Morning Market Wrap:
Overseas Markets:
We saw a solid move last night (Finally) across the board as markets observed weak manufacturing and services PMIs (As flagged in yesterday's Morning wrap), which serve as good indicators that the economy is showing signs that the rate hikes are taking hold. Consequently, from the market's perspective, the Fed will continue cautiously. Cash markets closed:
- Dow: +0.54%
- SPX: +1.2%
- Nas: +1.6%
After close, we witnessed the much-anticipated NVDA earnings (again flagged in yesterday's morning wrap), and they certainly influenced the markets. With upbeat guidance, they surged to a high of +10% in after-hours trading, ultimately closing up 8.5%. Peer chip stocks AMD and AVGO were also up after hours, both by over 3.5% each. Keep an eye on chip names during the Aus session (WBT, BRN, 4DS - although all are pretty speculative). Following yesterday's stellar announcement from 4DS, it might see further action.
Macro and Metals:
Yields and USD dropped significantly on the PMI data, as mentioned above, giving Gold and Silver a boost. Gold broke the $1900 barrier, closing at $1914, up 0.89%, while Silver surged 4%, closing at $24.32 - reaching about 3.5-week highs. Silver is definitely outperforming in the PM space.
Base Metals:
With the retreat of USD, Ni and Cu also went up +2.32% and +1.09% respectively. Aluminium, however, struggled, closing basically flat, down only 0.09%. Tin also didn't show any standout performance, up by just 0.26%. Nonetheless, Tin has experienced a decent bounce over the past week or so, so keep that in mind.
Energy and EV:
Oil dipped a bit, down by -1.08% again in the Sept WTI Contract, sitting at almost a 5/6 week low. Iron ore continues to exhibit strength, defying the mainstream media narrative and likely front-running China stimulus announcements. It closed near recent highs, up 1.1% in the evening session, closing at 826CNY. Just a good week and a half ago, we were discussing iron ore when it was hovering around 730'sCNY. That's a significant move up. We saw VALE and RIO ADRs move solidly for a second day straight. With the market performing well across indices, one could safely assume that Aus Iron ore names would also have a solid day (caveat being any left-field news). Coking coal is also following suit, up 0.89%. NEWC and NG both cooled off, with the NEWC Sept contract down by about 2.58%. The significant drop in Big Natty's most active Nov contract, down some 2%, continues to move back toward the lower band of the range. This might be a precursor for Thermal coal - we'll see. Uranium was stable overnight, with US names not doing much after a couple of robust days. They're likely hoping for a continuation in the Uranium price for the next leg up. The risk with this upward movement is that prices stay stagnant, and like every other time in the past 2 years, Uranium stocks get overshadowed by brighter prospects. We'll have to wait and see.
Local:
With the overseas and commodity movements, SPI has a positive lead-in at +36. Coupled with the aftermarket moves in chip stocks and the solid positive sentiment that will bring, we might be in for a strong positive day (though personal speculation could be wrong). PLS is due to report today, so be mindful of that. Chip names will likely be in focus, along with the Iron ore sector, given the overnight movements. But we'll have to let that play out.
Data (Sydney time):
Nothing local today, only some late-night data sets to come, including US durable goods and weekly Initial jobless claims, both out at 10:30 pm.
Markets will start really thinking about the Powell speech in Wyoming after the Jackson Hole Symposium finishes on Friday afternoon, so be aware of that on this upbeat vibing day :)
That's all from me today. Hope you all have a great day.