ASX 200 Futures: Trading 144 points lower, down 1.81% as of 8:30 am AEST.
Brace for a challenging day – Major US benchmarks closed lower overnight due to disappointing manufacturing and employment data, sparking recession concerns. Intel (NASDAQ:INTC) announced layoffs affecting over 15% of its workforce, or 20,000 employees. Meanwhile, Meta Platforms (META) exceeded earnings expectations and projected strong Q3 results. The Bank of England cut rates by 25 basis points as anticipated. This morning, keep an eye on uranium, copper, and lithium stocks.
Overnight Markets:
Major US benchmarks shifted to risk-off mode, closing near session lows.
- Russell 2000: Experienced its worst session since February.
- Semiconductors: Suffered their worst session since March 20, with Nvidia (NVDA) down 6.6%.
Overnight Earnings Themes:
Key themes included increased capex among big tech, weak demand from China, consumer headwinds, improving advertising trends, and a focus on cost-cutting.
Growth Fears:
Weaker-than-expected US labor and manufacturing data, along with commentary on consumer softness during earnings calls, heightened recession concerns.
ASX Today:
- Block Inc. (ASX:SQ2): Reported Q2 adjusted EBITDA of US$759 million, beating the consensus of $689 million. Q3 and full-year guidance also surpassed expectations.
- Pinnacle Investment Management (ASX:PNI): Reported FY24 NPAT of $90.4 million, exceeding the consensus of $81.7 million, and issued a final dividend of 26.4 cents.
- ResMed (ASX:RMD): Reported Q4 EPS of $2.08, in line with consensus, and raised the quarterly dividend by 10.4% to 53 cents.
What to Watch Today:
Prepare for a tough session with several bearish factors in play – commodities had a heavy overnight session, markets are front-running Fed rate cut expectations, megacap tech stocks are under pressure due to capex concerns (along with Intel's miss and layoffs), and weak US macro data.
- Uranium: The Global X Uranium (NYSE:URA) ETF dropped 7.7% overnight to a 9-month low, likely impacting local names.
- Copper: Prices fell 2.3% to US$4.06/lb, the lowest since early April, due to growth concerns.
- Lithium: Lithium-related ETFs declined around 3% overnight. Albemarle (ALB) noted worsening market conditions, using the term “lower for longer” regarding pricing.
- Defensives: S&P 500 sectors like Healthcare, Staples, Real Estate, and Utilities finished over 1% higher overnight. Watch to see if these sectors can offset some of the broader market weakness locally.