlier in the session with a second consecutive sizable downside surprise. The ADP report showed a -33k decline in jobs, against consensus for additional 100k, and the first decline since March 2023.
Recent weakness in health and education employment in particular is at odds with recent Payrolls outcomes. ADP chief economist said, “though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month.” The data for June followed stability in JOLTs indicators for May out earlier in the week.
Payrolls is the focus tonight, where consensus is for a 110k payrolls gain and a slight lift in the unemployment rate to 4.3%. It would take more than that to dent FOMC members comfort the labour market is resilient enough to wait beyond July for more clarity on inflation and the outlook. CPI data on 15 July are also important. There are -6bps cuts priced for July and -65bps cuts priced by year-end, similar to what was priced a week ago.
The One Big Beautiful Bill is back in front of the House as Trump’s self-imposed 4 July deadline approaches. A procedural vote remains stuck with some Republican holdouts yet to vote at the time of writing.
Elsewhere, UK gilts sold off on fiscal concerns, the latest reminder that concerns about fiscal trajectories and financing needs is a phenomenon broader than just the US. 10yr gilt yields were 16bp higher to 4.61%, their highest since 9 June.
Prime Minister Starmer refused to say whether Chancellor Reeves would remain in her post. That followed recent plans to abandon parts of its welfare reforms bill that were intended to save -GBP5bn.
The selloff in gilts spilled over into European bonds, with German bund yields 9bps higher, though Treasuries were more insulated. US 10yr yields were 4bps higher at 4.28%. 2yr US yields briefly spiked -4bps lower to 3.75% but ended the day back near their intraday highs, 2bps higher at 3.79%.
The pound was the clear underperformer in FX, down -0.8% against the USD and against the EUR, GBP. Currency moves were much more muted elsewhere, as earlier USD strength was largely unwound alongside the improvement in risk sentiment through the US session. The USD is unchanged on the DXY. The AUD had traded down to an intraday low of 0.6546 but recovered alongside the rally back in US equities to be 0.1% higher over the day at 0.6586.
In equity markets, the S&P500 clawed its way back to a 0.5% gain after opening lower on the soft ADP data. The Nasdaq was 0.9% higher. Big tech fuelled gains and Tesla rose 5% after the -13.5% drop in sales in Q2 was seen as better than feared. Nike and Lululemon rose, supported by the trade pact with Vietnam. Microsoft is reportedly laying off -9,000 workers companywide in its second wave of cuts this year.
Elsewhere, equity markets were mostly positive yesterday. The Eurostoxx 50 was 0.7% higher, although the Nikkei lost -0.6%.
Locally, retail sales data disappointed expectations for a rebound in May, with a bounce back in clothing spending not enough to offset weakness elsewhere, notably in food retailing. Retail sales can be volatile and is set to be discontinued next month, with a further update on consumer momentum due in the household spending indicator Friday.
We aren’t updating our consumer assessment much on the data, but it should keep the RBA alert to the risk that consumption growth undershoots even its downgraded May forecast.
Seemingly Unconcerned Ahead of Jobs: Extract Steve Sosnick, Interactive Brokers
This trading week in the US is short but potentially consequential. This year, Independence Day (July 4th) falls on a Friday, and furthermore, US stock exchanges close at 1PM Thursday EDT, ahead of the three-day weekend. But there are some consequential numbers to be digested before those of us who are not already on vacation scoot away for the holiday. The June Employment report arrives tomorrow at 8:30 EDT.
Although the market climate clearly is rather sanguine right now, some investors are at least feigning concern about the condition of the labor economy. Remember, maximum sustainable employment along with price stability is half of the Federal Reserve’s dual mandate. The unemployment rate has been gently rising over the past several months, but it remains nearer to historic lows than highs.
The combination of modestly higher unemployment yet at a historically low level must offer some difficulty for the FOMC. When must they consider we have moved far enough away from their goal before they need to adjust monetary policy?
Over the past two days, we have received somewhat conflicting reports about labor. Yesterday, we learned that JOLTS job openings unexpectedly rose to 7.769 million, well ahead of the 7.3 million consensus estimate and last month’s revised 7.395 million. Longer term the decline from the post-covid peak in openings seems to have taken a modest pause, albeit above levels that prevailed prior to the pandemic:
This morning, however, the ADP Employment Change for June was a bit of a shock. It showed a decline of -33,000, far below the 98k gain that was expected and last month’s adjusted +29k. We saw futures dip briefly, though stocks recovered after a combination of Tesla’s worse-than-expected sales report (no, that is not typo the stock rallied up 4%) and reports of a trade deal with Vietnam.
A big decline on ADP was never really in the cards anyway, the market understands it is at best an imperfect harbinger of the Nonfarm Payrolls data, though that was the first monthly decline since March 2023’s -53k reading.
In theory, we might expect some market concern ahead of a number that could have a major influence on monetary policy. In practice, not really.
Consensus expectations are for an unemployment rate of 4.3%, up from last month’s 4.2%. That jibes with the readings on IBKR Forecast Trader, which show a 69% YES for a rate above 4.2% and a 79% NO for a rate above 4.3%. Nonfarm Payrolls are expected to increase by 110k, with 58% saying YES to a reading above 108,700 on ForecastTrader.
Perhaps the solid consensus is what is leading options expiring tomorrow on the S&P500 (SPX) to show a pronounced upward bias. (Heck, that’s what we’ve seen for weeks, so why stop now?) The IBKR Probability Lab shows a peak outcome of 6235-6240, above the current 6217 level.
Finally, we’d like to take a look at the Cboe Volatility Index (VIX) and it’s 9-day counterpart VIX9D. Neither is showing much concern either about events in the near-term, such as the employment report, the expiration of the tariff moratoria, or the mid-month arrival of earnings season.
It is likely that VIX9D is somewhat depressed by the fact that we are “missing” one-and-a-half trading days during its calculation, but it nonetheless shows a general lack of demand for hedging protection. We’ll know tomorrow if that proved appropriate.
Corporate news in Australia
-James Hardie Industries ((JHX)) has finalised the Azek acquisition including the addition to the board.
-Speculation is rising of a possible takeover of Domino’s Pizza Enterprises ((DMP)) by the US parent or another global franchise as Chairman Jack Cowin takes control.
-Westpac ((WBC)) is considering the sale of KiwiSaver for $9.3bn as part of asset rationalisation.
-Qantas Airways ((QAN)) announced up to 6m customer details were exposed to a cyber attack.
-Helia Group ((HLI) is reviewing its business strategy after losing ING as client
On the calendar today:
-AU May Trade Bal
-US June ISM Services
-US June NFPs
-US June Unemployment
-US May Trade Bal
-XX Global PMIs
-ALS LIMITED ((ALQ)) ex-div 19.70c (30%)
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 3367.35 | + 16.05 | 0.48% |
| Silver (oz) | 36.43 | + 0.38 | 1.05% |
| Copper (lb) | 5.20 | + 0.10 | 1.94% |
| Aluminium (lb) | 1.19 | + 0.01 | 0.81% |
| Nickel (lb) | 6.84 | + 0.05 | 0.80% |
| Zinc (lb) | 1.25 | + 0.02 | 1.44% |
| West Texas Crude | 67.44 | + 1.84 | 2.80% |
| Brent Crude | 69.07 | + 1.81 | 2.69% |
| Iron Ore (t) | 95.13 | + 1.72 | 1.84% |
The Australian share market over the past thirty days
| Index | 02 Jul 2025 | Week To Date | Month To Date (Jul) | Quarter To Date (Jul-Sep) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8597.70 | 0.98% | 0.65% | 0.65% | 5.38% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ARF | Arena REIT | Upgrade to Buy from Accumulate | Ord Minnett |
| CIP | Centuria Industrial REIT | Downgrade to Hold from Accumulate | Ord Minnett |
| DXS | Dexus | Upgrade to Accumulate from Hold | Ord Minnett |
| HMC | HMC Capital | Upgrade to Buy from Hold | Ord Minnett |
| LOV | Lovisa Holdings | Downgrade to Hold from Buy | Bell Potter |
| LYC | Lynas Rare Earths | Downgrade to Hold from Accumulate | Ord Minnett |
| MPL | Medibank Private | Upgrade to Overweight from Equal-weight | Morgan Stanley |
| Downgrade to Neutral from Buy | UBS | ||
| MTO | Motorcycle Holdings | Upgrade to Buy from Accumulate | Morgans |
| NHF | nib Holdings | Upgrade to Buy from Neutral | UBS |
| PPT | Perpetual | Upgrade to Buy from Neutral | UBS |
| PTM | Platinum Asset Management | Upgrade to Neutral from Sell | UBS |
| QBE | QBE Insurance | Downgrade to Neutral from Outperform | Macquarie |
| REH | Reece | Upgrade to Buy from Accumulate | Ord Minnett |
| Downgrade to Hold from Buy | Morgans | ||
| SUN | Suncorp Group | Downgrade to Hold from Accumulate | Ord Minnett |
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: ALQ - ALS LIMITED
For more info SHARE ANALYSIS: DMP - DOMINO'S PIZZA ENTERPRISES LIMITED
For more info SHARE ANALYSIS: JHX - JAMES HARDIE INDUSTRIES PLC
For more info SHARE ANALYSIS: QAN - QANTAS AIRWAYS LIMITED
For more info SHARE ANALYSIS: WBC - WESTPAC BANKING CORPORATION